Morning Commentary: CNG markets secured notes; VistaJet, GasLog offerings on deck

By Paul A. Harris

Portland, Ore., May 14 – High-yield bond dealers set the table for a moderately active session in the new issue market on Tuesday morning.

VistaJet Malta Finance plc talked its restructured $525 million offering of five-year senior notes with a 10½% coupon at an original issue discount of about 2 points to yield 11%.

Call protection increased to three years from two years, while the first call premium remains unchanged at par plus 50% of the coupon.

There were also covenant changes.

Books close at 12:30 p.m. ET on Tuesday.

Meanwhile, GasLog Ltd. talked a $75 million tack-on to its 8 7/8% senior bullet notes due March 22, 2022 at 102.5 to 103.

The deal, which was marketed by means of a Monday investor call, is expected to price later on Tuesday.

Credit Suisse is left books on both VistaJet and GasLog.

The thin active deal calendar took aboard one more offering.

CNG Holdings, Inc. plans to kick off a $310 million offering of five-year senior secured notes on an investor conference call scheduled to get underway at 12:30 p.m. ET on Tuesday.

Jefferies has the books for the debt refinancing deal.

Recent issues

With equities rallying to start the session, junk opened slightly higher on Tuesday, a trader said.

High-yield ETF share prices were better at mid-morning. The iShares iBoxx $ High Yield Corporate Bd (HYG) was up 0.23%, or 20 cents, at $85.64 per share.

Among recent issues one of the more conspicuous secondary market performances comes from the Talen Energy Supply LLC 7¼% senior secured notes due 2027 (Ba3/BB), which were trading 101 1/8 bid, 101 5/8 offered Tuesday morning, having closed at 101¼ on Monday, the trader said.

The upsized $750 million issue (from $500 million) priced on May 8.

The DCP Midstream Operating, LP 5 1/8% senior bullet notes due May 2029 (Ba2/BB+/BB+) were par ¼ bid, par ¾ offered on Tuesday.

The upsized $600 million issue (from $500 million) priced at par on May 8.

The Bausch Health Cos. Inc. senior notes (B3/B-/B), which came in 8.6-year and 10-year tranches, both sized at $750 million on May 9, were both slightly above new issue prices on Tuesday.

The Bausch Health 7% notes due January 2028 were par bid, par ¼ offered, while the 7¼% notes due May 2029 were par 1/8 bid, par ¼ offered.

Both tranches priced at par.

The new Charter Communications, Inc. (CCO Holding LLC and CCO Holdings Capital Corp.) 5 3/8% senior notes due June 2029 (B1/BB/BB+) were lagging new issue price on Tuesday, at 99 7/8, the trader said.

The downsized $750 million issue (from $1 billion) priced at par on May 9.

Among recent European issues the Cirsa Finance International Sarl 4¾% senior secured notes due 2025 (B2/B+) were trading 40 cents above the new issue price on Tuesday, according to a market source.

The €390 million issue priced at par on May 8.

The eircom 3½% senior secured notes due 2026 (B1/B+/BB) were trading 50 cents below the reoffer price on Tuesday.

The €750 million issue price at par on April 26.

Mixed Monday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Monday, according to a trader.

High-yield ETFs sustained $240 million of outflows on the day.

However actively managed high-yield funds saw $105 million of inflows on Monday, the source said.

With three of the five sessions in the present weekly reporting period tallied, the combined funds are tracking $600 million of outflows in the week that began with Thursday's open, and will conclude with Wednesday's close, the trader said.

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