Tegna, WPX Energy, Nabors, M/I Homes price; MDC mixed; Icahn active

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 7 – The domestic high-yield primary market intensified its pace on Tuesday with four issuers pricing a total of $3.3 billion over five tranches.

Nabors Industries Ltd. priced an upsized $1 billion over two tranches (Ba2/BB-/BB-), Tegna Inc. priced a $1 billion issue of eight-year senior notes (Ba3/BB), WPX Energy, Inc. priced a restructured $900 million issue of 10-year senior notes (B1/BB-/BB), and M/I Homes Inc. priced an upsized $400 million issue of eight-year senior notes (B1/BB-).

The forward calendar continued to grow with CVR Energy, Inc. planning a roadshow for a $1.1 billion two-part offering of senior notes.

Meanwhile, all eyes were on the active pipeline of new paper set to enter the secondary space.

Tegna’s new notes had a strong break and were seen changing hands at a large premium in active trading.

MDC Holdings, Inc.’s recently priced 3.85% senior notes due 2030 (Ba2/BB+/BBB-) were lagging their issue price in heavy volume.

However, the Denver-based home building and financial services provider’s 6% senior notes due 2043 were on the rise during Tuesday’s session.

Icahn Enterprises LP and Icahn Enterprises Finance Corp.’s 4¾% senior notes due 2024 and 5¼% notes due 2027 were also active following the pricing of add-ons during Monday’s session with the notes trading at slight premiums to their reoffer price.

Rite Aid Corp.’s 6 1/8% senior notes due 2023 were posting gains after the pharmacy retailer announced a tender offer to exchange the notes for new 7½% senior notes due 2025.

New issue pace intensifies

On what was essentially the second day of full-scale operations in the new-issue market for 2020, with the full market forces gathered for action, the pace of primary activity intensified.

Deals came on quick-to-market timelines and played to big books, sources said.

Nabors Industries priced an upsized $1 billion amount of senior guaranteed notes (Ba2/BB-/BB-).

The deal, which had been in the market overnight, included a $600 million tranche of six-year notes that priced at par to yield 7¼%.

The yield printed at the tight end of the 7¼% to 7½% yield talk.

Nabors Industries also placed $400 million of eight-year notes which priced at par to yield 7½%, at the tight end of the 7½% to 7¾% yield talk.

The overall amount of issuance increased from $800 million.

The six-year notes tranche plays to $1 billion of orders, according to a bond trader who added that demand for the eight-year notes was $750 million.

Tegna priced a $1 billion of issue of eight-year senior notes (Ba3/BB) at par to yield 4 5/8% in a drive-by.

The yield printed at the tight end of yield talk in the 4¾% area. Initial guidance was in the high 4% area.

Early Tuesday afternoon the deal was playing to a $1 billion book, a bond trader said.

The notes saw a strong break and traded as high as 101 Tuesday afternoon, a source said.

WPX Energy priced a restructured $900 million issue of 10-year senior notes (B1/BB-/BB) at par to yield 4½% in a quick-to-market trade.

The yield printed 12.5 basis points inside of the 4 5/8% to 4¾% yield talk. Initial talk was in the high 4% area to 5%.

A proposed tranche of eight-year senior notes was withdrawn from the market, and the proceeds were shifted to the 10-year notes.

And M/I Homes priced an upsized $400 million issue of eight-year senior notes (B1/BB-) at par to yield 4.95% in a Tuesday drive-by, according to an informed source.

The issue size increased from $350 million.

The deal, which was priced on the investment grade syndicate desk, was playing to $700 million of demand earlier in the day, a trader said.

Roadshows

CVR Energy plans to start a roadshow on Wednesday for a $1.1 billion two-part offering of senior notes (existing ratings B1/BB-).

The deal features five-year notes, initially guided in the 5¼% area, and eight-year notes, initially guided in the 5¾% area.

Pricing is set for late in the Jan. 6 week.

Also on the high-yield road is Laredo Petroleum with a $900 million two-part offering of senior notes (expected ratings B3/B+) coming in a pair of $450 million tranches.

The deal roadshowed in New York on Tuesday, sources said, adding that there wasn't an empty seat in the house.

The short-duration tranche features five-year notes, initially guided to yield in the 9½% area.

The long tranche features eight-year notes initially guided to yield in the 10% area.

Laredo is expected to price Friday.

MDC lags

MDC Holdings’ newly priced 3.85% senior notes due 2030 were lagging their issue price in active trading on Tuesday.

The notes were changing hands at 99 5/8 in the late afternoon with more than $47 million in reported volume.

The amount on the tape was surprising given the small size of the issue. However, the lackluster reception in the secondary space was attributed to the notes’ tight pricing, sources said.

MDC priced an upsized $300 million issue of the 3.85% notes at par in a Monday drive-by.

Pricing came tighter than talk in the low 4% area. The issue size increased from $250 million.

While MDC’s newly priced notes saw a lackluster reception in the secondary space, the home building and financial services company’s 6% senior notes due 2043 were on the rise.

The 6% notes gained more than 1 point to 107 in active trading, according to a market source.

Icahn active

Icahn’s 4¾% senior notes due 2024 and 5¼% notes due 2027 were active in the secondary space following add-ons during Monday’s session.

The 4¾% notes were trading at a slight premium to their reoffer price and were changing hands at 102 3/8 in the late afternoon, according to a market source.

The notes saw more than $15 million in reported volume by the late afternoon.

Icahn’s 5¼% senior notes were changing hands at 101 5/8 in the late afternoon with more than $20 million in reported volume.

Icahn priced a $300 million add-on to its 4¾% notes at 102 and a $250 million add-on to its 5¼% notes at 101.435 in a Monday drive-by.

The add-ons raise the total principal amount of the 4¾% notes to $800 million and the 5¼% notes to $1 billion.

Rite Aid gains

Rite Aid’s 6 1/8% senior notes due 2023 were on the rise after the company announced an offer to exchange up to $600 million of the notes for new 7½% senior notes due 2025.

The 6 1/8% notes rose 1¼ points to 91 7/8 in the late afternoon, according to a market source.

More than $28 million of the notes were on the tape.

Rite Aid will exchange $1,000 in principal amount of the 6 1/8% notes for $1,000 in principal of the 7½% notes for those who tender their notes by the early deadline of Jan. 17.

After the early deadline, Rite Aid will exchange $1,000 in principal of the 6 1/8% notes for $950 in principal of the 7½% notes, Prospect News reported.

The 6 1/8% notes have been active and making significant gains since the pharmacy retailer announced better than expected third-quarter earnings in mid-December.

$174 million Monday inflows

The dedicated high-yield bond funds saw $174 million of daily net inflows on Monday, according to a market source.

High-yield ETFs saw $144 million of inflows on the day.

Actively managed high-yield funds saw $30 million of inflows on Monday, the source said.

With three of the present week's five sessions in the tally the combined funds are tracking $559 million of inflows for the week that will conclude with Wednesday's close, according to the market source.

Indexes mixed

Indexes were again mixed on Tuesday with some posting losses while others continued to see large gains.

The KDP High Yield Daily index dropped 6 points to 71.91 with the yield 4.86%. The index was up 2 bps on Monday.

The ICE BofAML US High Yield index gained 6.5 bps with year-to-date returns now 0.351%. The index jumped 81 bps on Monday.

The CDX High Yield 30 index dropped 15 bps to close Tuesday at 109.45. The index rose 2 bps on Monday.

© 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.