Range Resources prices; First Quantum taps; RIG falls flat; Altice at a premium; Grubhub gains

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 9 – The domestic high-yield primary market continued to roll out new deals on Thursday with one deal and two add-ons pricing.

Range Resources Corp. priced an upsized $550 million issue of six-year senior notes (B1), First Quantum Minerals Ltd. priced an upsized $750 million add-on to two series of notes and PGT Innovations, Inc. priced a $50 million add-on to its 6¾% senior notes due Aug. 1, 2026 (B2/B).

Genesis Energy, LP and Genesis Energy Finance Corp. priced a $750 million offering of eight-year senior notes (B1/B+).

Friday also promises to be an active session with Laredo Petroleum, Inc.’s $900 million two-part offering of senior notes (B3/B+) and CVR Energy, Inc.’s $1.1 billion two-tranche offering on deck.

Meanwhile, new paper remained in focus in the secondary space, although with mixed performances.

Transocean Ltd.’s 8% senior notes due 2027 (existing ratings Caa1/B-) were among the most actively traded issues during Thursday’s session.

However, the notes fell flat and were largely stuck at their issue price.

Altice Europe NV’s 5% senior notes due 2028 (B2/B) also saw heavy volume with the notes continuing to trade at a premium.

Nabors Industries Ltd.’s two tranches of senior notes (Ba2/BB-/BB-) remained active and continued to gain in secondary trading.

Outside of recent issues, Grubhub Inc.’s 5½% senior notes due 2027 continued their upward momentum in active trading following news the company was considering a sale.

Meanwhile, high-yield mutual funds and exchange-traded funds saw $1.21 billion enter the space for the week through Wednesday’s close, according to Refinitiv Lipper US Fund Flows.

Big upsize for First Quantum

A busy Thursday session in the primary market saw First Quantum Minerals price an upsized $750 million amount of senior notes in a revised two-part add-on transaction undertaken in a quick-to-market trade.

The deal included an upsized $500 million add-on to its 7¼% senior notes due April 1, 2023 that priced at 102.5 to yield 6.373%.

Subsequent to announcing that tranche, the company also offered a $250 million add-on to its 7½% senior notes due 2025 which priced at 103 to yield 6.804%.

Range Resources, PGT and Genesis

Following a brief roadshow, Range Resources priced an upsized $550 million issue of six-year senior notes at par to yield 9¼% on Thursday.

The issue size increased from $500 million.

The yield printed at the wide end of the 9% to 9¼% yield talk. Initial talk had the notes coming to yield in the low 9% area.

PGT Innovations priced a $50 million add-on to its 6¾% senior notes due Aug. 1, 2026 at 106.375, with a 5.159% yield to worst, in a quick-to-market Thursday trade.

The reoffer price came at the rich end of price talk in the 106.25 area.

Meanwhile, Genesis Energy priced a $750 million offering of eight-year senior notes at par to yield 7¾%.

The deal came in line at the wide end of official talk at 7½% to 7¾%, and also at the wide end of initial guidance in the mid-7% area.

Friday

Friday's announced business includes Laredo Petroleum, which has been on the road with a $900 million two-part offering of senior notes, including $450 million of five-year notes with initial talk in the 9½% area, and $450 million of eight-year notes with initial talk in the 10% area.

Reports on the Laredo deal have been somewhat mixed.

The company was heard to have filled every seat at its New York roadshow, earlier in the week.

On Thursday morning, the book was heard to be at deal size, a trader said, but added that there is a buzz in the market that orders will build significantly as the deal heads for the block, because of the perception that the bonds are priced to move.

Also on Friday, CVR Energy is expected to price $1.1 billion of notes in two tranches, fives and eights.

Guidance on the short duration tranche is in the 5¼% area, while the long tranche is guided in the 5¾% area.

Transocean flat

Transocean’s newly priced 8% senior notes due 2027 fell flat in active trading in the secondary space.

While the notes were gaining strength into the market close as crude oil futures rebounded from their lows, the 8% notes spent most of Thursday’s session wrapped around par, a market source said.

With more than $200 million in reported volume, the notes were among the most actively traded issues during the session.

Transocean priced a $750 million issue of the 8% notes at par in a Wednesday drive-by.

Pricing came tight to talk for a yield in the low 8% area.

Altice at a premium

Altice’s 5% senior notes due 2028 continued to trade at a healthy premium in the secondary space.

The 5% notes were changing hands just shy of 101 in heavy volume on Thursday, according to a market source.

More than $112 million in reported volume was on the tape by the late afternoon.

The notes saw a strong break and were trading in the par ½ to par ¾ context heading into the market close on Wednesday.

The 5% notes were the sole dollar-denominated tranche in Altice’s three-tranche dual-currency megadeal that included two euro-denominated tranches totaling €1.7 billion.

Altice priced the $1.2 billion tranche of the 5% notes at par on Wednesday.

Pricing came at the tight end of the 5% to 5¼% talk.

The deal also included a €600 million tranche of five-year notes that priced at par to yield 2¼% and a €1.1 billion of eight-year notes priced at par to yield 3%.

Nabors gains

Nabors’ two tranches of senior notes continued to gain in the aftermarket.

The Houston-based oil and gas drilling company’s 7¼% senior notes due 2026 traded up to 102 in decent volume on Thursday, according to a market source.

The bonds saw more than $22 million in reported volume.

They were changing hands in the 101½ to 101¾ context during Wednesday’s session.

The 7½% senior notes due 2028 also continued to gain and closed Thursday just shy of 102 after also trading in the 101½ to 101¾ context on Wednesday.

Nabors priced a $600 million tranche of the 7¼% notes and a $400 million tranche of the 7½% notes at par on Tuesday.

Both parts were heavily oversubscribed, sources said.

Higher-rated credits in the energy sector have been in demand as investors look to the sector for yield in a high-yield market were yield has been scarce, sources said.

Grubhub’s run

Grubhub’s 5½% senior notes due 2027 were making large gains in active trading following news the company was exploring a sale.

The 5½% notes rose another 2 1/8 points to 99 7/8 in high volume activity on Thursday, according to a market source.

The bonds saw more than $40 million in reported volume by the late afternoon.

The bonds also rose more than 3 points on Wednesday.

News broke on Wednesday that the food delivery company had hired financial advisors to explore strategic options, including a possible sale.

Grubhub priced a $500 million issue of the 5½% notes at par in June 2019.

The notes have languished below par since October when the company announced disappointing third-quarter earnings.

Indexes mixed

Indexes remained mixed on Thursday as they have been for much of the week.

The KDP High Yield Daily index dropped 4 points to 71.85 with the yield now 4.86%.

The index was down 2 bps on Wednesday and 6 bps on Tuesday after a 2 bps gain on Monday.

The ICE BofAML US High Yield index gained 4.3 bps with year-to-date returns now 0.394%. The index was up 3 bps on Wednesday, 6.5 bps on Tuesday and jumped 81 bps on Monday.

The CDX High Yield 30 index gained 19 bps to close Thursday at 109.76. The index gained 12 bps on Wednesday, dropped 15 bps on Tuesday and rose 2 bps on Monday.

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