Refinitiv, International Game, Diamondback price; Altra, Northern Oil on tap; Neiman Marcus tanks

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 18 – The primary market was in high gear on Tuesday with three deals pricing and several more joining the forward calendar.

All eyes were on Refinitiv as it priced a downsized $4.25 billion equivalent amount of high-yield notes in four tranches.

International Game Technology plc priced an upsized $750 million issue of senior secured bullet notes due Jan. 15, 2027 (existing ratings Ba2/BB+).

Diamondback Energy, Inc. priced an upsized $750 million add-on to its 4¾% senior notes due Nov. 1, 2024 (Ba3/BB).

Altra Industrial Motion Corp. plans to start a roadshow on Wednesday for a $400 million offering of eight-year senior notes (B2/B+).

And Northern Oil and Gas, Inc. kicked off a $350 million tack-on to its 8½% senior secured second-lien PIK notes due May 15, 2023.

The European primary market’s forward calendar also grew with InterXion Holding NV and Promontoria MCS Holding SAS launching offerings.

Meanwhile, the secondary space was active with the influx of new paper.

Refinitiv’s dollar-denominated tranches dominated trading activity with the notes seen above their issue price.

However, International Game’s 6¼% notes due 2027 outperformed with the notes gaining more than 1 point in active trading.

International Game’s outstanding junk bonds also saw gains after the pricing of the debt refinancing deal.

Outside of the new paper, Neiman Marcus Group, Inc.’s junk bonds dropped 9 to 10 points in high-volume trading after the company released quarterly and year-end earnings and transferred its MyTheresa subsidiary to sit directly under the parent company.

Refinitiv prices tight

Refinitiv priced a downsized $4.25 billion equivalent amount of high-yield notes in four tranches.

A downsized $1.25 billion tranche of 7.5-year first lien notes (B2/B/BB+) priced at par to yield 6¼%.

The yield printed at the tight end of the 6¼% to 6 3/8% final yield talk. Earlier talk was in the 6½% area. Initial guidance was in the low 7% area. The tranche was downsized from $2 billion.

An €860 million tranche of 7.5-year euro-denominated first lien notes (B2/B/BB+) priced at par to yield 4½%.

The yield printed at the tight end of the 4½% to 4 5/8% final yield talk. Earlier talk was in the 4¾% area. Initial guidance was in the 5% area.

In the unsecured tranches, a downsized $1,575,000,000 tranche of eight-year senior notes (Caa2/B-/B+) priced at par to yield 8¼%.

The yield printed at the tight end of the 8¼% to 8 3/8% final yield talk. Earlier talk was in the 8½% area. Initial guidance was in the low 9% area. The tranche is downsized from $1.8 billion.

And a downsized €365 million tranche of eight-year senior notes (Caa2/B-/B+) priced at par to yield 6 7/8%.

The yield printed at the tight end of the 6 7/8% to 7% final yield talk. Earlier talk was in the 7¼% area, Initial guidance was in the 7% area.

The euro-denominated senior notes tranche was downsized from $700 million.

The four-part bond offer was downsized from $5.5 billion in a shift of proceeds, which saw the term loan increased by $1.25 billion, upping its size to $9.25 billion equivalent from $8 billion equivalent.

JPMorgan was the global coordinator and physical bookrunner.

Proceeds from the bonds and loans will be used to help fund the acquisition of a 55% stake in Thomson Reuters Financial & Risk by Blackstone, Canada Pension Plan Investment Board and GIC, and for general corporate purposes.

International Game upsizes

International Game priced an upsized $750 million issue of senior secured bullet notes due Jan. 15, 2027 (existing ratings Ba2/BB+) at par to yield 6¼%, according to a market source.

The issue size was increased from $500 million.

BofA Merrill Lynch, Barclays, Credit Agricole CIB, NatWest Investments, Scotia Capital, SG CIB, Fifth Third Bank, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC were the joint bookrunners.

The London-based provider of gaming technology and equipment plans to use the proceeds, together with a draw on its senior syndicated revolving credit facilities, to redeem its $600 million 5 5/8% senior secured notes due 2020 on Sept. 27 at 102.843.

Diamondback taps 4¾% notes

Diamondback Energy priced an upsized $750 million add-on to its 4¾% senior notes due Nov. 1, 2024 (Ba3/BB) at 99.75 to yield 4.797% in a quick-to-market Tuesday trade.

The issue size was increased from $500 million.

BofA Merrill Lynch was the left bookrunner. Goldman Sachs & Co. and Wells Fargo Securities LLC were the joint bookrunners.

The Midland, Texas-based oil and gas company plans to use the proceeds to repay debt under its revolving credit facility and for general corporate purposes which may include funding a portion of the pending acquisition of certain assets from Ajax Resources, LLC.

Altra sets roadshow

Altra Industrial Motion plans to start a roadshow on Wednesday in New York and New Jersey for a $400 million offering of eight-year senior notes (B2/B+).

Goldman Sachs & Co. is the left bookrunner. UBS Investment Bank and Citigroup Global Markets Inc. are the joint bookrunners.

The issuing entity will be Stevens Holding Co., Inc. The notes are to be guaranteed by Altra Industrial Motion Corp.

