Rite Aid’s senior notes dip; IHS Markit active but level; HCA Healthcare improves

By James McCandless and Paul A. Harris

San Antonio, July 25 – The primary market saw no new deals price in Junkbondland Wednesday, while the secondary market continued to see robust trading at the beginning of earnings season.

A modest number of dollar-denominated deals are expected to price before the coming weekend, including Party City Holdings Inc.’s. $500 million offering of eight-year senior notes (B1/B-), talked to yield in the 6¾% area.

In the secondary market, Rite Aid Corp.’s 7.7% senior notes fell as the company attempts to justify a merger with Albertsons to shareholders.

IHS Markit Ltd.’s senior notes remained a fixture in secondary trading.

HCA Healthcare, Inc.’s 5.5% senior notes due 2047 improved after the company beat Q2 earnings estimates.

Intelsat SA notes ended mixed.

Party City talk 6¾% area

In Wednesday's primary market Party City Holdings Inc. talked its $500 million offering of eight-year senior notes (B1/B-) to yield in the 6¾% area.

Books close at 10 a.m. ET Thursday.

Goldman Sachs is the left bookrunner for the debt refinancing deal.

Party City is part of a modest calendar of dollar-denominated deals expected to price before the coming weekend.

Elsewhere Intrepid Aviation Group Holdings is roadshowing a $515 million offering of three-year senior notes (/B/B+), via Jefferies. The roadshow wraps up Thursday.

And Hi-Crush Partners LP is marketing a $450 million offering of eight-year senior notes (B3/B-).

The deal is in the market with initial guidance in the 8½% area, but might need a bit more juice in order to cross the finish line, a trader said.

WiZink PIK toggle deal

In the European market WiZink plans to start a roadshow on Thursday in Paris and Frankfurt for a €515 million offering of five-year senior secured PIK toggle notes (B+/BB-).

Joint physical bookrunner Goldman Sachs International will bill and deliver. UBS is also a joint physical bookrunner. NatWest Investments is a joint bookrunner.

Proceeds will be used by Varde Partners Inc. to finance stock purchases related to its acquisition of the remaining 49% stake in WiZink, a Madrid-based digital bank that specializes in revolving credit in Spain and Portugal.

WiZink boards a modest euro-denominated calendar that also includes the WFS Global Holding SAS LBO deal: €660 million of senior secured notes due 2023 (B3/B-) in two tranches including fixed-rate notes and floating-rate notes, with tranche sizes to be determined.

BofA Merrill Lynch and Barclays are the global coordinators for the deal, which is coming via special purpose vehicle Promontoria Holding 264 BV. Citigroup, RBC and ING are joint bookrunners.

Proceeds together with equity contributions from Cerberus Capital and the existing management of WFS Global, will be used to finance the indirect acquisition of WFS by Cerberus, including the repayment of certain WFS debt.

And CEVA Logistics AG is running a roadshow that wraps up Thursday for its €300 million offering of seven-year senior secured notes (B1/BB-), according to market sources.

HSBC and Credit Suisse are the joint global coordinators.

Price talk on all three of the euro deals was pending, as of the Wednesday close in London, a debt capital markets banker based there said.

Rite Aid off

Camp Hill-Pa.-based retail drug store chain Rite Aid saw its notes decline in secondary trading after sending a letter to shareholders on Tuesday arguing the benefits of a proposed merger with Albertsons. The company promoted the growth prospects and potential financial strength that the combined entity could benefit from.

“The merger vote is coming soon,” a trader said. “Rite Aid has a lot to gain if it goes through.”

The 7.7% notes due 2027 lost about 3¼ points to close at around 86¾ bid.

IHS Markit up

IHS Markit remained in traders’ view after it priced $500 million of 4.125% five-year notes at 99.707 to yield 4.19%, or a spread of Treasuries plus 145 basis points last Thursday.

The company also priced $750 million of 4.75% 10-year notes at 99.628 to yield 4.797%, or a spread of Treasuries plus 195 bps.

The 4.75% notes senior notes due 2028 were seen reaching 99.55 after rising to 99.45 on Tuesday.

HCA gains

Nashville-based healthcare services provider HCA Healthcare issues improved after the company posted a well-received Q2 earnings report. The company reported $2.31 earnings per share, beating analyst estimates of $2.14, posting revenues of $11.5 billion.

The 5½% bonds due 2047 added about ½ point to close at around 93½ bid.

Intelsat mixed

Luxembourg-based satellite communications company Intelsat notes ended the day mixed. The FCC is considering a rule change that would allow mobile providers to access airwaves currently restricted to traditional broadcasters and managed by satellite firms, potentially opening up a new revenue stream for satellite firms.

The Intelsat (Luxembourg) SA 7¾% notes due 2021 lost about 3½ points to close at 94 bid. The 8 1/8% notes due 2023 picked up about ¼ point to close at around 84½ bid.

On Tuesday, the 7¾% notes rose about 3¼ points and the 8 1/8% notes gained about 1¾ points.

Indexes

The KDP High Yield index lost 2 basis points to close at 70.38 on Wednesday with the yield at 5.89%. The index gained 2 bps on Tuesday and fell 2 bps on Monday, spending last week bouncing up and down 1 bps.

The Merrill Lynch High Yield index extended a positive run Wednesday. The index was up 2.6 bps with the year to date return at 0.871%, making it the 14th consecutive day of improvement after reaching the black on July 6.

The CDX High Yield 30 index was down 9.5 bps on Wednesday to close at 106.750 after a 16.2 bps gain on Tuesday and a 2.8 bps gain on Monday.

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