Nexstar, Avis, Norbord price; Hexion, Michaels, Alpha Auto, Avon add-on on tap; new paper in focus, gains

By Paul A. Harris and Abigail W. Adams

Portland, Me., June 19 – The domestic high-yield primary market saw another active session on Wednesday with three deals pricing.

Nexstar Broadcasting, Inc. priced a $1.12 billion issue of eight-year senior notes (B3/B) at par to yield 5 5/8%.

Avis Budget Group, Inc. priced a $400 million issue of eight-year senior notes (B1/BB) at par to yield 5¾%.

Norbord Inc. priced a $350 million issue of eight-year senior secured notes (Ba1/BB+) at par to yield 5¾%.

The forward calendar also grew with Hexion Inc. starting a roadshow for a $450 million offering of eight-year senior notes (Ba3/B-) with pricing expected in the June 24 week.

Avon Products, Inc. also plans to price a $350 million add-on to its 7 7/8% senior secured notes due 2022.

Michaels Stores, Inc.’s $500 million offering of eight-year senior notes (B1/B) and Alpha Auto Group’s $225 million offering of five-year notes are expected to clear the market prior to the week’s close.

The euro-denominated high-yield market also saw activity with Washington, D.C.-based Cogent Communications Holdings Inc. in the market with a €135 million offering of five-year senior notes (B3/B-).

Meanwhile, the secondary space was “off to the races,” following Federal Reserve Chairman Jerome Powell’s press conference.

While coming in towards the close, the market was strong following the Federal Reserve’s announcement regarding rates, a source said.

New paper was the focus of trading activity with the deals to price on Tuesday continuing to gain strength during Wednesday’s session.

Clean Harbors, Inc.’s newly priced two tranches were the most actively traded issues of the day with the notes trading well above their issue price.

SiriusXM’s 4 5/8% senior notes due 2024 (Ba3/BB) and Cedar Fair, LP’s 5¼% senior notes due 2029 (B1/BB-) also continued to post gains in secondary trading after a strong start out of the gate.

However, Multi-Color’s two tranches of senior notes were mixed with the secured tranche trading at a large premium to their issue price but the unsecured tranche hovering at par.

Nexstar prices $1.12 billion

Amid a steady stream of new issue news on Wednesday, Nexstar Broadcasting priced a $1.12 billion issue of eight-year senior notes (B3/B) at par to yield 5 5/8%.

The yield printed in the middle of final yield talk in the 5 5/8% area. That talk was revised tighter from earlier talk in the 5 7/8% area.

BofA, Credit Suisse, Deutsche Bank, MUFG, SunTrust, BNP Paribas and Citizens were the joint bookrunners.

The Irving, Texas-based diversified media company plans to use the proceeds, along with $3.74 billion of bank debt, to help fund the acquisition of Tribune Media Co., repay Tribune debt and for general corporate purposes.

Avis Budget drive-by

Wednesday's sole drive-by deal came from Avis Budget Group, which priced a $400 million issue of eight-year senior notes (B1/BB) at par to yield 5¾%.

The yield printed at the tight end of yield talk in the 5 7/8% area and inside of initial guidance in the 6% area.

The deal was heard to be playing to $1 billion of demand, a trader said.

BofA was the left bookrunner for the debt refinancing deal.

Norbord in the middle of talk

Norbord priced a $350 million issue of eight-year senior secured notes (Ba1/BB+) at par to yield 5¾%.

The yield printed in the middle of yield talk in the 5¾% area and tight to the high 5% to 6% area early guidance, according to a trader.

The debt refinancing deal was heard to be playing to $500 million of orders at midday Wednesday, the trader added.

BofA and RBC were the joint bookrunners.

On deck

Looking to the final two sessions of the June 17 week, two deals are on the active calendar that are expected to clear ahead of the coming weekend.

There was no official talk on either deal, as of Wednesday's close, market sources said.

Michaels Stores was scheduled to roadshow its $500 million offering of eight-year senior notes (B1/B) through Wednesday.

Initial guidance is in the low 7% area.

And Alpha Auto Group is expected to price a $225 million offering of five-year notes ahead of the weekend. Initial talk is 8% to 8¼%.

Hexion starts roadshow

Hexion started a roadshow on Wednesday for a $450 million offering of eight-year senior notes (Ba3/B-).

The initial price talk is 8% to 8¼%, a trader said.

The roadshow runs through Monday.

Credit Suisse is the left bookrunner.

The Columbus, Ohio-based specialty chemicals company is using the proceeds to repay its debtor-in-possession (DIP) credit facilities and other distributions provided for under its plan of reorganization, as well as to repay fees and expenses related to its emergence from bankruptcy.

Avon also announced plans to price a $350 million tap of its 7 7/8% senior secured notes due Aug. 15, 2022 with proceeds to be used to fund a tender for the company’s 6.4% senior notes due 2020.

