Morning Commentary: RegionalCare on roadshow; Gray notes gain; Dubai Aerospace dips

By Abigail W. Adams

Portland, Me., Nov. 2 – While high-yield new deal activity is expected to remain muted until mid-November, one billion-dollar deal joined the forward calendar on Friday.

RegionalCare Hospital Partners Holdings, Inc. and LifePoint Health, Inc. plan to start a roadshow on Tuesday for a $1,575,000,000 offering of eight-year senior notes, according to a market source.

The roadshow will run from Tuesday until Nov. 9 with pricing expected thereafter.

Barclays is the left lead for the Rule 144A for life deal. Citigroup Global Markets Inc., RBC Capital Markets LLC, Deutsche Bank Securities Inc. and UBS Securities LLC are joint bookrunners.

Proceeds will be used to finance the acquisition of LifePoint Health by Apollo Global Management LLC for its merger with RegionalCare.

HC2 Holdings, Inc. remains in the market with its $535 million offering of senior secured notes with the deal heard to be pricing on Friday although sources were skeptical.

The European primary market’s forward calendar remained “very, very thin,” a market source said.

Victoria plc remains in the market with its €450 million offering of five-year senior secured notes (BB-/BB). However, pricing is now expected to be pushed into the Nov. 5 week.

Gray Television Inc.’s newly priced 7% senior notes due May 2027 (B3/B+/BB-) were putting in a strong performance in the secondary space. The notes were trading ¾ to 1 point above their issue price, a market source said.

Gray priced an upsized $750 million of the 7% notes at par in a Thursday drive-by.

Pricing came on top of revised talk of 7%.

Price talk was previously 7% to 7½%, which came on top of early guidance in the low 7% area, according to market sources.

In a reversal of a previous trend, which has seen issuers flock to the leveraged loan market, Gray’s concurrent term loan was downsized to $1.4 billion from $2.15 billion with proceeds shifted to the senior notes offering.

While Gray Television’s senior notes were in demand in the secondary space, Dubai Aerospace Enterprise Funding LLC’s newly priced two-tranche issue of three-year and five-year senior notes (Ba2/BB+) struggled.

Both tranches were lagging their issue price in secondary trading, a market source said.

The 5¼% senior notes due 2021 were seen at 99¼ bid, par offered. The 5¾% senior notes due 2023 were seen at 99 bid, 99¾ offered early in Friday’s session.

Both tranches priced at par on Thursday.

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