Primary quiet; Antero Midstream lags; DISH gains post-earnings; Golden Nugget on a tear

By Abigail W. Adams

Portland, Me., Nov. 6 – The domestic high-yield primary market remained dormant on Friday with the forward calendar empty heading into the Nov. 9 week.

However, the coming week is expected to be a busy one provided the outcome of the election is as predicted – a Biden administration in the White House and Republican control of the Senate.

While votes were still being tabulated on Friday and no official winner had been declared, former vice president Joseph R. Biden was zeroing in on victory with the ballot counts in Pennsylvania and Georgia leaning in his favor.

Meanwhile, the strong rally in the secondary space waivered on Friday as WTI crude oil futures sank and the market saw some profit-taking.

While the cash bond market was down about 1/8 point at the open, it was largely flat heading into the close, sources said.

Antero Midstream Partners LP and Antero Midstream Finance Corp.’s newly priced 7 7/8% senior notes due May 15, 2026 (B3/B) were active with the notes lagging their issue price in secondary market activity.

Golden Nugget Inc.’s senior notes were in focus with the capital structure jumping 1 to 3 points, largely as a result of the supply/demand imbalance in the secondary space.

Earnings were also a major catalyst for trading activity.

DISH Network Corp.’s senior notes were making large gains in active trading following a large earnings beat.

Antero lags

Antero Midstream’s newly priced 7 7/8% senior notes were lagging their issue price in active trading on Friday.

The notes were marked at 99¼ bid, 99¾ offered on Friday.

They traded in a range of 99 3/8 to par throughout the session and stood poised to close the day at 99¾.

While the deal was heavily oversubscribed during bookbuilding, the pricing “didn’t leave much meat on the bone,” a source said.

The sell-off in WTI crude oil futures was also dragging down the level of the notes, sources said.

WTI crude oil futures dropped on Friday to settle at $37.41, a decrease of $1.38, or 3.56%.

Rising Covid-19 cases reawakened investor concern about demand, ending crude oil’s rally.

Futures were up more than 8% on the week heading into Friday’s session.

Antero Midstream priced an upsized $550 million, from $400 million, issue of the 7 7/8% notes at par in a Thursday drive-by.

Pricing came at the midpoint of talk for a yield of 7¾% to 8%. Initial guidance was in the low 8% area.

The deal played to heavy demand with $1.2 billion of orders from over 100 accounts before books closed, a source said.

Golden Nugget in demand

Golden Nugget’s senior notes continued their upward momentum on Friday, with the notes’ rise largely a product of the supply/demand imbalance in the secondary space.

The 8¾% senior notes due 2025 gained 3¼ points and stood poised to close the day at 90 5/8.

There was more than $25 million in reported volume making it one of the most actively traded issues during Friday’ session.

Golden Nugget’s 6 ¾% senior notes due 2024 were up more than 1 point and stood poised to close the day at 90¼.

There were more than $15 million of the bonds on the tape heading into the close.

The rise in the notes was largely a product of supply and demand.

With massive inflows over the past few sessions, ETFs bid up the secondary space, which sent investors in search of deals farther down the credit spectrum.

“BBs were getting squeezed tighter and tighter, so things like NUGGET got pulled up as a result,” a source said.

DISH’s earnings

DISH’s senior notes were on the rise following the telecommunication company’s earnings report.

The 7¾% senior notes due 2026 gained 2¼ points to close the day at 110¾, according to a market source.

The 7 3/8% senior notes due 2028 were also up 2¼ points to close the day at 105¾.

DISH reported a large third quarter earnings beat with revenue of $4.53 billion versus analyst expectations for revenue of $3.49 billion.

However, it is not clear if analyst expectations incorporated DISH’s acquisition of Boost Mobile, a source said.

DISH completed its $1.4 billion acquisition of Boost Mobile in July as it positions itself as a player in the wireless communications market.

However, DISH also announced recently that the rollout of its 5G network would be pushed back to 2021, a source said.

Indexes mixed

Indexes were mixed on Friday although all posted cumulative gains on the week.

The KDP High Yield Daily index rose 2 bps to 67.17 with the yield now 5.18%.

The index was up 45 bps on Thursday, 45 bps on Wednesday, 14 bps on Tuesday and 5 bps on Monday.

The index saw a cumulative gain of 111 bps on the week.

The ICE BofAML US High Yield index shaved off 9.5 bps with year-to-date returns now 2.292%.

The index jumped 64.3 bps on Thursday, 90.3 bps on Wednesday, 43.4 bps on Tuesday and 23.9 bps on Monday.

The index posted a cumulative gain of 212.4 bps on the week.

The CDX High Yield 30 index took off 17 bps to close the day at 106.04.

The index rose 98 bps on Thursday, 83 bps on Wednesday, 76 bps on Tuesday and 14 bps on Monday.

The index posted a cumulative gain of 254 bps on the week.

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