Morning Commentary: Brightline, ION, Shelf Drilling notes on deck; Encino comes in

By Abigail W. Adams

Portland, Me., April 25 – The primary market stood poised for an active session with the three deals on the active calendar set to clear the market.

Brightline East LLC’s upsized $1.325 billion offering of senior secured notes due Jan. 31, 2030 (B/B), Shelf Drilling (North Sea) Holdings, Ltd.’s $300 million of 4.5-year senior secured first-lien notes and ION Corporates’ two-tranche dual-currency offering of five-year senior secured notes (B2/B) are on deck.

The activity comes on a heavy day for the market with the latest GDP print reawakening recession fears, a source said.

However, the new paper continued to play to strong demand with the dollar-denominated tranche of Helios Software Holdings, Inc. and ION Corporate Solutions Finance Sarl’s five-year senior secured notes upsizing and final pricing terms coming on the tight end of talk.

Meanwhile, the secondary space was again under pressure as a much softer than anticipated GDP print threw cold water on the goldilocks, soft-landing scenario the market had widely expected.

The cash bond market was off ¼ to ½ point as the two-year Treasury yield again surpassed 5%, a source said.

The heavy market conditions on Thursday dragged down the deals to clear the market the previous session with Encino Acquisition Partners Holdings, LLC’s 8¾% senior notes due 2031 (B3/B-/B) giving back some of the strong gains made on the break and Vail Resorts, Inc.’s 6½% senior notes due 2032 (Ba3/BB) dropping below par.

After outperforming on the break, Encino’s 8¾% senior notes due 2031 were off ½ point to trade in the par ¼ to par ½ context, a source said.

The $500 million issue priced at par on Wednesday and closed the previous session in the par 7/8 to 101 1/8 context.

Vail Resorts’ 6½% senior notes due 2032 were also off 3/8 to ½ point to trade on a 99-handle.

The 6½% notes were trading in the 99 5/8 to 99 7/8 context in active trade.

The $600 million issue priced at par in a Wednesday drive-by and closed the previous session in the par to par ¼ context.

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