CEVA on road; LifePoint Health notes rise; California Resources up; Intelsat gains

By James McCandless and Paul A. Harris

San Antonio, July 24 – Tuesday saw no new deals price in the high-yield primary market, although one issuer began a roadshow for an offering, while trading in the secondary market remained at Monday’s levels.

Baar, Switzerland-based third-party logistics company CEVA Logistics AG began a roadshow for its €300 million offering of seven-year senior secured notes (B1/BB-).

The roadshow wraps up on Thursday.

In the secondary market, LifePoint Health Inc.’s 5 3/8% and 5 7/8% senior notes continued to rise a day after news of the company’s acquisition.

California Resources Corp.’s 8% notes due 2022 rose with oil futures

Intelsat SA notes improved as the Federal Communications Commission considered a rule change that could benefit satellite firms.

IHS Markit Ltd.’s senior notes garnered more attention from the market Tuesday.

CEVA starts roadshow

In Tuesday's primary market CEVA Logistics AG began a roadshow for its €300 million offering of seven-year senior secured notes (B1/BB-).

The roadshow wraps up on Thursday.

HSBC and Credit Suisse are leading the debt refinancing deal.

Elsewhere the new issue market was generally quiet on Tuesday morning, following a modest buildup of the active forward calendar on Monday.

Among those deals announced Monday, Party City Holdings Inc.’s $500 million offering of eight-year senior notes (B1/B-) is heard to be going well and playing to significant reverse inquiry, a trader said.

The deal, which is being led by left bookrunner Goldman Sachs, is set to price at the conclusion of a Tuesday-Wednesday roadshow.

Elsewhere on Monday Hi-Crush Partners LP began marketing a $450 million offering of eight-year senior notes (B3/B-), which are expected to price during the present week.

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.

Also on Monday Intrepid Aviation Group Holdings started a roadshow for a $515 million offering of three-year senior notes (/B/B+), via Jefferies. The roadshow wraps up Thursday, and the deal is set to price thereafter.

Given the present strength in the market some of the conspicuous merger and acquisition deals in the pipeline could begin to surface soon, a trader said.

Sources have been watching for BMC Software to bring $1,825,000,000 of senior notes (Caa2) as part of the financing for the buyout of the company by KKR.

Monday outflows

The cash flows of the dedicated high-yield bond funds were negative on Monday, a trader said.

High-yield ETFs sustained $77 million of outflows on the day.

Actively managed funds saw $15 million of outflows on Monday.

LifePoint rises

Brentwood, Tenn.-based rural hospital operator LifePoint notes continued to trade up in the secondary market after reports confirmed Monday that Apollo Management Group would be acquiring the company for $5.6 billion.

“They’ve seen a pretty good bump these past few days,” a trader said.

The 5 7/8% notes due 2023 gained about 1¼ points to close at 104¼ bid. The 5 3/8% notes due 2024 rose about 1½ point to close at 104½ bid.

On Monday the 5 7/8% notes rose about 2½ points and the 5 3/8% notes gained about 6¼ points.

California Resources up

Los Angeles-based independent oil and gas producer California Resources’ issues gained in tandem with West Texas crude oil futures.

“Oil has been seesawing lately,” a trader said. “As a bellwether, those notes have pretty much done the same.”

The 8% notes due 2022 rose ¼ point to close at 90 bid.

Intelsat improves

Luxembourg-based satellite communications company Intelsat paper advanced upward, traders confirmed. The FCC is considering a rule change allowing 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% paper due 2021 rose about 3¼ points to close at around 97½ bid. The 8 1/8% paper due 2023 picked up about 1¾ points to close at around 84¾ bid.

On Monday, the 7¾% paper was level and the 8 1/8% paper lost about 2 points.

IHS Markit mixed

IHS Markit 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.

“I don’t see these dropping out of view anytime soon,” a trader said.

The 4.75% notes senior notes were seen trading up to 99.45 after dipping to 99.13 bid on Monday.

The 4.125% senior notes due 2023 edged lower to 99.84 after rising to 99.9 bid on Monday.

Indexes positive

The KDP High Yield index picked up 2 basis points to close at 70.40 on Tuesday with the yield at 5.87%. The index opened the week down 2 basis points on Monday and spent last week jumping up and down 1 bps.

The Merrill Lynch High Yield index continued its recent positive trend. The index was up 9.9 bps with the year to date return at 0.844%, hitting its thirteenth consecutive rise after moving into the black on July 6.

The index was up 5.8 bps on Monday and 3.5 bps on Friday.

The CDX High Yield 30 index was up 16.2 bps on Tuesday to close at 106.882 after a 2.8 bps gain on Monday and a 2 bps gain on Friday.

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