Icahn prices on top of talk; ING prints; busy September deal pipeline eyed; Intelsat lower; oil names negative

By Cristal Cody and James McCandless

Tupelo, Miss., Sept. 3 – Icahn Enterprises LP and Icahn Enterprises Finance Corp. tapped the junk bond market on Tuesday with a $500 million offering of senior notes.

The five-year issue priced on top of talk.

Also during the post-Labor Day session, ING Groep NV sold $1.5 billion of split-rated perpetual additional tier 1 contingent convertible capital securities tighter than initial talk.

In other action, ADT Inc. (Prime Security Services Borrower LLC) expects to issue $500 million to $750 million of first-lien senior secured notes.

The deals kick off a predicted strong high-yield bond pipeline in September.

About $20 billion of issuance is forecast for the month, up from about $10 billion of new high-yield issues reported in August, the slowest August since 2015, according to a BofA Merrill Lynch global research note released on Tuesday.

Volume is expected to be lighter compared to the same period last year when $23 billion of bonds priced and below the $40 billion of volume seen in September 2017 and September 2016, according to the report.

Volume this month is projected to be offset by $15 billion in calls/maturities and $7.3 billion in coupons, both close to recent averages, according to the report.

The first week of September carries $2 billion in coupons and $4.4 billion in redemptions.

The high-yield bond market saw a wide spread range over the summer, easing from 389 basis points in late July to 450 bps by mid-August before tightening to 409 bps by the end of the month, the BofA Merrill Lynch report said.

On Tuesday, the high-yield market opened down 1/8 point, a market source said.

The Markit CDX North American High Yield 32 index headed out off 0.349% at 106.348.

As global trade tensions escalate, the high-yield secondary began a short week moving lower.

Intelsat SA’s notes moved lower after a member of a consortium negotiating with the U.S. government over the use of C-band airwaves left the group.

As oil futures buckle under global trade pressure, Whiting Petroleum Corp.’s, California Resources Corp.’s and Superior Energy Services, Inc.’s issues were also losing.

Utilities name PG&E Corp.’s paper finished the day worse off.

Movie theater name AMC Entertainment Holdings, Inc.’s notes were lifted.

Intelsat lower

Intelsat’s notes spent Tuesday moving lower, traders said.

Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 dropped 1 point to close at 90½ bid. Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 lost 1¼ points to close at 77 bid.

On Tuesday, news broke that a peer of the Luxembourg-based satellite operator has left a C-Band Alliance, a consortium of satellite operators pushing for favorable terms on C-band usage in the United States.

Paris-based Eutelsat departed the group, though vowed to remain active in discussions around C-band.

In July, Eutelsat’s chief executive officer said that the group was not in agreement on a variety of items, including the distribution of potential proceeds.

“This has been dragging on for months,” a trader said. “With this, it doesn’t look like it’s getting resolved anytime soon.”

Intelsat and other satellite names have been waiting for the government to decide where it stands on the use of the C-band spectrum and what happens to the profits generated.

Oil buckles

As oil futures buckled, distressed energy tranches moved similarly, market sources said.

As more tariffs went into effect this week, energy names saw much of the negativity.

West Texas Intermediate crude oil futures for October delivery moved down $1.16 to settle Tuesday at $53.94 per barrel.

North Sea Brent crude oil futures for November delivery finished at $58.26 per barrel after a 99 cent loss.

Denver-based independent oil and gas producer Whiting Petroleum’s issues were losing.

The 6¼% senior notes due 2023 fell 1½ points to close at 78 bid. The 6 5/8% senior notes due 2026 shed 4¾ points to close at 69½ bid.

Los Angeles-based producer California Resources’ paper was negative.

The 6% senior paper due 2024 crashed 10 points to close at 43 bid. The 8% paper due 2022 declined by 2¾ points to close at 54 bid.

Houston-based oilfield services provider Superior Energy’s notes followed the sector’s trend.

The 7 1/8% senior notes due 2021 lost 3 points to close at 67½ bid. The 7¾% senior notes due 2024 dipped 3¼ points to close at 60 bid.

PG&E off

Utilities name PG&E’s issues ended the session worse off, traders said.

The 6.05% notes due 2034 lost 1½ points to close at 108¼ bid.

The San Francisco-based bankrupt electric utility is expected to file its restructuring plan in bankruptcy court this month in a move anticipated since entering Chapter 11 in January.

The name won the sole right to submit a plan after a judge shot down two creditor groups’ efforts to propose their own.

AMC down

Elsewhere, AMC’s paper were moving downward, market sources said.

The 6 1/8% senior subordinated paper due 2027 lost ½ point to close at 92 bid.

No news was associated with the rise, though the Leawood, Kan.-based theater chain’s structure has seen a positive slant after the company’s most recent earnings report.

The company surpassed earnings expectations, lifting its paper.

Indexes lose

Three high-yield indexes gave back some of last week’s gains on Tuesday.

The KDP High Yield Daily index dropped 7 basis points to end Tuesday at 71.75 with the yield rising to 5.4%.

The index picked up 6 bps on Friday, moved up 11 bps on Thursday and picked up 5 bps on Wednesday.

The ICE BofAML US High Yield index gave back 17.7 bps at the end of the session with the year-to-date return now at 10.994%.

The index inched up 4.5 bps on Friday, gained 17.4 bps on Thursday and improved by 10.9 bps on Wednesday.

The index has remained above the 10% threshold for two weeks.

The CDX High Yield 30 index lost 34.77 bps, closing at 106.3606.

The index gained 34.01 bps on Friday, shot up 34.04 bps on Thursday and rose 34.84 bps on Wednesday.

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