Cogent Communications euro deal

In the euro-denominated high-yield market. Washington, D.C.-based Cogent Communications Holdings was scheduled to shop a €135 million offering of five-year senior notes (B3/B-) on a global conference call with investors on Wednesday.

BofA is the sole bookrunner.

The Washington, D.C.-based internet services company plans to use the proceeds for general corporate purposes and/or to repurchase common stock or to pay special or recurring dividends to stockholders.

Clean Harbors in focus

Clean Harbors’ two tranches of senior notes (Ba3/BB+) were in focus on Wednesday with both tranches seen well above their issue price.

Clean Harbors 4 7/8% senior notes due 2027 were quoted at par ¾ bid, 101¼ offered and were changing hands between 101 and 101 1/8, sources said.

The bonds saw more than $113 million in reported volume by the late afternoon.

Clean Harbors’ 5 1/8% senior notes due 2029 were quoted at 101 bid, 101½ offered and were changing hands between 101 to 101¼, sources said.

More than $83 million of the bonds were on the tape by the late afternoon.

The notes had a strong reception in the secondary space with new paper in demand, especially paper deemed low risk, sources said.

Clean Harbors priced an upsized $845 million two-tranche senior notes offering in a Tuesday drive-by.

The deal featured a $545 million tranche of the 4 7/8% notes and a $300 million tranche of the 5 1/8% notes, both of which priced at par.

Both tranches priced at the tight end of talk.

SiriusXM gains

SiriusXM’s 4 5/8% senior notes continued to see gains in the secondary space, despite the deal nearly doubling in size and pricing at the tight end of talk.

The 4 5/8% notes were changing hands at par 5/8 bid, par 7/8 offered in the late afternoon with more than $76 million on the tape, according to a market source.

They were up about 3/8 point from Tuesday’s close.

SiriusXM priced a $1.5 billion issue of the 4 5/8% notes at par in a Tuesday drive-by.

The deal was upsized from $750 million and priced at the tight end of yield talk in the 4¾% area.

It was driven into the market by reverse inquiry, a source said.

Cedar Fair gains

Cedar Fair’s 5¼% senior notes due 2029 also saw nominal gains during Wednesday’s session.

The 5¼% notes were seen at 101 bid, 101¼ offered and were changing hands at 101 1/8 shortly before the market close, sources said.

There was more than $37 million of the bonds on the tape by the late afternoon.

The notes were strong out of the gate, closing Tuesday at 101.

Cedar Fair priced a $500 million issue of the 5¼% notes in a Tuesday drive-by.

Pricing came at the tight end of yield talk in the 5 3/8% area and inside of initial guidance in the 5 5/8% area.

Multi-Color mixed

Multi-Color’s recently priced tranches were mixed in the aftermarket.

However, they followed the trend established during bookbuildling with the secured notes in demand while the unsecured notes languished.

Multi-Color’s 6¾% senior notes due 2026 (B2/B) continued to make gains in secondary trading with the notes seen at 101 1/8 bid, 101 3/8 offered, according to a market source.

They were active with more than $32 million in reported volume by the late afternoon.

Multi-Color’s 10½% senior notes due 2027 (Caa2/B-), however, continued to hover around par in light trading volume.

“It took a lot to get them done,” a source said of the unsecured tranche.

Multi-Color priced an upsized $700 million issue of the 6¾% notes at par on Tuesday.

The tranche size was increased from $650 million and priced at the tight end of yield talk in the 6 7/8% area.

Multi-Color also priced a $690 million issue of the 10½% notes at par. The tranche size was downsized from $740 million and priced at the wide end of the 10¼% to 10½% talk.

While the secured tranche was oversubscribed during bookbuilding, the unsecured tranche experienced investor pushback and underwent covenant changes prior to pricing.

ETFs see Tuesday inflows

High-yield ETFs saw $372 million of daily cash inflows on Tuesday, the most recent session for which data was available at press time, a market source said.

The cash flows of the actively managed high-yield funds were absolutely flat on Tuesday, the source added.

Indexes gain

Indexes were again on the rise on Wednesday.

The KDP High Yield Daily index gained 10 basis points to close Wednesday at 70.32 with the yield now 5.63%.

The index gained 8 bps on Tuesday and shaved off 1 bp on Monday.

The ICE BofAML US High Yield index further solidified itself above the 9% threshold on Wednesday.

The index gained 16.3 bps with the year-to-date return now 9.483%.

The index was up 34.1 bps on Tuesday and was down 2.1 bps on Monday.

The index shot past the 9% year-to-date return threshold on Tuesday. It initially crossed the 9% threshold on June 11 only to fall below it the following day.

The CDX High Yield 30 index jumped another 50 bps to close Wednesday at 107.39. The index popped 70 bps on Tuesday after dropping 8 bps on Monday.

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