Global Auto, Chobani, Antero price; DISH destruction continues; funds add $532.5 million

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 11 – Three issuers raised $2.15 billion with four junk-rated, dollar-denominated tranches on Thursday, the biggest day in the high-yield new issue market in over a month.

Naked into the world – or, at least the primary market – came first-time issuer Global Auto Holdings Ltd.

The privately held auto components company brought a hefty $1.05 billion of senior notes (B2/B+) in two evenly sized tranches.

And the deal came with no reverse inquiry, traders noted, tirelessly, throughout the week.

Books were slow to build, market sources heard.

At one point alternative structures were under consideration, a trader said.

Nevertheless the company got its deal done, structured as announced and within talk.

It included a $525 million tranche of five-year notes that priced at par to yield 8 3/8% and a $525 million tranche of eight-year notes that priced at par to yield 8¾%.

Both tranches priced at the wide ends of talk.

Chobani, LLC and Chobani Finance Corp., Inc. priced the year’s first triple-hooks deal (Caa1 or lower from Moody’s/CCC+ or lower from S&P) in a Thursday drive-by.

The company priced a $500 million issue of senior notes due July 1, 2029 (Caa1/CCC+) at par to yield 7 5/8%, at the tight end of talk.

Elsewhere, the session’s sole upsized deal came from Antero Midstream Partners LP and Antero Midstream Finance Corp.

They drove through with a $600 million issue (upsized from $500 million) of eight-year senior notes (Ba3/BB) that priced at par to yield 6 5/8%, in the middle of talk.

At Thursday’s close one deal remained on the active forward calendar as business scheduled to clear ahead of the extended holiday weekend ahead.

DirecTV Financing, LLC plans to price a $750 million offering of six-year senior secured notes (Ba3/BB/BBB-) on Friday.

The deal is talked to yield in the 9% area, tight to initial guidance in the low-9% area.

‘Nice turnaround’

Meanwhile, the highly anticipated Consumer Price Index report came and went on Thursday with the report doing little to change the market’s rate expectations.

The cash bond market was initially soft following the report’s release with the CPI print coming in higher than expected.

However, the market firmed as Treasuries rallied mid-session with the 10-year yield closing the day below the 4% threshold.

“There was a nice turnaround,” a source said, with the cash bond market eking out nominal gains by the close.

New and recent deals continued to put in solid performances in the secondary market.

Hilton Grand Vacations Inc.’s 6 5/8% senior secured notes due 2032 (Ba2/BB+/BB+) were unchanged in active trade on Thursday with the notes holding on to the nominal gains made on the break.

Outside of new paper, topical news remained a driver of activity in the space with the fire-sale in DISH Network Corp.’s senior notes continuing.

The senior notes issued by DISH DBS Corp. plunged another 2 to 6 points with the asset reshuffle announced on Wednesday raising the ire of its creditors.

Meanwhile, high-yield mutual funds and exchange-traded funds saw inflows of $532.5 million in the week through Wednesday’s close, a source said.

Hilton flat

Hilton’s 6 5/8% senior secured notes due 2032 were flat in active trade on Thursday.

The 6 5/8% notes were trading in a tight range in the par to par 3/8 context throughout the session, a source said.

There was $108 million in reported volume.

The tight pricing of the notes left them little room for movement in the secondary.

Hilton priced a $900 million issue of the 6 5/8% notes at par on Wednesday.

The yield printed at the tight end of yield talk in the 6¾% area.

DISH tanks again

DISH’s senior notes continued to plunge on Thursday after the company announced it is transferring some of its unencumbered wireless spectrum licenses to the newly formed subsidiary EchoStar Wireless Holding LLC.

The 7¾% senior notes due 2026 (Caa2/B-) sank another 4½ points to close the day at 58½, a source said.

The yield jumped to 34%.

There was $60 million in reported volume.

The notes sank 7 points the previous session.

The 7 3/8% senior notes due 2028 tumbled another 6½ points to close the day at 43½.

The yield rose to 32%.

The notes sank 8 points the previous session.

There was $8 million in reported volume.

The 5 1/8% senior notes due 2029 sank another 6 points to close the day at 38½ with the yield now 27 7/8%.

There was $45 million in reported volume.

The notes sank 7 points the previous session.

DISH’s soon-to-mature 5 7/8% senior notes due Nov. 15, 2024 felt the sting on Thursday after being spared from any selling pressure the previous session.

The 5 7/8% notes fell 2 points to close the day at 92¾ with the yield about 15½%.

There was $45 million in reported volume.

DISH’s announcement of its asset reshuffle on Wednesday sparked a fire-sale in the company’s senior notes, which have plunged 10 to 15 points over the past two sessions.

DISH is transferring its assets to the EchoStar part of its capital structure and putting them out of reach of creditors, a source said.

The move was leaving the company’s debt with the weaker part of the newly merged company, another source said.

Indexes

The KDP High Yield Daily index inched up 1 basis point to close Thursday at 50.73 with the yield now 6.8%.

The index gained 14 bps on Wednesday, 10 bps on Tuesday and 11 bps on Monday.

The ICE BofAML US High Yield index inched up 7.8 bps with the year-to-date return now negative 0.349%.

The index added 22.6 bps on Wednesday, 14.5 bps on Tuesday and 31 bps on Monday.

The CDX High Yield 30 index gained 11 bps to close Thursday at 106.02.

The index was up 24 bps on Wednesday, 24 bps on Tuesday and 51 bps on Monday.

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