Advisor Group, Cision, Dealer Tire on tap; Radiology Partners trades up; Station Casinos lags

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 27 – While no high-yield deals priced on Monday as volatility again roiled global capital markets, the forward calendar did grow.

Advisor Group Inc. started a roadshow for a $575 million offering of eight-year senior secured notes.

The deal joins Cision and Dealer Tire LLC on the forward calendar.

Meanwhile, the secondary space was heavy on Monday with concern over the spreading coronavirus dampening the risk on appetite that has pervaded the market in the new year.

High-yield ETFs were in the red on Monday after seeing a record single day outflow of $1.73 billion on Friday.

While the overall market was down, Radiology Partners, Inc.’s recently priced 9¼% senior notes due 2028 (Caa2/CCC+) were putting in a strong secondary market performance and were well above their issue price in active trading.

However, Station Casinos LLC’s 4½% senior notes due 2028 (B3/B-) were lagging their issue price.

Several recent deals were also losing their premiums in secondary trading.

After a previously strong performance, Albertsons Cos. Inc.’s 4 7/8% senior notes due 2030 shaved off more than 1 point with the notes again approaching par in high-volume activity.

While volume was lighter, the grocery store retailer’s 3½% senior notes due 2023 were holding up well despite the heavy day for the market.

With crude oil futures hitting their lowest point in three months, there was a sell-off in several energy names.

MEG Energy Corp.’s 7 1/8% senior notes due 2027 (B3/BB-/B+) gave up all of their gains and sank to a 98 handle on Monday.

The sell-off in Laredo Petroleum, Inc.’s recently priced 9½% senior notes due 2025 and 10 1/8% senior notes due 2028 (B3/B+) and Range Resources Corp.’s 9¼% senior notes due 2026 (B1/BB) continued on Monday with the notes now trading more than 10 points below their issue price.

Advisor Group roadshow

The, volatility that dampened activity in the new issue market on Friday continued to hold sway on Monday, sources said.

Amid a paucity of news Advisor Group started a roadshow for $575 million of eight-year senior secured notes. The roadshow is expected to conclude on Friday.

Advisor Group takes a place aboard a thin active forward calendar.

Cision is in the market with a $300 million offering of eight-year senior notes. Early talk is in the low 8% area.

And Dealer Tire is marketing $350 million of eight-year senior notes (expected ratings: Caa1/CCC). That deal is expected to price Wednesday. Initial talk is 8¾% to 9%.

Radiology Partners gains

While the overall market was down on Monday, Radiology Partners’ 9¼% senior notes due 2028 were putting in a strong performance in the secondary space.

The 9¼% notes continued to gain after a strong break on Friday. They were changing hands in the 101¾ to 102 3/8 context during Monday’s session, according to a market source.

More than $33 million of the bonds were on the tape by the late afternoon.

The notes traded as high as 102 after breaking for trade during Friday’s session.

Radiology Partners priced an upsized $710 million issue of the 9¼% notes at par on Friday.

The issue size increased from $610 million.

The yield printed at the tight end of the 9¼% to 9½% yield talk.

Station Casinos lags

Station Casinos’ 4½% senior notes due 2028 were lagging their issue price in secondary market activity.

The notes traded as low as 99¼ during Monday’s session and stood poised to close the day at 99¾, according to a market source.

The bonds saw more than $18 million in reported volume.

The notes were trading between par and par ¼ after breaking for trade on Friday.

Station Casinos priced an upsized $750 million issue of the 4½% notes at par on Friday.

The issue size increased from $500 million.

The yield printed at the tight end of the 4½% to 4 5/8% yield talk.

Albertsons trades off

Albertsons’ 4 7/8% senior notes due 2030 gave back much of their gains on Monday and were trading back down to par.

The 4 7/8% notes shaved off 1¼ points, a source said.

They traded as low as par on Monday but bounced off their low and stood poised to close the day at par ½, sources said.

With more than $36 million in reported volume, the notes were among the most active in the secondary space.

The 4 7/8% notes had traded as high as 102 after pricing.

While Albertsons 4 7/8% notes traded off, the grocery store chain’s 3½% notes due 2023 held up well, a market source said.

While the notes were off about ¼ point, they maintained a healthy premium and closed the day at 101.

While the tranche was tightly priced with a 3-handle, the short duration of the notes made them a less risky investment, a market source said.

Albertsons priced a $750 million tranche of the 3½% notes and a $1 billion tranche of the 4 7/8% notes at par on Jan. 22.

The $2.35 billion megadeal also included a $600 million add-on to the 4 5/8% senior notes due Jan. 15, 2027.

MEG Energy underwater

Following a strong performance after pricing, MEG Energy’s 7 1/8% senior notes due 2027 (B3/BB-/B+) sank to a 98 handle on Monday.

The 7 1/8% notes were down more than 1½ points to close the day at 98 3/8, a market source said.

They traded as low as 97¾ during Monday’s session.

The 7 1/8% notes were previously putting in a strong performance in the secondary space, trading as high as 102 soon after breaking for trade.

In a deal that was heard to be heavily oversubscribed, MEG Energy priced an upsized $1.2 billion issue of the 7 1/8% notes at par on Jan. 16.

Energy sell off

Several recent deals from the energy sector continued to sell off on Monday with new paper from Laredo Petroleum and Range Resources now up to 10 points below their issue price.

Laredo’s 9½% senior notes due 2025 dropped about 3 points to close Monday just south of 90.

The 10 1/8% senior notes due 2028 dropped another 4 points to close Monday at 89¾.

Laredo Petroleum priced a $600 million tranche of the 9½% notes and a $400 million tranche of the 10 1/8% notes at par on Jan. 10.

Range Resources’ 9¼% senior notes due 2026 shaved off another 2¼ points to close Monday at 90¼, according to a market source.

The Fort Worth, Texas-based oil and gas company priced a $550 million issue of the 9¼% notes at par on Jan. 9.

Most new paper was down on Monday and several recent deals were beginning to slip below par after previous strong performances.

However, Laredo Petroleum and Range Resources’ senior notes are the worst performing deals to have priced in 2020, according to a market source.

Crude oil futures continued their downward momentum on Monday, hitting a three-month low.

The barrel price of WTI crude oil for March delivery was down almost 3% in intraday trading but settled at $53.14, a decrease of $1.04 or 1.94%. Brent crude oil settled at $58.90, a decrease of $1.79 or 2.95%.

Indexes down

Indexes launched the week with losses after all saw cumulative losses on the week last week.

The KDP High Yield Daily index sank 34 bps to close Monday at 71.29 with the yield now 5.13%. The index saw a cumulative loss of 29 bps on the week.

The ICE BofAML US High Yield index dropped into negative territory on Monday. The index plunged 61.9 bps with the year-to-date return now negative 0.286%.

The index saw a cumulative weekly decline of 42.6 bps last week.

The CDX High Yield 30 index tumbled 70 bps to close Monday at 108.14. The index saw a cumulative loss of 78 bps on the week last week.

© 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.