Raising Cane’s prices $500 million; junk rebounds; Navient, Ford higher

By Paul A. Harris and Cristal Cody

Portland, Ore., Nov. 1 – Raising Cane’s Restaurants LLC priced Wednesday’s sole junk bond deal, a $500 million issue of 5.5-year senior notes (B3/B/BB-) that came at par to yield 9 3/8%, at the tight end of talk.

The debt refinancing deal was heard to have played to $2.3 billion of demand, according to a bond trader.

Meanwhile, although there were no new deal announcements on Wednesday, a November pipeline is coming into view, sources say.

Tranche details surfaced on $2.125 billion of debt financing supporting the leveraged buyout of Veritiv Corp. by Clayton, Dubilier & Rice LLC, according to a market source.

Financing includes $600 million of high-yield bonds via left lead Goldman Sachs & Co. LLC.

It also includes a $700 million term loan B via left lead RBS Securities Inc., and an $825 million ABL facility.

Some or all of those tranches are expected to hit the market near-term, likely in the Nov. 6 week, the source said.

Elsewhere EG Group is headed to market with senior secured notes, including some dollar-denominated notes, as part of a $2 billion equivalent debt refinancing effort that also features a $500 million equivalent amount of dollar- and euro-denominated syndicated term loan debt that was scheduled to launch on Wednesday.

Meantime Ineos Quattro plans to sell €800 million equivalent of dollar- and euro-denominated secured notes which are part of a debt refinancing and acquisition funding effort that also includes €2 billion equivalent of proposed syndicated loans which were set to kick off on a lender call at the beginning of the present week.

Finally, pending official word, some market watchers have been removing the Global Aircraft Leasing Co., Ltd. and Global Sea Containers II Ltd. $1.95 billion offering of five-year senior PIK toggle notes (Ba2//BB-) from their active calendars, as there has been no official word on the deal for three weeks.

The Global Aircraft offer has likely been shelved, a trader opined on Wednesday.

Secondary trading

The junk space overall was stronger Wednesday after the Federal Reserve left rates unchanged as widely expected by market economists.

“Bonds rebounded,” a source said. “The CDX is up 59 cents, the HYG is up 69 cents.”

New junk paper gained over the day.

Navient Corp.’s $500 million of 11½% senior notes due March 15, 2031 (Ba3/B+/BB-), priced in a Tuesday drive-by, improved in the secondary market.

Meanwhile, Ford Motor Co. and Ford Motor Credit Co. LLC’s senior notes (Ba2/BBB-/BBB-) continued to dominate the secondary market after S&P Global Ratings upgraded the issuers to high-grade.

“Ford is actually nine out of the busiest 20 names,” a source said.

Ford’s 7.45% notes due 2031 climbed 1 point to 102½ Wednesday.

Navient higher

Navient’s 11½% senior notes due March 15, 2031 (Ba3/B+/BB-) were traded at the par 1/8 to par 5/8 area Wednesday by the day’s end, a trader said.

The notes were quoted trading at par to par ¼ earlier Wednesday by another market source.

The student loan servicer sold the notes on Tuesday at 99.81 to yield 11½%, in line with yield talk and at the midpoint of initial guidance for a yield in the mid-11% area.

Fund flows

High-yield ETFS had $329 million of daily cash inflows on Tuesday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds, meanwhile, sustained $58 million of outflows on Tuesday, the source said.

The combined funds are tracking $943 million of net outflows on the week that will conclude with Wednesday’s close, according to the market source.

Indexes

The CDX High Yield 30 index climbed to 99.94 Wednesday after gaining 24 basis points Tuesday to 99.33.

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