Vivint prices in junkland; Everi outperforms; Victoria’s Secret at a premium; Elastic flat

By Abigail W. Adams

Portland, Me., July 1 – The domestic high-yield primary market saw one deal price on Thursday.

Vivint (APX Group, Inc.) priced a downsized $800 million issue of eight-year senior notes.

The deal is expected to be the last of the week.

Meanwhile, it was a quiet start to the third quarter in the secondary space with the cash bond market continuing to grind near record tights.

The market closed the first half of the year with returns in the 2½% to 3% range with full-year returns anticipated to be between 5% to 6%, a source said.

There was some chatter about the Federal Reserve beginning to taper its bond purchases sooner than anticipated, which could alter the current trajectory of the market.

However, until that happens, the market is expected to remain strong.

“You can’t fight the Fed,” a source said.

New paper continued to dominate the tape with the issues to price during Wednesday’s session following mixed trajectories.

Everi Holdings Inc.’s 5% senior notes due 2029 (B3/B/BB-) maintained the large gains made after breaking for trade with the notes continuing to trade more than 2 points above their issue price.

Victoria’s Secret & Co.’s 4 5/8% senior notes due 2029 (B1/B+) were also putting in a solid performance with the notes trading with a decent premium.

However, Elastic NV’s 4 1/8% senior notes due 2029 (B1/B+) largely fell flat with the notes near their issue price.

Meanwhile, high-yield mutual and exchange-traded funds had their second consecutive week of inflows with $893 million entering the space, according to the Refinitiv Lipper US Fund Flows report.

Thursday’s primary

Vivint (APX Group, Inc.) was the only U.S. high-yield issuer to sell bonds on Thursday, as it priced a downsized $800 million issue of 5¾% eight-year senior notes (Caa1/CCC) at par, at the tight end of talk, and inside of early guidance.

The issue size decreased from $900 million with the shift of $100 million of proceeds to the concurrent term loan.

The downsize notwithstanding, the bond deal was heard to be three-times oversubscribed, a trader said.

The new paper had a strong break. It traded up to par ¾ bid, 101 offered soon after breaking for trade, a source said.

The Vivint deal cleared the domestic calendar.

The new issue bourse is expected to remain dormant in the abbreviated Friday session, with the Securities Industry and Financial Markets Association recommending an early 2 p.m. ET bond market close ahead of the extended Independence Day weekend.

Everi outperforms

Everi’s 5% senior notes due 2029 continued to outperform in the secondary space with the notes trading at a large premium to their issue price.

The 5% notes continued to trade at 102½ bid, 103 offered, a source said.

While the deal came tighter than talk, the notes from the Las Vegas-based provider of gaming products and content seemed cheap compared to the market.

Most new issues were coming in the 4% area, a source said.

Everi priced a $400 million issue of the 5% notes at par on Wednesday.

The yield printed tighter than yield talk in the 5¼% area.

Victoria’s Secret at a premium

Victoria’s Secret’s 4 5/8% senior notes due 2029 were putting in a solid performance in the secondary space.

The notes were changing hands at par ¾ bid, 101¼ offered, a source said.

The deal priced as part of L Brands, Inc.’s plan to spin off the struggling brand into its own publicly traded company.

Victoria’s Secret priced an upsized $600 million, from $500 million, issue of the 4 5/8% notes at par on Wednesday.

The yield priced tighter than the 4¾% to 5% yield talk.

Proceeds will go to fund a cash payment to L Brands in respect to the spinoff.

The deal was heard to have been almost fully subscribed by reverse inquiry.

Elastic flat

Elastic’s 4 1/8% senior notes due 2029 remained hovering around their issue price in the secondary space.

The notes were marked at par bid, par ¼ offered on Thursday.

The notes were “priced to perfection,” and have not moved much since breaking for trade, a source said.

Elastic priced an upsized $575 million, from $500 million issue, of the 4 1/8% senior notes at par on Wednesday.

The yield printed at the tight end of yield talk in the 4¼% area.

Indexes rise

Indexes were on the rise on the first day of the third quarter, extending a strong run in the first half of the year.

The KDP High Yield Daily index rose 6 points to close Thursday at 70.21. The index gained 4 points on Wednesday, 5 points on Tuesday and 4 points on Monday.

The CDX High Yield 30 index rose 4 basis points to close Thursday at 110.24.

The index was flat on Thursday after dropping 3 basis points on Tuesday and 17 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.