Bombardier, Venture Global drive-by; forward calendar balloons; Hilcorp holds premium; DISH craters

By Paul A. Harris and Abigail W. Adams

Portland, Me., Nov. 6 – The high-yield new issue market burst to life on Monday in a session replete with drive-by deals, as well as announcements of multi-tranche, dual-currency deals expected to price later in the week.

Two drive-by issuers raised a total of $1.75 billion in a combined three tranches.

Venture Global LNG Inc. upsized to $1 billion from $750 million, as it tapped a pair of issues that priced in October.

The deal included a $500 million add-on to the 9 ½% bullet notes due Feb. 1, 2029 that priced at 101 to yield 9.238%.

It also included a $500 million add-on to the 9 7/8% notes due Feb. 1, 2032 that priced at 101 to yield 9.683%.

Price talk for both tranches was 100.5 to 101, so both tranches priced at the rich ends of talk.

The deal played to around $1.7 billion of orders across both tranches, with demand skewed toward the 2029 tranche, a bond trader said.

Meantime Bombardier Inc. priced an upsized $750 million issue (from $500 million) of seven-year senior notes (B2/B) at par to yield 8¾%.

The issue size increased from $500 million.

The yield printed in the middle of yield talk in the 8¾% area. Initial guidance was in the high-8% to 9% area.

Orders for the notes came in excess of $2 billion, a bond trader said.

Meantime the dollar-denominated new issue calendar underwent notable growth.

Deals announced Monday include Smyrna Ready Mix Concrete $1.1 billion, initial talk 8¾% area, pricing expected Tuesday.

Ineos Quattro Finance 2 plc’s €800 million equivalent dollars and euros, dollar notes whispered high 9% area (tranche size to be determined), roadshow through Tuesday.

EG Global Finance plc’s $1.6 billion equivalent dollars and euros, dollar notes whispered in 11½% area (tranche size to be determined), roadshow through Wednesday.

And InfraBuild Australia Pty Ltd.’s $350 million, initial talk 14¾% to 15%, pricing expected Thursday.

Meanwhile, the secondary space pulled back on Monday after the spectacular gains of the previous two sessions.

The cash bond market was off about 1/8 point as the market “took a breather,” from the post-Fed buy-a-thon that drove the market up more than 2 points last Thursday and Friday, a source said.

New issues and earnings-related news were the drivers of activity in the space with new issues continuing to trade with a healthy premium while earnings misses cratered certain credits.

Hilcorp Energy I, LP and Hilcorp Finance Co.’s 8 3/8% senior notes due 2033 (Ba2/BB+) were unchanged after a strong break, continuing to trade at a large premium to their issue price.

DISH Network Corp.’s senior notes cratered on Monday with investors again questioning the future viability of the company after a large earnings miss.

Hanesbrands, Inc.’s 9% senior notes due 2031 (B1/B+) crept higher in heavy volume with the company slated to report earnings later in the week.

Hilcorp holds premium

Hilcorp Energy’s 8 3/8% senior notes due 2033 held onto the strong premium gained on the break in heavy volume on Monday.

The notes appeared to have found their level and traded in a tight range of par ¾ to 101¼ throughout the session, a source said.

There was $38 million in reported volume.

The notes carried a healthy yield for BB paper, a source said.

Hilcorp priced an upsized $600 million, from $500 million, issue of the 8 3/8% notes at par in a Friday drive-by.

The yield printed at the tight end of the 8 3/8% to 8 5/8% yield talk.

DISH craters

DISH’s senior notes cratered on Monday as the company’s dismal earnings and resignation of its chief executive officer again sounded the alarm about its future viability.

DISH’s soon-to-mature 5 7/8% senior notes due Nov. 15, 2024 (Caa2/B-) were the most active in the debt stack.

The 5 7/8% notes plunged 8 points.

They launched the day at 91 and progressively collapsed.

The notes were trading in a wide range between 94 and 96 heading into the market close, a source said.

The yield blew past 20% with the notes trading with a yield of 22% to 24% heading into the market close.

There was $42 million in reported volume.

DISH’s 5 7/8% senior notes are among the first tranches in its looming maturity wall to come due.

The 5 7/8% notes are preceded by $1 billion outstanding in 2.375% convertible notes due March 15, 2024.

While the short-duration notes saw the heaviest volume, its longer duration unsecured notes also sank 8 to 11 points and its secured debt sank 4 to 5 points, a source said.

DISH’s 7¾% senior notes due 2026 were off 10½ points to trade as low as 59¾ with the yield 31 1/8% heading into the market close.

There was $12 million in reported volume.

DISH’s 5¾% senior secured notes due 2026 (B2/B) fell 5 points, changing hands at 70¾ with the yield 14% heading into the market close, a source said.

The 11¾% senior secured notes due 2027 dropped 4½ points to trade at 96¼ with the yield 13%.

There was $19 million in reported volume.

DISH’s capital structure was destroyed after a large earnings miss with investors once again questioning the future viability of the company.

While DISH’s pending merger with EchoStar had provided a glimmer of hope for the heavily leveraged company, DISH and EchoStar chair Charlie Ergen’s comments during the earnings conference call exacerbated investor concern, a source said.

Ergen reportedly mentioned the company had a narrow path to financial stability, which “freaked out,” investors, a source said.

Hanesbrands active

Hanesbrands’ 9% senior notes due 2031 continued to creep higher on the eve of the company’s earnings report.

The notes added ¼ to 3/8 point to close the day on a 95-handle.

They were changing hands in the 95½ to 95¾ context heading into the market close, a source said.

There was $22 million in reported volume.

Hanesbrands is slated to report earnings on Nov. 9.

The 9% notes have been on a steady downtrend since the company’s last earnings report, which was exacerbated by an S&P downgrade and late September announcement that it was exploring the potential sale of its Champion business.

Indexes

The KDP High Yield Daily index inched up 1 bp to close Monday at 48.83 with the yield 7.82%.

The index posted a weekly gain of 82 bps the previous week.

The ICE BofAML US High Yield index shed 3.2 bps with the year-to-date return now 7.137%.

The index posted a weekly gain of 217.2 bps the previous week.

The CDX High Yield 30 index closed Monday at 101.13.

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