Morning Commentary: New Altice bonds maintain premiums in secondary; PlyGem improves

By Paul A. Harris

Portland, Ore., July 18 – Junk opened Wednesday unchanged on very thin volume, a trader said.

High-yield ETFs were flat at mid-morning. The iShares iBoxx $ High Yield Corporate Bd (HYG) was down a penny, or 0.01%, at $85.57 per share.

New 8.5-year secured bonds printed Tuesday by Altice France SA were actively trading at premiums to their new issue prices, the trader said.

The dollar-denominated 8 1/8% notes were par ¾ bid, 101¼ offered. The euro-denominated 5 7/8% notes were 101 bid, 101¼ offered.

The notes in both tranches (B1/B) priced at par.

Both tranches were upsized, the dollar tranche to $1.75 billion from $1.25 billion, the euro tranche to €1 billion from €650 million.

Both tranches also priced at the tight ends of talk.

The dollar tranche played to a book that was 2.5-times oversubscribed, prior to talk tightening to 8 1/8% from 8¼%, an investor said.

Elsewhere the Ply Gem Holdings Inc. 8% senior notes due 2026 were sharply higher on news that NCI Building Systems, Inc. and Ply Gem Parent, LLC announced a definitive agreement under which the two companies will combine in a stock-for-stock merger.

The Ply Gem 8% notes were 104 7/8 bid on Wednesday, the trader said, adding they had recently traded at 95.

Quiet primary

The primary market news flow was extremely thin on Wednesday morning.

In Europe, initial price guidance is out in the ContourGlobal Power Holdings SA €700 million two-part senior secured notes offering (BB/BB).

The deal is expected to come in a €300 million minimum tranche of five-year notes with initial guidance of 3½%.

The long tranche features seven-year notes and is also expected be sized at €300 million minimum. Initial guidance for the tranche is in the low 4% area.

The roadshow is scheduled to wrap up on Wednesday.

A presently thin dollar-denominated calendar sports a pair of energy names.

Bruin E&P Partners LLC is marketing a $600 million offering of eight-year senior notes (B3/B+). Initial guidance is 7½% to 7¾%, and pricing is expected Friday, sources say.

Meanwhile Comstock Resources, Inc. has undertaken a refinancing of its 2019 and 2020 maturities, which includes an $850 million offering of eight-year senior notes (Caa1/B/B).

Initial guidance is in the 9% area.

However, that may not be enough, according to a trader, who said pushback surfaced after bookrunner BofA Merrill Lynch paraded the deal recently at the New York roadshow.

Bondholders know the company has to get the deal done and want a bigger concession because of it, the trader said, forecasting that Comstock will ultimately come significantly cheap to the initial talk, and therefore trade well.

Some calendars have Comstock pricing before the end of the week; however, it could slip into the July 23 week, the trader said.

Softer crude oil prices during the past fortnight have failed to damage high-yield energy names, an investor said, adding that high-yield energy spreads have actually tightened in the past two weeks.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.