goeasy drives by; Tallgrass joins junk calendar; Uniti, Windstream jump on merger chatter

By Paul A. Harris and Abigail W. Adams

Portland, Me., Feb. 20 – In Tuesday’s high-yield new issue action, goeasy Ltd. priced a $400 million issue of 5.3-year senior notes (Ba3/BB-) at par to yield 7 5/8%, at the tight end of talk, in a drive-by.

The active forward calendar also took aboard one offering.

Tallgrass Energy Partners, LP commenced marketing a $400 million offering of Prairie Acquiror LP senior secured notes due Aug. 1, 2029.

Initial guidance has the deal coming to yield 9¼% to 9½%, with pricing expected Thursday.

Meanwhile, a soft open in the secondary space gave way to a firm close as the cash bond market pared losses to close the day largely unchanged.

The flurry of activity surrounding new paper tempered on Tuesday with the majority of recent deals tucked away.

The primary market has been where investors are putting their energy and attention with getting a good allocation the play of the day, a source said.

TransDigm Inc.’s two tranches of first-lien senior secured notes (Ba3/B+) remained active although with little movement in their prices as the large, liquid issue traded alongside the broader market.

As market players awaited the new deals in the works, topical news was the driver of activity on Tuesday.

News that Windstream Communications and Uniti Group LP were in merger talks sparked large gains in both companies’ senior notes.

TransDigm active

TransDigm’s two tranches of first-lien senior secured notes remained active on Tuesday as the large, liquid issues have traded in line with the broader market.

The 6 3/8% senior secured notes due 2029 and the 6 5/8% senior secured notes due 2032 were lower in the morning but closed the day largely unchanged, a source said.

The 6 3/8% notes and 6 5/8% notes continued to trade in the same context.

They dropped down to par early in the session but eliminated losses to close the day largely unchanged with both tranches wrapped around par 3/8, a source said.

The 6 3/8% senior secured notes due 2029 and the 6 5/8% senior secured notes due 2032 had $20 million and $16 million in reported volume respectively.

TransDigm priced a $2.2 billion tranche of the 6 3/8% notes and a $2.2 billion tranche of the 6 5/8% notes at par on Feb. 12.

Windstream/Uniti together again

Windstream and Uniti were the names of the day after news broke the once conjoined companies were once again in merger talks.

Windstream’s 7¾% first-lien senior secured notes due 2028 (B3/B) jumped 5 points on the news.

The notes were trading in the 91½ to 92 context heading into the market close, a source said.

The yield tightened to about 10%.

With $23 million in reported volume, the notes were among the most actively traded in the secondary space.

Uniti’s 10½% senior secured notes due 2028 (B2/B) jumped 2 points to a 103-handle.

The notes were trading in the 103¼ to 103¾ context heading into the market close, according to a market source.

There was $16 million in reported volume.

Uniti’s 6½% senior notes due 2029 (Caa2/CCC) jumped 7 points to close the day wrapped around 74 with the yield about 13 7/8%, according to a market source.

There was $10 million in reported volume.

The 6% senior notes due 2030 were up 7 point to close the day at 70½ with the yield 13 3/8%.

“This is good for the bonds,” a source said.

News broke late Friday that Windstream and Uniti were in talks to merge in an all-stock transaction that would leave Uniti a publicly traded company.

Windstream and Uniti have a long and complicated history with Uniti formed through a spinoff from Windstream in 2015.

The spinoff included a leaseback arrangement for fiber optic cables.

Creditors of Windstream challenged the validity of the leaseback arrangement and their victory in court resulted in Windstream filing for bankruptcy in February 2019.

Windstream and Uniti were almost opponents in a court battle over the leaseback agreement but were able to settle their dispute in March 2020.

Windstream emerged from bankruptcy in September 2020.

Indexes

The KDP High Yield Daily index inched up 2 basis points to close Tuesday at 50.42 with the yield 6.94%.

The index was down 27 bps on the week last week.

The ICE BofAML US High Yield index added 10.4 bps with the year-to-date return now negative 0.095%.

The index was down 38.1 bps on the week last week.

The CDX High Yield 30 index shaved off 3 bps to close Monday at 106.03.

The index closed the week up 2 bps.

© 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.