Cleveland-Cliffs prices; AssuredPartners, Twin River on tap; United Rentals weakens; Moss Creek, Brookfield gain

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 25 – The domestic high-yield primary market set the stage on Monday for another active week with one drive-by deal pricing and several more joining the forward calendar.

Cleveland-Cliffs Inc. priced a $750 million issue of 5 7/8% eight-year senior guaranteed notes (existing ratings B1/B+) at 96.125 to yield 6½% in a quick-to-market trade.

AssuredPartners, Inc. started a roadshow for a $475 million offering of eight-year senior notes (existing ratings Caa2/CCC+).

Twin River Worldwide Holdings, Inc. started a roadshow on Monday for a $350 million offering of eight-year senior notes (B3/B).

Drax Finco plc plans to start a roadshow on Tuesday for a $200 million add-on to its 6 5/8% senior notes due Nov. 1, 2025 (expected ratings S&P: BB/Fitch: BB).

And JPW Industries, Inc. plans to conduct an investor roadshow for a $60 million offering of notes, which mirror its 9% senior secured notes due Oct. 1, 2024 (B3/B).

The European primary market also saw its forward calendar grow with Conus Real Estate AG beginning a roadshow for a €400 million offering of five-year senior secured notes (S&P: B-).

EG Group also updated guidance on a €500 million minimum offering of senior secured notes due February 2025 (expected B2/confirmed B+/confirmed B+).

Meanwhile, new paper remained in focus in the secondary space.

While still trading at a premium to their issue price, United Rentals (North America), Inc.’s 5¼% senior notes due 2030 (Ba3/BB-) were slightly weaker in active trading on Monday.

However, Moss Creek Resources Holdings, Inc.’s 10½% senior notes due 2027 (B3/B+) and Brookfield Property REIT Inc.’s 5¾% senior notes due 2026 (Ba3/BB+) continued to see gains.

Outside of the new paper, McDermott International Inc.’s 10 5/8% senior notes due 2024 were again on the rise in high-volume activity following an earnings beat.

Cleveland-Cliffs deep discount

In a Monday drive-by, Cleveland-Cliffs priced a $750 million issue of 5 7/8% eight-year senior guaranteed notes (existing ratings B1/B+) at 96.125 to yield 6½%.

The coupon came on top of coupon talk. The reoffer price came cheap to the 96.75 to 98 price talk.

Goldman Sachs was the sole bookrunner for the debt refinancing deal.

AssuredPartners starts roadshow

Dealers set the table for what figures to be a busy April-May crossover week.

AssuredPartners started a roadshow on Monday for a $475 million offering of eight-year senior notes (existing ratings Caa2/CCC+).

The roadshow wraps up on Wednesday.

BofA is the left bookrunner for the acquisition financing and debt refinancing deal.

Twin River roadshow

Twin River Worldwide Holdings started a roadshow on Monday for a $350 million offering of eight-year senior notes (B3/B).

Initial guidance has the debt refinancing deal coming with a yield in the 7% area, a trader said.

The deal roadshows through Thursday.

Credit Suisse is the left bookrunner.

Drax starts Tuesday

Drax Finco plans to start a roadshow on Tuesday for a $200 million add-on to its 6 5/8% senior notes due Nov. 1, 2025 (expected ratings S&P: BB/Fitch: BB).

Initial guidance has the deal coming at an issue price of 100.5.

Left global coordinator BofA will bill and deliver for the bridge loan refinancing deal from the Selby, England-based coal and biomass generator.

JPW brings mirror notes

JPW Industries plans to conduct an investor roadshow during the April 29 week for a $60 million offering of notes, which mirror its 9% senior secured notes due Oct. 1, 2024 (B3/B).

Goldman Sachs is the sole bookrunner.

The La Vergne, Tenn.-based company plans to use the proceeds, together with an equity investment and borrowings under its ABL facility, to fund the Baileigh Industrial, Inc. acquisition consideration, as well as to repay existing debt of Baileigh.

