Fortescue prices $1.5 billion two-parter; Community Health, Chemours, Resolute, Hexion also price

By Paul Deckelman

New York, May 9 – After two consecutive sessions where not much was seen going on in Junkbondland from a pricing perspective, the high-yield primary got its swagger back on Tuesday, as five issuers were heard by syndicate sources to have combined to bring some $2.9 billion of new dollar-denominated and fully junk rated paper pricing, all of it in quickly shopped and opportunistically timed drive-by transactions.

It was the most new paper the junk world had seen since March 30, when $3.88 billion priced in eight tranches.

Fortescue upsizes to $1.5 billion

Australia’s Fortescue Metals Group Ltd. was heard by high-yield syndicate sources to have priced an upsized $1.5 billion two-part offering on Tuesday.

The deal consisted of $750 million 4¾% five year notes and $750 million seven-year notes.

The deal, which will settle on May 12, was upsized from an originally shopped $1 billion, the sources said.

The Rule 144A and Regulation S transaction was brought to market via J.P. Morgan Securities LLC, Credit Suisse, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC.

The East Perth, Western Australia-based iron ore mining company’s FMG Resources (August 2006) Pty Ltd. subsidiary will be the official issuer of the notes.

Fortescue – Australia’s third-largest iron ore producer and the world’s fourth-largest exporter into the seaborne iron-ore market – plans to use the new-deal proceeds to repay term loan debt. It has $976 million of such debt outstanding scheduled to mature in 2019.

Community Health $900 million tap

Community Health Systems Inc. priced an upsized $900 million add-on offering (Ba3/BB-) to its existing 6¼% senior secured notes due March 31, 2023.

The deal was enlarged from an originally announced $700 million.

The notes priced at 101.75 to yield 5.83%, right in the middle of price talk of 101.5 to 102.

The Franklin, Tenn.-based hospital operator’s wholly owned CHS/Community Health Systems, Inc. subsidiary will be the official issuer of the bonds.

The SEC-registered offering came to market via a large syndicate of underwriters, consisting of book-runners Credit Suisse Securities (USA) LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, SunTrust Robinson Humphrey, Inc., and Wells Fargo Securities, LLC, as well as co-managers BBVA Securities Inc., Fifth Third Securities, Inc., Morgan Stanley & Co. LLC and Scotia Capital (USA) Inc.

Community Health intends to use the net proceeds of the offering, plus available cash on hand, to prepay and extinguish its term loan A facility and to pay related fees and expenses.

Chemours prices $500 million

Chemours Co. priced $500 million of 10-year senior notes (B1) Tuesday, high yield syndicate sources said, with the new bonds coming to market at a slight discount to par.

The quick-to-market same-day issue priced at 99.051 with a 5 3/8% coupon, for a yield to maturity of 5½% – in line with talk that circulated in the market before the pricing.

The SEC-registered offering came to market via joint book-running managers Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Barclays Capital Inc. and TD Securities (USA) LLC, along with co-managers HSBC Securities (USA) Inc., RBC Capital Markets, LLC and Mizuho Securities USA Inc.

Chemours – a Wilmington, Del.-based chemical company that was spun off from industry giant DuPont in 2015 – plans to use the proceeds from the new bond deal for working capital and general corporate purposes, including helping to fund its liabilities arising from the settlement of several thousand lawsuits over the dumping of PFOA, a toxic chemical into the ground, air and water around a former DuPont plant in Parkersburg, W.Va. The two companies agreed in February to pay a total of $670 million to settle those law suits, evenly split between them.

Resolute $125 million tap

Resolute Energy Corp. priced a $125 million add-on to its existing 8½% senior notes due May 1, 2020, high-yield syndicate sources said Tuesday.

The notes priced at 101.625, at the midpoint of pre-deal price talk of 101.5 to 102.75. They priced to yield 7.874%.

The sources said the Rule 144A and Regulation S deal, being sold with registration rights, priced later in the session, brought to market via bookrunners BMO Capital Markets Corp. and Goldman Sachs & Co.

The notes will have the same terms as the $400 million of already outstanding 8½% paper that the company originally sold. The company had priced $250 million in April of 2012 at par on April 20 and did a $150 million add-on tranche on Dec. 5, 2012 that priced at 101.25 to yield 8.2305%.

Resolute Energy, a Denver-based independent oil and natural gas exploration and production company, plans to use the new-deal proceeds and borrowings under its senior credit facility to finance the previously announced acquisition of certain producing and undeveloped oil and gas properties in the Delaware Basin in Reeves County, Texas.

Hexion $75 million add-on

Hexion Inc. priced a $75 million add-on to its existing 10 3/8% first-priority senior secured notes due Feb. 1, 2022, high yield market sources said Tuesday.

According to an 8-K filing with the Securities and Exchange Commission, the add-on tranche priced at 100.5, and the new issue will settle on May 12.

A market source indicated that J.P. Morgan Securities LLC was involved with the financing.

The Columbus, Ohio-based chemical company sold $485 million of the notes earlier this year, pricing them at par in a regularly scheduled calendar offering on Jan. 25. That tranche of bonds was downsized from an originally announced $502 million. It was sold as part of a $710 million two part offering that also included $225 million of 1.5-lien notes due 2022

The company plans to use the proceeds from the Rule 144A and Regulation S add-on for general corporate purposes.

OneMain pricing pushed

OneMain Holdings Inc.’s offering of five-year senior unsecured notes is now expected to price on Wednesday morning, the company said late Tuesday.

It said that it was “still finalizing details” of the issue after upsizing the prospective offering to $700 million.

That was up from the originally announced $400 million size and up as well from an interim upsized $600 million around midafternoon (ET).

Price talk at that time envisioned a yield in the 6¼% area.

The Evansville, Ind.-based consumer finance company’s wholly owned indirect subsidiary Springleaf Finance Corp. will be the official issuer of the notes.

The SEC-registered offering will come to market via joint bookrunning managers Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Morgan Stanley & Co Inc., Natixis Securities America LLC, RBC Capital Markets Corp. and SG Americans Securities LLC, as well as co-managers Keefe Bruyette & Woods, Sander O’Neill & Partners LP and Williams Capital Group LP.

The company plans to use the new-deal proceeds for general corporate purposes, which may include debt repayments and repurchases.

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