The Braintree, Mass.-based designer, producer and marketer of electromechanical power transmission and motion-control products plans to use the proceeds to fund the cash dividend to Fortive.

Northern Oil kicks off tap

Northern Oil and Gas kicked off a $350 million tack-on to its 8½% senior secured second-lien PIK notes due May 15, 2023 on Tuesday.

RBC Capital Markets LLC, Wells Fargo Securities LLC, ABN Amro, Capital One, and Citizens Bank are the joint bookrunners.

There is a 100 basis points PIK interest step-up. PIK payments may only be made until the April 1 payment date, and only when leverage is greater than three-times.

The Wayzata, Minn.-based independent oil and gas acquisition, exploration, development and production company plans to use the proceeds to repay bank debt and for general corporate purposes.

European deals

In the European primary market, InterXion Holding announced it intends to offer a €200 million add-on to its 4¾% senior notes due 2025.

The Amsterdam-based provider of carrier and cloud-neutral colocation data center services plans to use the proceeds for general corporate purposes including expansion projects.

And France-based Promontoria MCS Holding has launched €120 million of Louvre Bidco SAS senior secured floating rate notes due 2024.

Upon satisfaction of certain conditions, the temporary notes will be canceled and automatically exchanged for an equivalent amount of senior secured floating rate notes due 2024.

The floating rate notes would be issued under Louvre Bidco's existing indenture dated Sept. 28, 2017, which governs its existing €270 million of 4¼% senior secured notes due 2024.

Upon release from escrow, proceeds from the temporary notes, along with the proceeds from an equity injection and cash on balance sheet, will be used to fund the merger with France-based debt collector DSOgroup, repay DSO debt, fund DSO's acquisition of an Italian debt collection and factoring company and for general corporate purposes.

Refinitiv dominates

Refinitiv’s dollar-denominated tranches dominated trading activity in the secondary space with the notes making nominal gains in high-volume trading.

The 8¼% notes due 2026 traded up to par 3/8 after breaking for trade, a market source said. More than $220 million of the bonds had traded by the late afternoon.

The 6¼% notes due 2026 traded up to par ¼ with more than $172 million of the bonds on the tape.

While the notes were trading above par, they did not reach the same heights as new paper from International Game, which sources attributed to supply and demand and the nature of the deal, which was a leveraged buyout.

International Game trades up

International Game’s 6¼% senior notes due 2027 were trading well above their issue price in high-volume activity after freeing for trade.

The 6¼% notes were seen at 101 bid, 101¼ offered and were trading around 101 1/8, sources said. More than $155 million of the bonds were on the tape by late afternoon.

The deal was a straightforward refinancing deal from a strong credit, a market source said of the notes’ secondary performance.

The demand during bookbuilding followed it into the secondary space.

The new issue stimulated activity in International Game’s capital structure.

The gaming technology and equipment company’s 6½% senior notes due 2025 and 6¼% senior notes due 2022 were also active with the notes up about 1/8 point to close the day at 103 5/8.

Proceeds from International Game’s new offering will be used to redeem its 5 5/8% senior notes due 2020 on Sept. 27 at 102.843.

While not as active, the 5 5/8% notes gained about 1 point to trade up to 102.89 during Tuesday’s session.

Neiman Marcus tanks

Neiman Marcus’ junk bonds dropped 9 to 10 points in high-volume trading on Tuesday after the fashion retailer released earnings and internally transferred a subsidiary.

Neiman’s 8% senior notes due 2021 dropped about 9 points to close Tuesday at 65½, a market source said. More than $105 million of the bonds changed hands during the sell-off.

The 8% notes have been active and making gains over the past two weeks with investors optimistic about the company’s prospects after competitor Saks Fifth Avenue reported earnings. The optimism disappeared on Tuesday, a source said.

Neiman’s 8¾% senior notes due 2021 dropped 10 points to trade at 64¾, a market source said. More than $28 million of the bonds were on the tape.

Neiman reported rising sales and revenue and a net loss of $75.3 million for the fourth quarter of 2018. Adjusted EBITDA was $56.1 million for the fourth quarter and $477.1 million for the fiscal year, according to a company news release.

Neiman also announced it was moving its subsidiary MyTheresa in an internal organization, a market source said.

The online retail unit will be placed under the parent company with the subsidiary no longer included in the company’s public financial reports.

Indexes gain

Three benchmarks for the high-yield secondary market all posted gains on Tuesday after a mixed launch to the week.

The KDP High Yield Daily index gained 6 basis points on Tuesday to close the day at 70.42. However, the yield remained flat at 5.84%.

The index was flat on Monday, closing the day at 70.36. However, the yield dropped 1 basis point to 5.84%.

The index posted a 6 bps gain on the week last week.

The Merrill Lynch High Yield index continued its upward climb on Tuesday. The index was up 6.6 bps on Tuesday with the year-to-date return now 2.381%. The index was up 4.2 bps on Monday.

The index saw consecutive gains last week where it crossed the 2% year-to-date threshold and climbed 48.2 bps on the week.

The CDX High Yield 30 index climbed 9 bps to close Friday at 107.34. The index dropped 14 bps on Monday, the index’s first drop after a solid week of consecutive gains last week that saw the index climb 55 bps.

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