Univision drives by; Arconic starts roadshow; AMC surges; Rayonier lower

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 24 – Univision Communications Inc. priced Monday’s sole high-yield deal, a $500 million issue of 8% five-year senior secured notes (B1/B+) that came at par to yield 7.999% in a drive-by.

The yield came right next to the middle of yield talk in the 8% area. Initial guidance was in the low-8% area.

The heavily oversubscribed deal, which played to $2.25 billion of demand, was going out par ¼ bid, par ¾ offered in active trading late Monday, according to a sellside source.

Elsewhere the Arconic Corp. buyout deal, which began being telegraphed to the market late last spring, set out on the high-yield road on Monday, albeit in a somewhat truncated version.

Later this week issuer Arsenal AIC Parent LLC plans to place a $900 million tranche of seven-year senior secured notes (Ba3/B+/BB+) backing the buyout.

The deal is in the market with initial talk in the 8¾% to 9% area.

With $2.1 billion of reverse inquiry in the secured notes at or inside of 9%, books built to $3 billion during the Monday session, the sellside source said.

Missing from the deal telegraphed weeks ago is a $725 million tranche of senior unsecured notes that are being taken down by sponsor Apollo Global Management. Price indications on the unsecured piece has it coming 300 basis points to 350 bps behind the secured notes.

The Arconic deal takes a position on a thin active forward calendar that also includes the Brand Industrial Services, Inc. $1.335 billion offering of seven-year senior secured notes (B3/B-), in the market with 10¾% to 11% initial guidance and expected to price Tuesday.

Brand Industrial bonds are playing to $2.25 billion, according to a sellside source who added that orders for the concurrent $1.335 billion term loan were heard to be $1.25 billion on Monday, a dynamic that could see a shift of proceeds to the bonds from the loan, the source said.

Meanwhile, it was a quiet and flat day in the secondary space with few making moves as markets await an onslaught of earnings reports and the Federal Open Market Committee’s rate decision on Wednesday.

Some accounts were circulating offers-wanted-in-competition lists; however, activity was light, a source said.

With activity surrounding recent issues winding down, topical news was the driver of activity in the space.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were in the spotlight on Monday, rocketing higher after the company filed a revised stock conversion plan that will enable more equity capital raises.

Rayonier A.M. Products Inc.’s 7 5/8% senior secured notes due 2026 (B2/B) were dragged lower into the close on Monday after a more than 3 point gain the previous session following a new credit agreement.

AMC surges

AMC was the name of the day on Monday with its senior notes rocketing higher after the company filed a revised stock conversion plan following Friday’s surprise court ruling.

AMC’s 10% senior secured second-lien notes due 2026 were the most active in the debt stack and were the largest gainers of Monday’s session.

The 10% notes jumped almost 7 points to close the day at 68¾, a source said.

The yield shrank to 26%.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) gained 5½ points to close the day at 68½ with the yield now 16 3/8%, a source said.

The yield was 16 3/8%.

There was $6 million in reported volume.

AMC’s stock also surged as much as 42% in intraday activity on Monday before closing the day up 33.11%.

The surge in AMC’s capital structure came after the company and investors involved in a class-action lawsuit submitted a revised stock conversion proposal after Friday’s surprise ruling, which turned down the previously proposed settlement.

The plaintiffs have asked the judge to approve the settlement.

AMC has been involved in a lawsuit regarding the conversion of its preferred equity units, which trade with the ticker “APE,” whose conversion shareholders claimed would have a dilutive effect on stock.

Conversion of the APEs is needed if AMC is to be able to do another equity capital raise, a source said.

Rayonier lower

Rayonier’s 7 5/8% senior secured notes due 2026 were dragged lower into the close on Monday after a big bump on Friday.

The 7 5/8% notes traded on a 90-handle for the majority of Monday’s session, a source said.

However, the final trades of the day dragged the notes down 1 point to an 89-handle.

The 7 5/8% notes closed the day at 89½ with the yield 12¾%.

The two trades that occurred on an 89-handle were dealers buying from accounts, a source said.

There was $14 million in reported volume.

The 7 5/8% notes jumped 3 points on Friday after the company announced a new $250 million term loan with Oaktree.

Indexes

The KDP High Yield Daily index shed 2 points to close Monday at 50.73 with the yield now 7.3%.

The ICE BofAML US High Yield index gained 13.7 basis points with the year-to-date return now 6.733%.

The CDX High Yield 30 index added 3 bps to close Monday at 103.17.

Fund flows

High-yield ETFs saw $266 million of daily cash inflows on Friday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds sustained $66 million of outflows on the day.

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