EnLink prices add-on; DISH on the rebound; Charter rises; Vericast lower; funds lose $2.135 billion

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 30 – The Thursday junk session saw a single dollar-denominated deal transacted as a drive-by.

EnLink Midstream, LLC priced a $300 million add-on to its 6½% senior bullet notes due Sept. 1, 2030 (Ba1/BB+/BBB-) at 99 to yield 6.672%.

The issue price came at the rich end of the 98.75 to 99 price talk. Initial talk was 98.375 to 98.625.

The issue was heard to be four-times over-subscribed, according to a bond trader who added that the 8¾% tap notes traded up to par bid, par 3/8 offered, on the break.

In the European session IHO Verwaltungs GmbH, the holding company for Schaeffler AG, priced an upsized €300 million add-on to its 8¾%/9½% sustainability-linked senior secured PIK toggle notes due May 15, 2028 (Ba2) at 101.

The issue size increased from €200 million.

The Herzogenaurach, Germany-based automotive parts supplier's Thursday tap followed on the heels of the orginal €500 million, which priced at 98.96 to yield 9% last Friday.

Proceeds from both the original issue and Thursday's tap will be used to largely pay off the company's €800 million of outstanding senior secured notes due 2025.

Thursday's action in the primary market left the active forward calendar empty, heading into Friday's session, which will bring March 2023 to a close.

Meanwhile, a largely sideways day in the secondary space finished with a strong tone with buyers lifting the market into the close.

While buyers have returned to the space in recent sessions amid stability in the banking sector and positive earnings, macro data will determine how the market closes for the week with the latest CPE print, the Fed’s preferred inflation gauge, to be released on Friday.

The cash bond market added another 3/8 point to the strong gains of the previous sessions with topical news and an improved tone jumpstarting activity in the space.

DISH Network Corp.’s senior notes continued their strong rebound on Thursday with the notes adding another 1½ to 3 points.

News that Intelsat was in merger talks with SES SA sparked buying in DISH’s badly battered capital structure and also helped lift the broader telecommunications sector.

Charter Communications, Inc. subsidiary CCO Holdings, LLC’s senior notes (B1/BB-) were among the benefactors of renewed interest in telecommunications with the notes higher in active trading.

Vericast Corp.’s 11% first-lien notes due 2026 (Caa2/CCC+) were lower with a large seller in the market.

Meanwhile, high-yield mutual and exchange-traded funds continued to see outflows with $2.135 billion leaving the space in the week through Wednesday’s close, according to the Refinitiv Lipper US Fund Flow Report Newsline.

DISH on the rebound

DISH’s senior notes continued to rebound strongly from a brutal month, adding another 1½ to 3 points to the strong gains of the previous session.

DISH’s soon-to-mature 5 7/8% senior notes due Nov. 15, 2024 (B3/B) added another 3 points.

The notes closed Thursday wrapped around 87 with the yield now 15¼%, according to a market source.

There was $22 million in reported volume.

The notes have jumped 6½ points over the past two sessions.

DISH’s 11¾% senior secured notes due 2027 (Ba3/B+) limbed 2 points to break above a 94-handle.

The notes were changing hands in the 94¾ to 95¼ context heading into the market close with the yield about 13 3/8%.

There was $30 million in reported volume.

The notes have gained about 5 points over the past two sessions.

DISH’s 5¼% senior secured notes due 2026 (Ba3/B+) climbed 2½ points to close the day in the 77¾ to 78¼ context.

The yield narrowed to 12 7/8%.

The notes have climbed about 4 points over the past two sessions.

DISH’s capital structure has been under heavy selling pressure in March with market players anticipating a restructuring is on the horizon.

However, the notes have bounced strongly over the past two sessions with Intelsat’s merger talks sparking a revaluation of DISH’s assets, sources said.

CCO gains

Charter subsidiary CCO Holdings’ senior notes were stronger in active trading on Thursday with Intelsat’s merger negotiations sparking renewed interest in the telecommunications sector.

CCO’s 5 3/8% senior notes due 2029 gained about 5/8 point to close the day at 90 7/8, a source said.

There was $16 million in reported volume.

CCO’s 4¼% senior notes due 2034 gained ½ point to close the day at 76 7/8.

The 7 3/8% senior notes due 2031 rose 3/8 point to close the day at 98¼.

The notes were trading with a yield of about 7½%, a source said.

Vericast lower

Vericast’s 11% first-lien notes due 2026 were lower on Thursday after a large seller in the market found buyers.

The notes were off about 1 point to trade on a 105-handle.

They were changing hands in the 105 to 105¼ context heading into the close, a source said.

The yield was about 8½%.

There was $23 million in reported volume.

The notes were active after the company announced a new $30 million FILO term facility.

There had been a large seller of the notes in the market for the past two weeks but the notes attracted no bids, a source said.

“Today there are buyers,” a source said.

Indexes

The KDP High Yield Daily index gained 21 points to close Thursday at 51.28 with the yield 7.32%.

The index was up 20 points on Wednesday, fell 10 points on Tuesday after inching up 2 points on Monday.

The ICE BofAML US High Yield index rose 40.8 bps with the year-to-date return now 2.397%.

The index gained 52.8 bps on Wednesday, fell 12.3 bps on Tuesday and rose 15.1 bps on Monday.

The CDX High Yield 30 index gained 43 bps to close Thursday at 100.98.

The index surged 94 bps on Wednesday, fell 27 bps on Tuesday after gaining 55 bps on Monday.

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