Junk higher post-Fed minutes; Tegna lifts on tender offer; Atlas bounces; Carnival gains

By Paul A. Harris and Abigail W. Adams

Portland, Me., Feb. 22 – No dollar-denominated deals priced on Wednesday in the high-yield primary market, according to a market source.

Meanwhile, the secondary space pared its losses from the heavy selling on Tuesday with market tone lightening following the release of the most recent Federal Open Market Committee minute notes midsession.

The market was flat at the open with all eyes on the minute notes to help an uncertain market determine its future direction.

The minute notes contained few surprises with officials continuing to call for a restrictive monetary policy until a 2% inflation target is reached.

However, the market breathed a sigh of relief to learn there was near unanimous support for the 25 basis points rate increase and a step down in the pace of hikes, a source said.

The cash bond market was lifted ¼ to 3/8 point by the close.

With the new issue pipeline drying up amid the indecision regarding rates, topical news was a driver of activity in the space.

Tegna Inc.’s senior notes (Ba3/BB) made large gains on the heels of a tender offer and consent solicitation for the notes as Standard General LP zeroes in on completing its acquisition of the company.

Rand Parent, LLC’s 8½% first-lien senior secured notes due 2030 (Ba1/BB/BB+), backing the buyout of Atlas Air, improved on Wednesday after hitting a new all-time low the previous session.

Carnival Corp.’s senior notes outpaced the market with the notes gaining about 1 point as buyers returned to the market.

Tegna tenders

Tegna’s senior notes were in focus on Wednesday with the notes making large gains after Teton Merger Corp. announced a cash tender offer and consent solicitation for the notes.

Tegna’s 5% senior notes due 2029 jumped 3½ points to close the day at 95¾, a source said.

The notes were among the most actively traded issues in the secondary space with $22 million in reported volume.

The 4 5/8% senior notes due 2028 rose 3¾ points to close the day at 96 1/8.

There was $12.5 million in reported volume.

The 4¾% senior notes due 2026 gained 2 points to close the day at 96¾.

The notes made large gains after Teton launched a tender offer and consent solicitation in connection with Standard General’s long-delayed acquisition of the broadcasting company.

The company is offering an early tender price of 101.25 for those who tender by March 7 and provide consents under a concurrent consent bid.

The company is seeking to eliminate the requirement to make a change-of-control offer for the notes in connection with Standard General’s acquisition, Prospect News reported.

The change of control would be the 101 poison put, a source said.

The early tender offer, which includes a $30 premium, is higher than the poison put.

However, the tender offer is contingent on the completion Standard Charter’s acquisition.

While the notes made large gains with the tender offer a promising sign, there was still some apprehension over the completion of the acquisition, which was supposed to take place by the end of 2022, a source said.

The acquisition has come under regulatory scrutiny and has received political opposition with Senator Elizabeth Warren, Democrat of Massachusetts, urging the Federal Communications Commission to block it.

Atlas Air improves

After hitting a new all-time low on Tuesday, Atlas Air’s 8½% first-lien senior secured notes due 2030 improved in active trading.

The 8½% notes rose 3/8 to ½ point as the broader market improved.

The notes were changing hands in the 96 to 96¼ context heading into the market close with the yield about 9¼%, a source said.

There was $16 million in reported volume.

The notes, which have largely struggled below par since pricing, hit a new all-time low of 95½ amid the heaviness on Tuesday.

The leveraged buyout deal priced at par on Feb. 9.

© 2015 Prospect News.
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