Conus Real Estate starts roadshow

Germany-based residential property developer Conus Real Estate began a roadshow on Monday for a €400 million offering of five-year senior secured notes (S&P: B-).

The roadshow wraps up on Thursday.

JPMorgan is the sole bookrunner.

Elsewhere,filling station operator EG Group updated guidance on a €500 million minimum amount of senior secured notes due February 2025 (expected B2/confirmed B+/confirmed B+).

The updated guidance comes tight to 5% initial talk, a trader said.

The euro-denominated notes are part of a €1,355,000,000 equivalent offering of the notes, which also feature a $500 million minimum tranche.

The deal roadshowed in Europe last week and is set to roadshow this week through Wednesday in the United States.

Initial guidance in the dollar-denominated notes is in the low 7% area, according to the trader.

United Rentals weakens

United Rentals’ 5¼% senior notes due 2030 were showing signs of weakening on Monday after making large gains after breaking for trade on Friday.

The 5¼% notes were changing hands around par ½ in the late afternoon, according to a market source. They were down about ¼ point from Friday’s close.

The notes remained active with more than $28.5 million on the tape by the late afternoon.

United Rentals priced a $750 million issue of the 5¼% notes in a Friday drive-by.

The yield printed at the tight end of yield talk in the 5 3/8% area.

Brookfield in focus

Brookfield Property’s 5¾% senior notes due 2026 dominated secondary market activity on Monday with the notes trading at a large premium to their issue price.

The notes were changing hands between 101 and 101 3/8, according to a market source. More than $94 million of the bonds were on the tape by the late afternoon.

Brookfield Property priced an upsized $1 billion issue of the 5¾% notes at par on Friday.

The issue size was increased from $750 million.

The yield printed in the middle of yield talk and initial guidance in the 5¾% area.

Moss Creek gains

Moss Creek Resources’ 10½% senior notes due 2027 were making large gains in active trading on Monday.

The notes were up 1¾ point to trade around 101 7/8 in the late afternoon, according to a market source.

More than $37 million of the bonds were on the tape during Monday’s session.

Moss Creek Resources priced a $500 million issue of the 10½% notes at par on Friday.

The yield came at the wide end of the 10¼% to 10½% yield talk and well wide of initial guidance in the 10% area, according to sources.

McDermott on the rise

McDermott’s 10 5/8% senior notes due 2024 continued their upward momentum on Monday following its first-quarter earnings report.

The 10 5/8% notes rose 2½ points, according to a market source. They were seen changing hands at 92¼ with more than $44 million of the bonds on the tape by the late afternoon.

While McDermott missed analyst expectations on earnings per share and EBITDA, the engineering, construction, procurement and installation company’s revenue came in slightly higher than expected, a market source said.

McDermott’s guidance for the fiscal year also beat analyst expectations.

Friday inflows

The daily cash flows of the dedicated high-yield bond funds were positive on Friday, the most recent session for which data was available at press time, a trader said.

High-yield ETFs saw $247 million of inflows on the day.

Actively managed high-yield funds saw $80 million of inflows on Friday, the trader said.

With Friday's numbers in the book, the combined high-yield funds’ net inflows for 2019 to the end of the April 22 week came to $15 billion, the source added.

Indexes mixed

Indexes launched the week as they ended the last – mixed.

The KDP High Yield Daily index slipped 1 basis point to close Monday at 70.40 with the yield now 5.77%. The index saw a cumulative loss of 21 bps on the week last week.

The ICE BofAML US High Yield index gained 9.8 bps with the year-to-date return now 8.849%.

The index saw a cumulative gain of 19.8 bps on the week last week.

The index shot past 8% year-to-date returns on April 8 after only recently surpassing the 7% threshold on March 26 and passing 6% year-to-date returns on March 11.

The CDX High Yield 30 index dropped 11 bps to close Monday at 107.58. The index saw a cumulative gain of 5 bps on the week last week.

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