Station Casinos, United Rentals, Alcoa price; Xerox, Chemours gain; funds add $346.7 million

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 7 – An active session in the high-yield primary market saw three issuers, each bringing a single tranche of notes, raise $2.35 billion.

Executions appeared solid, with one deal pricing inside of talk, one at the tight end and one in the middle of talk.

United Rentals (North America), Inc. priced a $1.1 billion issue of 6 1/8% 10-year senior notes (Ba2/BB+) at par, in the middle of talk.

Alcoa Nederland Holding BV priced a $750 million issue of 7 1/8% seven-year senior notes (Ba1/BB/BB+) at par, 12.5 basis points inside of talk.

And Station Casinos LLC priced a downsized $500 million issue of 6 5/8% eight-year senior notes (B3/B) at par, at the tight end of talk. The deal was downsized from $750 million, with $250 of proceeds shifted to the concurrent term loan, increasing the loan size to $1.57 billion from $1.32 billion.

Meanwhile, the secondary space was firm on Thursday with Jerome Powell’s second day of Congressional testimony lifting market sentiment.

While Powell stuck close to his mantra of caution and confirmation on Wednesday, he conceded on Thursday that Fed officials were close to receiving the confirmation needed.

Treasury yields came in slightly as market players eyed June as the start of the Fed rate-cut campaign, a source said.

The cash bond market was flat at the open but gained strength as the session progressed and closed with an 1/8 to ¼ point gain.

Xerox Holdings Corp.’s new 8 7/8% senior guaranteed notes due 2029 (B1/BB) continued to add after a strong break the previous session.

Outside of new and recent issues, Chemours Co.’s senior notes (B1/BB) were on the mend with the notes adding 2 to 3 points after the company disclosed the root of the accounting scandal that resulted in suspension of several executives.

The secondary space once again saw inflows with high-yield mutual funds and exchange-traded funds adding $346.7 million in the week through Wednesday’s close, a source said.

Xerox adds

Xerox’s 8 7/8% senior guaranteed notes due 2029 continued to add after a strong break with the strong demand for the notes seen during bookbuilding following them into the secondary space.

The 8 7/8% notes added ¼ point.

The notes traded as high as 101¼ but settled into a par 7/8 to 101 1/8 context heading into the market close, a source said.

There was $72 million in reported volume.

Xerox priced an upsized $500 million, from $400 million, issue of the 8 7/8% notes at par on Wednesday.

The yield printed 12.5 bps inside of the 9% to 9¼% yield talk.

Chemours gains

Chemours’ senior notes were on the mend on Thursday as the company released details of the accounting probe that resulted in several members of the company’s leadership being placed on leave.

The senior notes added 2 to 3 points in active trade after the company announced that the financial irregularities were the result of executives delaying payment on some bills and collecting prematurely on others to boost their bonuses.

Chemours’ 5 3/8% senior notes due 2027 added about 2½ points.

The notes traded up to a 96-handle early in the session but lost steam as the session progressed to close the day in the 95¾ to 96¼ context, a source said.

The yield was 6 7/8%.

There was $16 million in reported volume.

The 4 5/8% senior notes due 2029 added 2 points to close the day on an 86-handle.

They were trading in the 86 to 86¼ context heading into the market close.

The yield was 7 5/8%.

There was $15 million in reported volume.

The 5¾% senior notes due 2028 added 3 points to trade up to a 92-handle.

The notes were trading in the 92 3/8 to 92 5/8 context heading into the market close.

The yield was 7¾%.

There was $15 million in reported volume.

Chemours’ notes saw a 4 to 5 point drop last week after the company announced that its CEO, CFO and accounting officer were placed on leave with earnings again delayed as it launched an accounting probe.

The cause of the scandal was a relief, a source said.

Indexes

The KDP High Yield Daily index gained 9 bps to close Thursday at 50.82 with the yield 6.79%.

The index was up 10 bps on Wednesday, up 6 bps on Tuesday and unchanged on Monday.

The ICE BofAML US High Yield index added 14.5 bps with the year-to-date return now 0.931%.

The index gained 14.9 bps on Wednesday, 7 bps on Tuesday and 8.3 bps on Monday.

The CDX High Yield 30 index was up 11 bps to close Thursday at 106.67.

The index was up 18 bps on Wednesday, down 20 bps on Tuesday and up 8 bps on Monday.

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