USI notes, Griffin Global add-on price; DISH rockets higher; funds add $758.7 million

By Paul A. Harris and Abigail W. Adams

Portland, Me., Dec. 14 – A pair of speculative-grade drive-by issuers priced a combined $920 million face amount of junk on Thursday.

Both issues were unsecured.

USI Inc. priced a $620 million issue of eight-year senior notes (Caa1/CCC+) at par to yield 7½%, at the tight end of talk and well inside of initial guidance.

The deal points to a market that has unmistakably improved.

USI is the first triple-hooks deal (Caa1 to Caa3 from Moody’s/CCC+ to CCC- from S&P) to clear the market in nearly eight months.

The most recent prior deal to feature a triple C rating on both sides of the split was Trident TPI Holdings, Inc.’s 12¾% senior notes due December 2028 (Caa2/CCC+). That deal priced at 98.939 to yield 13% on April 25.

USI’s 7½% coupon came a whopping 525 basis points inside of Trident’s.

Elsewhere Thursday, Griffin Global Asset Management Holdings, Ltd. priced an upsized $300 million add-on (from $100 million) to the GGAM Finance Ltd. 8% senior bullet notes due June 15, 2027 at 101 to yield 7.64%.

The price came at the rich end of the 100.75 to 101 price talk. Early guidance was 100 to 100.5.

With Thursday’s action in the rearview mirror and year 2023 getting long in the tooth, the new issue market may still have a small way to run, especially given the conspicuously supportive market conditions presently in place, sources said.

Friday business is not out of the question, and quick-to-market deals might even appear during the Monday-Tuesday timeframe in the pre-holiday week ahead, they added.

Secondary shoots higher

Meanwhile, the secondary space continued to shoot higher on Thursday as Treasury yields continued their descent with post-Fed market exuberance extending for another session.

The 10-year fell 11.5 bps to break below a 4-handle and close the day at 3.91%.

The cash bond market continued its post-Fed surge with the market up another 1 to 1 3/8 point to set a new high for the year, a source said.

“The market is strong,” a source said, with buyers bidding up the overall space.

DISH Network Corp.’s senior notes continued to rocket higher after the strong gains the previous session with the market expecting the imminent completion of the company’s merger with EchoStar.

Community Health Systems, Inc.’s recently priced 10 7/8% senior secured notes due 2032 (Caa1/B-/B+) made large gains in heavy volume with the once struggling notes closing the day on a 102-handle.

Inflows continued to flood the market with high-yield mutual funds and exchange-traded funds adding $758.7 million in the week through Wednesday’s close, according to the Refinitiv Lipper Fund Flow report.

The inflow marked the sixth consecutive week of inflows with a cumulative $14.1 billion entering the space, reversing all outflows, a source said.

DISH rockets higher

DISH’s senior notes continued to rocket higher on Thursday with the market expecting the imminent completion of the company’s merger with EchoStar.

DISH’s soon-to-mature 5 7/8% senior notes due Nov. 15, 2024 (Caa2/B-) shot up another 3½ points to close the day on a 95-handle.

The notes were trading in the 95 to 95½ context heading into the market close, according to a market source.

The yield narrowed to about 11½%.

There was $50 million in reported volume.

The 7¾% senior notes due 2026 jumped 5 points to close the day wrapped around 71 with the yield 23½%.

DISH’s 11¾% senior secured notes due 2027 (B2/B) added 1 point to trade in the 103½ to 104 context with the yield 10 3/8%, according to a market source.

DISH’s notes surged with the market expecting the EchoStar and DISH merger to be completed in a matter of days after the Federal Communications Commission cleared it the previous week.

Community Health lifted

Community Health’s recently priced 10 7/8% senior secured notes due 2032 were lifted in the market rally with the once struggling notes now trading on a 102-handle.

The 10 7/8% jumped 1½ points in heavy volume.

They were trading in the 102 3/8 to 102 5/8 context heading into the market close.

There was $26 million in reported volume.

The notes struggled on the break with the notes on a 99-handle heading into the post-Fed rally.

Community Health Systems priced a $1 billion issue of the 10 7/8% notes at par on Monday.

Indexes

The KDP High Yield Daily index jumped 94 bps to close Thursday at 50.69 with the yield 6.76%.

The index was up 17 bps on Wednesday and 10 bps on Tuesday after falling 7 bps on Monday.

The ICE BofAML US High Yield index shot up 144 bps with year-to-date returns now 12.368%.

The index gained 68.6 bps on Thursday and 17.1 bps on Tuesday after shaving off 4 bps on Monday.

The CDX High Yield 30 index shot up 7 bps to close Thursday at 105.50.

The index was up 113 bps on Wednesday, 35 bps on Tuesday and 1 bp on Monday.

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