Clarios prices; Altice notes trade below par; Ford hits new low; funds add $3.06 billion

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 20 – In Thursday’s dollar-denominated new issue market, Clarios Global LP and co-issuer Clarios US Finance Co., Inc. priced an upsized $750 million issue (from $500 million) of five-year senior secured notes (B1/B+/B+) at par to yield 6¾%.

The yield printed at the tight end of yield talk in the 6 7/8% area. Initial guidance was in the low-to-mid 7% area.

There was a massive $1.6 billion of reverse inquiry in the deal, sources said.

Friday figured to be an active day in the primary market.

Kedrion Biopharma is on deck with a $790 million offering of Kevlar SpA 6½% senior secured notes due Sept. 1, 2029 (B3/B), talked Thursday at 84 to yield 9.966%, in line with earlier guidance. Along with price talk came covenant changes.

Allwyn Entertainment Financing (UK) plc is also scheduled to price its €1.3 billion three-part offering of senior secured notes (expected ratings BB/BB-) on Friday.

The sole dollar-denominated tranche comes in six-year fixed-rate notes with initial price talk in the 8% area. Earlier guidance was in the low-to-mid 8% area.

The deal also features euro-denominated seven-year fixed-rate notes with initial price talk in the 7½% area (earlier guidance mid-to-high 7% area) and six-year floating-rate notes with initial spread talk in the Euribor plus 425 basis points area (earlier guidance was in the mid-400 bps area). Price talk on the floating-rate notes is 98.5 to 99, in line with earlier guidance.

In a euro/sterling deal, Travelodge Hotels Ltd. plans to place £550 million equivalent of TVL Finance plc five-year senior secured notes in two tranches on Friday.

It features a sterling-denominated tranche of fixed-rate notes with initial price talk of 10¾% to 11% and euro-denominated floating-rate notes with initial talk of Euribor plus 550 bps at OID 96 to 97.

Tranche sizes remain to be determined.

Another soft day

Meanwhile, it was another soft day in the secondary space Thursday with a risk-off sentiment spreading through the market following weak earnings and warnings from Federal Reserve officials about deteriorating credit conditions.

While the cash bond market shed another 1/8 to ¼ point, trading activity remained muted with few making moves in the secondary space.

“I’m not sure what people are waiting for,” a source said.

Altice USA, Inc. subsidiary CSC Holdings, LLC’s new 11¼% senior guaranteed notes due 2028 (B1/B) continued to come in on Thursday with the notes giving back all gains since pricing to trade below issue price.

DISH Network Corp.’s short-dated 5 7/8% senior notes due Nov. 15, 2024 (B3/B) continued their downtrend with the notes giving back all gains from their late March rally to return to a recent low.

Ford Motor Credit Co. LLC’s most recently priced 6.8% senior notes due 2028 (Ba2/BB+/BB+) were also under pressure in active trade with the notes hitting their lowest level since breaking for trade.

While the market was soft on Thursday, high-yield mutual funds and exchange-traded funds saw an influx of cash over the past week with $3.06 billion entering the space in the week through Wednesday’s close, according to the Refinitiv Lipper Fund Flow report.

Altice below par

CSC Holdings’ new 11¼% senior guaranteed notes due 2028 continued to lose steam in the aftermarket with the notes falling below par in heavy volume on Thursday.

The 11¼% notes sank ½ to 5/8 point to close the day on a 99-handle.

They were changing hands in the 99 3/8 to 99 5/8 context heading into the close, a source said.

There was $58 million in reported volume.

The 11¼% notes saw a strong break and traded up to par ½ bid, 101 offered after the $1 billion issue priced at par on Tuesday.

However, they quickly gave back all gains and closed the previous session wrapped around par.

DISH down

DISH’s short-dated 5 7/8% senior notes due Nov. 15, 2024 continued their downtrend on Thursday with the notes giving back all gains from their late March rally to return to their recent lows.

The 5 7/8% notes were off 1½ point to close Thursday in the 80¾ to 81¼ context, a source said. The yield was about 21%.

There was $24 million in reported volume.

DISH’s 5 7/8% notes traded down to the same level in late March after heavy selling in the capital structure as market players began to question the ability of the company to meet its looming maturities.

However, the notes catapulted higher amid the market rally to trade as high as 89 in early April. The notes have since given back all gains.

Ford’s new low

Ford’s 6.8% senior notes due 2028, its most recently priced junk bond, hit a new all-time low on Thursday with the notes breaking below par for the first time since pricing.

The 6.8% notes were down ¾ point to close the day in the 99½ to par context.

There was $11 million in reported volume.

In addition to a soft day for the market, automakers were taking a hit on the heels of Tesla Inc.’s disappointing earnings.

“They’re trading down in sympathy,” a source said.

The 6.8% notes have largely traded on a par handle since the $1.5 billion issue priced at 99.987 on April 3.

Indexes

The KDP High Yield Daily index fell 7 points to close Thursday at 51.71 with the yield 7.16%.

The index was down 14 points on Wednesday, gained 3 points on Tuesday and fell 10 points on Monday.

The ICE BofAML US High Yield index fell 17.7 bps with the year-to-date return now 4.033%.

The index was down 22.9 bps on Wednesday, rose 14.6 bps on Tuesday and fell 19.8 bps on Monday.

The CDX High Yield 30 index was down 18 bps to close Thursday at 100.97.

The index was down 21 bps on Wednesday and 14 bps on Tuesday after inching up 3 bps on Monday.

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