Charter prices; calendar grows; new notes on the rise; PG&E negative; Uber improves

By James McCandless and Paul A. Harris

San Antonio, Oct. 15 – One high-yield issuer priced an add-on on Tuesday, while the active forward calendar took on some heft as the holiday-abbreviated week got underway and the secondary market remained fixed on new issues and topical names.

Charter Communications, Inc. priced a $500 million fungible add-on to the CCO Holdings, LLC/CCO Holdings Capital Corp. 4¾% senior notes due March 1, 2030 (Ba1/BB/BB+) at 101.25 to yield 4.597%, in a drive-by.

FXI Holdings, Inc. started a roadshow for a $775 million offering of seven-year senior secured notes, Virgin Australia Holdings Ltd. planned to start a roadshow on Thursday for $400 million of five-year senior bullet notes and Speedway Motorsports, LLC planned a $300 million offering of eight-year senior notes.

In the secondary, a trio of new notes from OCI NV, EG Group and TruckPro LLC were all seen rising as they became free to trade.

Utilities name PG&E Corp.’s issues moved lower after the company announced that it had entered into $34.46 billion in debt commitments.

Transporter Uber Technologies, Inc.’s paper improved despite news of another round of layoffs.

Charter

In Tuesday's primary market session Charter Communications priced a $500 million fungible add-on to the CCO Holdings, LLC/CCO Holdings Capital Corp. 4¾% senior notes due March 1, 2030 (Ba1/BB/BB+) at 101.25 to yield 4.597%, in a drive-by.

The reoffer price came at the rich end of price talk in the 101 area.

Also on Tuesday, in the high-grade market, Charter priced $1.5 billion of 4.8% senior secured notes due March 1, 2050 (Ba1/BBB-/BBB-) at Treasuries plus 260 basis points.

Initial talk was in the Treasuries plus 275 bps area.

The calendar

The active forward calendar took on some heft as the holiday-abbreviated week got underway.

FXI Holdings started a roadshow on Tuesday for a $775 million offering of seven-year senior secured notes, with proceeds to partially fund the acquisition of Innocor, Inc. a polyurethane foam producer from Red Bank, N.J.

In another acquisition financing Virgin Australia Holdings plans to start a roadshow on Thursday for a $400 million offering of five-year senior bullet notes (B2/B+).

Speedway Motorsports, LLC plans to refinance debt with the proceeds from a $300 million offering of eight-year senior notes (B1/BB).

A brief roadshow set to wrap up on Wednesday, according to an informed source.

Europe's session

In Europe eircom Finance DA priced a €350 million issue of five-year senior secured notes (B1) at par to yield 1¾%.

Original yield talk was in the 2% area, the source added.

Merlin Entertainments plc set price talk in its £635 million equivalent two-part offering of eight-year senior notes.

The deal features dollar-denominated notes talked to yield 7% to 7¼%, and euro-denominated notes talked to yield in the 5% area.

And Italy's Rossini Sarl guided a €650 million eight-year floating-rate notes (B3) with a 450 bps spread to Euribor, according to market sources.

Friday inflows

Cash flowed into the dedicated high-yield bond funds in moderately low volumes on Monday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $10 million of inflows on the day.

Actively managed high-yield funds saw $20 million of inflows on Monday, the source said.

Daily cash inflows were more vigorous on Friday, said the market source.

On that day the high-yield ETFs saw $482 million of inflows.

The actively managed funds saw $90 million of inflows on Friday, the source said.

New issues rise

New notes from three issuers became free to trade on Tuesday with positive results, traders said.

Netherlands-based producer of fertilizers and chemicals OCI’s new 5¼% senior secured notes due 2024 rose to 102 bid.

The upsized $600 million issue came to market as part of a two-tranche trade that also included an upsized €700 million issue.

In another Friday issuance, Blackburn, England-based filling station and fast food outlet operator’s new 8.5% senior secured notes due 2025 moved up to 103¾ bid.

Another two-tranche deal, $635 million of notes priced at par of Friday while €700 million of notes priced at par to yield 6¼%.

Memphis-based auto parts distributor TruckPro’s new 11% senior secured paper due 2024 finished at 95 bid after pricing at 94 bid on Friday.

The coupon came at the wide end of 10¾% to 11% coupon talk.

PG&E lower

PG&E’s notes moved lower in Tuesday’s session, market sources said.

The 6.05% notes due 2034 lost 1¼ points to close at 112¾ bid.

On Tuesday, the San Francisco-based bankrupt electric utility announced that it has entered into debt commitment letters under which the commitment parties agreed to provide $34.46 billion in bridge financing, Prospect News reported.

Not planning on entering the facilities, the company said it intends to obtain permanent financing on or before emerging from bankruptcy in the form of bank facilities, debt securities or a combination of those.

After weeks of deliberation, a bankruptcy court judge recently stripped the name of its exclusive right to submit a restructuring plan.

A committee of wildfire victims, creditors and other stakeholders lobbied for the move, arguing that allowing for competing plans would result in the best outcome.

The company is also catching heat from its recent decision to cut power to hundreds of thousands of customers in California as a wildfire prevention measure.

Uber improves

Transport name Uber’s issues were improving despite negative headlines, traders said.

The 8% senior notes due 2026 inched up ¼ point to close at 101½ bid. The 7½% senior notes due 2023 rose ¾ point to close at 102½ bid.

On Monday, the San Francisco-based transportation technology company announced that it had laid off 350 employees.

Chief executive officer Dara Khosrowshahi said the move is the “last wave” in the company’s recent firings.

The company continues to face pressure from the market after a disappointing initial public offering and upsets in its regulatory atmosphere.

Indexes up

Three high-yield indexes all saw positive movements on Tuesday.

The KDP High Yield Daily index added 5 basis points on Tuesday to finish at 71.16 with the yield dipping to 5.57%.

The index shot up 11 bps on Friday, tacked on 1 bps on Thursday and added 2 bps on Wednesday.

The ICE BofAML US High Yield index gained 15.2 bps with the year-to-date return now at 11.559%.

The index improved by 22.8 bps on Friday, gained 6.4 bps on Thursday and garnered 11.7 bps on Wednesday.

The CDX High Yield 30 index picked up 34.15 bps to 107.0506.

The index gained 34.82 bps on Friday, moved up 35.83 bps on Thursday and rose 36.32 bps on Wednesday.

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