Popular prices, Fortress on tap; Refinitiv accelerates timing; PetSmart, Staples gain on earnings

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 11 – The domestic and European primary market were active on Tuesday with each of a dollar-denominated, euro-denominated and sterling-denominated deal pricing during the session.

Popular, Inc. priced $300 million of five-year senior notes (B2/BB-/BB-) at par to yield 6 1/8% on Tuesday.

Jaguar Land Rover Automotive plc priced a downsized €500 million issue of senior bullet notes due Jan. 31, 2026 (Ba2/BB/BB+) at par to yield 4½%.

Ei Group plc priced a £150 million issue of 5.5-year senior notes (S&P: B) at par to yield 7½% on Tuesday.

The forward calendar continued to fill in with Fortress Transportation and Infrastructure Investors in the market with a $300 million offering of seven-year senior notes (current ratings B1/B+).

Meanwhile, Refinitiv’s $5.5 billion equivalent offering of senior notes may price on Friday with the deal playing to massive demand.

After a slow start to the week, trading activity picked up in the secondary space on Tuesday.

PetSmart Inc.’s junk bonds were in focus and making large gains after the company reported earnings.

Staples, Inc.’s 8½% senior notes due 2025 were also on the rise in high-volume trading after reporting positive numbers.

Tesla Inc.’s 5.3% senior notes due 2025 remained major volume movers in the secondary space and continued to inch up from Friday’s lows.

Fortress brings $300 million

Fortress Transportation and Infrastructure Investors joined the forward calendar with an offering of $300 million of seven-year senior notes (current ratings B1/B+).

Initial price talk is in the 6½% area, a trader said.

The deal was scheduled to be marketed by means of an investor conference call on Tuesday and to price late in the Sept.10 week.

Morgan Stanley & Co., Barclays and JP Morgan Securities LLC are the joint bookrunners.

The New York-based company plans to use the proceeds to repay $125 million of borrowings under its revolver with remaining proceeds to be used for general corporate purposes.

Popular prices $300 million

Popular priced $300 million of five-year senior notes (B2/BB-/BB-) at par to yield 6 1/8%.

J.P. Morgan, Barclays, Goldman Sachs & Co. and Morgan Stanley are the joint bookrunners.

The San Juan, Puerto Rico-based banking company plans to use the proceeds, along with available cash, to redeem $450 million of its 7% senior notes due 2019.

Refinitiv in demand

There is a high probability the $13.5 billion in bonds and loans backing the Refinitiv deal will be priced in Friday executions, a market source said.

Demand for the dollar-denominated tranches of the $5.5 billion equivalent of junk bonds is massive, sources say. (See related article.)

Refinitiv has been on the road since last week for its four-tranche offering of secured and unsecured notes.

The deal was expected to remain in the market until the Sept. 17 week.

Jaguar Land Rover downsizes

Jaguar Land Rover Automotive plc priced a downsized €500 million issue of senior bullet notes due Jan. 31, 2026 (Ba2/BB/BB+) at par to yield 4½% on Tuesday.

The issue size was decreased from €700 million

The yield printed in the middle of yield talk in the 4½% area and at the wide end of initial guidance in the low to mid 4% area.

Physical bookrunner HSBC will bill and deliver. BNP Paribas, Deutsche Bank and Goldman Sachs International are also physical bookrunners.

The Coventry, United Kingdom-based automobile manufacturer plans to use the proceeds for general corporate purposes, which include supporting its growth and capital spending plans.

Ei Group prices £150 million

Ei Group priced a £150 million issue of 5.5-year senior notes (S&P: B) at par to yield 7½% on Tuesday.

The yield printed at the tight end of the 7½% to 7¾% yield talk.

Joint global coordinator and bookrunner Deutsche Bank will bill and deliver. BNP Paribas was also a joint global coordinator and bookrunner. Lloyds Bank and NatWest Markets are joint bookrunners.

The Solihull, West Midlands, U.K.-based pub company plans to use the proceeds to fully or partially repay its convertible securities.

Remaining proceeds will be retained as cash on the balance sheet intended to be applied toward repayment of the 2018 notes at maturity.

PetSmart in focus

PetSmart’s struggling junk bonds were on the rise on Tuesday after the pet product retailer reported earnings, a market source said.

PetSmart’s 7 1/8% senior notes due 2023 jumped 5 points on Tuesday after a conference call with investors.

The notes were trading on a 67 handle on Monday. They jumped to a 73 handle on Tuesday and were seen trading between 73¼ and 73½, according to a market source.

With more than $36.5 million of the bonds on the tape by the late afternoon, the 7 1/8% notes were the most actively traded issue of the day.

While less active, PetSmart’s 5 7/8% notes due 2025 were also on the rise on Tuesday. The notes were up about 3 points with most trades between 84 and 84½, the source said.

About $20 million of the bonds were on the tape by late afternoon.

PetSmart’s notes marked their highest level in 2018 on Tuesday.

The junk bonds from the struggling retailer sank to its lowest levels in May after Amazon launched its own dog food line and a new CEO was appointed.

PetSmart currently has litigation pending against loan agent Citigroup related to the equity transfer of a portion of PetSmart’s stake in Chewy.com to a holding company.

The Chewy.com unit saw a 22% year-over-year revenue increase last quarter, thestreet.com reported.

Staples gains

Staples 8½% senior notes due 2025 were also on the rise after reporting positive earnings, a market source said.

The 8½% notes rose 2 points on Tuesday. They were seen trading around 95½ with more than $26 million of the bonds on the tape.

The office supply retailer reported a large increase in its EBITDA, a market source said.

Tesla inches up

Tesla’s 5.3% senior notes due 2025 remained major volume movers in the secondary space with the notes continuing to inch up after Friday’s crash.

The 5.3% notes were up another 3/8 point to trade between 84½ and 85 on Tuesday.

With more than $36 million of bonds on the tape, the notes were second only to PetSmart in trading volume.

Tesla’s junk bonds dropped to 82 bid, 83 offered on Friday, their lowest level since pricing, after the latest batch of headlines surrounding the electric car manufacturer and chief executive officer Elon Musk.

However, the notes were up about 1 point on Monday and continued to inch up on Tuesday, a market source said. There may be a feeling the notes were oversold, the source said.

Indexes mixed

Benchmarks for the high-yield secondary market were again mixed on Tuesday.

The KDP High Yield Daily index was down for the fifth consecutive trading day on Tuesday. The index dropped 4 bps to close the day at 70.23 with the yield now 5.89%.

The index was down 3 bps on Monday after posting losses for much of last week.

The CDX High Yield 30 index was again on the rise on Tuesday. The index was up 5 bps to close the day at 107.06. The index was up 17 bps on Monday after seeing a cumulative 2 bps drop last week.

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