Diebold Nixdorf prices, Allied adds on; Alcoa flat; funds add $2.13 billion

By Abigail W. Adams

Portland, Me., July 9 – The domestic high-yield primary market continued to churn out new issuance on Thursday.

Diebold Nixdorf priced its two-tranche dual-currency offering of five-year senior secured notes (B3/B-).

And Allied Universal pricing an upsized $400 million add-on to its 6 5/8% senior secured notes due July 15, 2026 (B3/B-).

Blue Racer Midstream was also expected to price a $400 million offering of five-year senior notes (existing ratings B2/B/BB-) and Rattler Midstream its $500 million offering of five-year senior notes (Ba3/BBB-/BB+).

However, deal terms were unavailable as of press time.

The new deal activity will continue on Friday with Carpenter Technology Corp. on deck with a split-rated offering of $400 million eight-year senior notes (existing Ba3/confirmed BBB-).

Meanwhile, it was a soft day in the secondary space with the market heavy into the close. However, it was a good day for some opportunistic buyers, a source said.

New paper remained in focus although with mixed performances in the secondary space.

Diebold’s new dollar-denominated tranche skyrocketed out of the gate.

After a strong break during Wednesday’s session, Taylor Morrison Communities Inc.’s 5 1/8% senior notes due 2030 (Ba3/BB) held on to their gains despite weak market conditions.

However, Alcoa Corp.’s 5½% senior notes due 2027 (Ba1/BB+) fell flat in high-volume activity.

Meanwhile, high-yield mutual and exchange-traded funds pared their losses from last week’s record-setting outflow and added $2.131 billion for the week through Wednesday’s close, according to Refinitiv Lipper US Fund Flows.

Thursday’s primary

Although trepidation driven by mounting political uncertainties in the United States took hold of the stock market on Thursday, with the Dow declining 1.4%, high yield bonds held in, according to a New York-based bond trader working from home.

In the primary market, Diebold Nixdorf priced two tranches of five-year senior secured notes : $700 million of 9 3/8% notes at 99.031 to yield 9 5/8%, through the 9¾% to 10% yield talk (initial talk was 10%) and €350 million of 9% notes at 99.511 to yield 9 1/8%, through the 9¼% to 9½% yield talk (initial talk was in the low 9% area).

The Diebold dollar-denominated notes, which came at a discount, climbed to 102½ bid in late Thursday trading, the New York-based source said.

Elsewhere, Allied Universal also saw a solid execution, pricing an upsized $400 million add-on to their 6 5/8% senior secured notes due July 15, 2026 at 104.

The issue size increased from $350 million.

The issue price came at the rich end of the 103.5 to 104 price talk. Initial price talk was 103.25 to 103.75.

Terms were also expected Thursday afternoon on the Blue Racer Midstream $400 million offering of five-year senior notes, price talk 9% to 9¼%, and the Rattler Midstream $500 million offering of five-year senior notes, price talk 5¾% area.

Both these deals – from midstream companies which coincidentally appear to have derived their names from the realm of herpetology – were heard to be well oversubscribed. The Rattler deal was heard to be playing to orders amounting to more than four-times deal size, the trader said.

However, no terms were available at press time.

Looking to Friday's session, Carpenter Technology plans to price a $400 million public offering of eight-year senior notes.

The deal is in the market with early guidance in the high 6% to 7% area.

Diebold skyrockets

Diebold’s new dollar-denominated tranche skyrocketed after breaking for trade.

The notes were wrapped around 102 in high-volume activity.

The new 9 3/8% notes surged despite the weakness in the market on Thursday with accounts still chasing yield, a source said.

The 9 5/8% yield is “hefty,” a market source said. “These had room to run.”

Taylor Morrison holds

After a strong break, Taylor Morrison’s 5 1/8% senior notes due 2030 held on to their gains during Thursday.

The notes were wrapped around 101 for the majority of Thursday’s session, a market source said.

However, trading volume was relatively light with $22 million on the tape.

While volume was light on Thursday, the notes were active after breaking for trade on Wednesday.

Taylor Morrison priced an upsized $500 million issue of the 5 1/8% notes at par in a Wednesday drive-by.

Pricing came tighter than talk in the 5¼% area. Initial price talk was in the mid-5% area.

The deal was upsized from $400 million.

Alcoa flat

Alcoa’s 5½% senior notes due 2027 fell flat in the aftermarket.

The notes were largely stuck in the par to par ½ context in active trading, a source said.

There was more than $88 million in reported volume heading into the market close.

While the company was a solid name, the deal priced “on the screws,” a source said.

Its lack of movement in the secondary was also largely a product of the overall market tone.

Alcoa priced an upsized $750 million issue of the 5½% notes at par in a Wednesday drive-by.

Pricing came tighter than talk for a yield in the 5¾% area.

The initial size of the deal was $500 million.

Indexes down

Indexes were soft on Thursday.

The KDP High Yield Daily index shaved off 2 basis points to close Thursday at 65.44 with the yield now 6.48%.

The index was up 2 bps on Wednesday, 12 bps on Tuesday and 26 bps on Monday.

The ICE BofAML US High Yield index dropped 14.36 bps with the year-to-date return now negative 3.661%.

The index was down 5.6 bps on Wednesday, gained 4.9 bps on Tuesday and was up 50.1 bps on Monday.

The CDX High Yield 30 index dropped 93 bps to close Thursday at 99.8. The index gained 113 bps on Wednesday, dropped 89 bps on Tuesday and gained 57 bps on Monday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.