Altice Luxembourg, MGM China on tap; Cleveland-Cliffs in focus; Intelsat under pressure; WeWork jumps

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 30 – The European high-yield primary market dominated the news stream on Tuesday with one deal pricing and one more joining the forward calendar.

Sweden's Dometic Group AB priced a €300 million issue of seven-year senior notes (existing ratings Ba3/BB) at par to yield 3%.

Altice Luxembourg SA started a roadshow for a €2.8 billion equivalent offering of eight-year senior notes (existing ratings Caa1/B-).

While the European primary market was in the spotlight, the dollar-denominated market saw one cross-over emerging markets deal surface.

MGM China Holdings Ltd. plans to start an international roadshow on Wednesday for a $1.25 billion two-part offering of senior notes, with five- and seven-year maturities.

Meanwhile, the secondary space was largely unchanged on Tuesday with new paper continuing to dominate trading activity.

Cleveland-Cliffs Inc.’s 5 7/8% senior notes due 2027 (existing ratings B1/B+) were in focus on Tuesday with the notes trading at a slight premium to their issue price.

Altice’s junk bonds were active and posting nominal gains after announcing its new offering.

Intelsat SA’s junk bonds were under pressure on Tuesday after the satellite communications provider released disappointing earnings and slashed its forward guidance.

WeWork Cos. Inc.’s 7 7/8% senior notes due 2025 jumped in active trading following the company’s confidential IPO filing.

Dometic prices €300 million

Sweden's Dometic Group priced a €300 million issue of seven-year senior notes (existing ratings Ba3/BB) at par to yield 3%.

Joint bookrunner Nordea will bill and deliver for the debt refinancing and general corporate purposes deal.

Altice roadshows €2.8 billion

Altice Luxembourg started a roadshow on Tuesday for a €2.8 billion equivalent offering of eight-year senior notes (existing ratings Caa1/B-).

The offer is coming in dollar- and euro-denominated tranches with sizes to be determined.

Goldman Sachs is the left bookrunner. BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Morgan Stanley and SG are the joint bookrunners.

The telecommunications and mass media company plans to use the proceeds to partially refinance $2.9 billion and €2.075 billion of its 2022 notes.

EG update

Filling station operator EG Group updated guidance on a $500 million minimum amount of senior secured notes due February 2025 (B2/B/B+) in the 7% area.

The updated guidance comes tight to initial talk in the low 7% area.

Talk on the €500 million minimum tranche was updated to the 4¾% area, tight to 5% initial talk, on Monday.

The euro- and dollar-denominated notes are part of a €1,355,000,000 equivalent offering, which roadshowed in Europe last week and is set to roadshow this week through Wednesday in the United States.

MGM China

The small amount of news that the dollar-denominated market generated on Tuesday had one foot planted in emerging markets.

MGM China Holdings plans to start an international roadshow on Wednesday for a $1.25 billion two-part offering of senior notes with five- and seven-year maturities.

The deal roadshows on the East Coast of the United States this week and in Singapore and Hong Kong early in the April 6 week.

BofA Merrill Lynch and Deutsche Bank are the global coordinators for the debt refinancing and general corporate purposes deal.

Teekay eyed

Meanwhile, some market watchers were anticipating news on Tuesday regarding the Teekay Corp. $300 million offering of five-year senior secured notes (B2/B+), which began roadshowing on April 24.

As the market awaits updated pricing and timing information, the latest guidance is in the 10% to 10¼% area, a trader said.

The Hamilton, Bermuda-based company plans to use the proceeds to fund a tender offer for its 8½% senior notes due 2020.

Cleveland-Cliffs in focus

Cleveland-Cliffs’ 5 7/8% senior notes due 2027 were in focus on Tuesday with the notes trading at a slight premium to their issue price.

The 5 7/8% notes were seen changing hands at 96 5/8 in the late afternoon.

More than $68 million of the bonds were on the tape by the late afternoon, according to a market source.

Cleveland-Cliffs priced a $750 million issue of 5 7/8% notes at 96 1/8 to yield 6½% in a Monday drive-by.

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

Altice active

Altice’s senior notes were active and making gains following the company’s launch of a new offering.

Altice’s 7 5/8% senior notes due 2025 were up about 3/8 point to 93 5/8 by late Tuesday afternoon, according to a market source.

The notes were the most active in Altice’s capital structure with more than $45 million of the bonds on the tape.

Altice France’s 7 3/8% senior notes due 2026 were up ¾ point to 101 5/8 with about $31 million of the bonds on the tape.

Altice’s 7¾% senior notes due 2022 were changing hands just shy of 102 with about $20 million of the bonds on the tape.

Intelsat under pressure

Intelsat’s junk bonds were under pressure on Tuesday following the release of disappointing earnings and a reduction in the company’s forward guidance.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 were the most active in the capital structure.

The notes dropped 1 7/8 points to 75 5/8, according to a market source. More than $35.5 million of the bonds were on the tape.

Intelsat’s 7¾% senior notes due 2021 dropped 2½ points to 93. The 9½% senior notes due 2023 dropped 2 points to 92½.

Intelsat’s junk bonds were under pressure after the satellite communications provider reported a year-over-year decrease in first-quarter revenue and adjusted EBITDA.

Intelsat also lowered its guidance for 2019, a market source said.

WeWork jumps

WeWork’s 7 7/8% senior notes due 2025 jumped in active trading on Tuesday after news surfaced the company had confidentially filed for an IPO.

The 7 7/8% notes rose almost 4 points to close the day at 99, according to a market source.

More than $22 million of the bonds were on the tape by the late afternoon.

News broke late Monday that the co-working space company had filed with the Securities and Exchange Commission for an IPO with the timeline to-be-determined.

Monday inflows

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

High-yield ETFs saw a modest $16 million of inflow on the day.

Actively managed high-yield funds saw $125 million of inflows on Monday, the source said.

Indexes mixed

Indexes were again mixed on Tuesday with some posting nominal gains and others losses.

The KDP High Yield Daily index slipped 1 basis point to close Tuesday at 70.39.

However, the yield remained flat at 5.77%. The index was also down 1 bp on Monday after a cumulative loss of 21 bps on the week last week.

The CDX High Yield 30 index rose 5 bps to close Tuesday at 107.63. The index was down 11 bps on Monday after a cumulative gain of 5 bps on the week last week.

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