NEW YORK: Three high yield bond trades were on offer on Friday ahead of what is expected to be an unusually quiet week for issuance.
Food and beverage company Dean Foods Company priced a new US$700m eight year non call three senior notes via Morgan Stanley at par to yield 6.50%, or the tight end of 6.50%-6.75% guidance.
Books were heard to be multiple times covered earlier in the day. Pricing reference points were Smithfield Foods and JBS bonds.
American Tire Distributors priced a US$50m add on to its 10.25% 2022s senior sub notes via BAML.
Nielsen Finance is also planning to price a US$650m add-on to its 5.00% 2022 senior notes offering through JPMorgan. If not upsized, the bond will push the size of the 2022s to US$1.4bn.
The week ahead is expected to start slow with some market players attending a JPMorgan organized conference in Miami.
Still there is a good chance of a few big deals hitting the tape towards the latter end of the week. Among those expected to tap the market is Riverbed Technology to fund a US$3.6bn buyout by Thoma Bravo and Ontario Teachers’ Pension Plan.
The network is planning to print a US$625m eight-year non-call three bond which is part of a broader financing package that includes a US$1.525bn seven-year term loan and a US$100m revolver. The bond is being led by Credit Suisse.
Montreal based jet and train maker Bombardier is planning to raise debt and equity as part of a US$2.1bn financing to bolster its liquidity. The company has US$750m in debt maturing in early 2016.
Rite Aid has already begun work on the first phase of its jumbo acquisition financing and is expected to follow up with a US$1.8bn high-yield bond by mid to late March, sources said.
Rite Aid, which is acquiring full service benefit management company Envision Pharmaceutical for US$2bn, was out syndicating a bridge loan via Citi, Bank of America Merrill Lynch, Wells Fargo Securities.
Overall the mood is good in the high yield market.
High yield funds continue to see inflows, investor interest is solid, and performance in the secondary has been steady.
Meanwhile, the Federal Reserve Bank of New York reported a marked decline in primary dealers’ total holdings of corporate securities.
Holdings were down US$2.3bn to US$21.1bn, led by a US$3.6bn decline in high yield positions to US$1.2bn or a decline of 75% – versus the previous week.
“While the move is a sharp drop over the month, it is too early to read too much into it,” said one analyst.
One investor said accounts have seen significant inflows and have probably used those to buy bonds from dealers thus reducing inventories.
DEALS EXPECTED TO PRICE:
Nielsen Finance LLC and Nielsen Finance Co., existing ratings B1/BB+ announced a US$650m add-on to its 5.00% April 15, 2022 senior notes private offering that is exempt from registration. UOP: The proceeds from this offering will be used to make repurchases of outstanding common stock from time to time. Biz: global information and Measurement Company that provides clients with a comprehensive understanding of consumers and consumer behavior.
The original $750m 8-year nc3 was sold at T+249bp via JPM(left)/CITI/CS/DB/GS/HSBC/MS/RBC/WFS.
DEAN FOODS COMPANY
Dean Foods Company announced a US$700m 144A for life 8-year (2023) non-call 3-year senior notes via MS (lead left), BAML, JPM, CA, STRH. Co-mgrs: Rabo and PNC. UOP: approximately $521m of the net proceeds from this offering to finance redemption of all of our outstanding 2016 Notes.
Remaining net proceeds to repay a portion of the outstanding borrowings under our senior secured credit facility and our receivables backed facility.
WHISPERS: 6.50%-6.75% area
PRICE TALK: 6.50-6.75%.
PRICED: US$700m 6.50% cpn. Ip 100.00. Yld or YTM or YTW 6.50%. T+456bp vs UST 2.000% 2023. 1st pay: Call schedule at USD104.875 03/15/18, 103.250 03/15/19, 101.625 03/15/20, and thereafter at par. MWC T+50bp. Equity claw up to 40% at 106.50% til 03/15/18. USD COC 101%. Settlement date T+3 02/25/15. Cusip #242370AD.
AMERICAN TIRE DISTRIBUTORS
American Tire Distributors, Inc., existing ratings Caa1/CCC+ announced a USD50m add-on to its 10.25% March 1, 2022 senior subordinated notes 144a for life offering. Via sole bookrunner BAML. BIZ:The largest distributor of replacement tires in North America based on dollar amount of wholesale sales and number.
The original US$805m 7-year nc3 was sold at T+846bp via BAML (left)/GS/WFS/DB/JPM/STRH/UBS.
PRICED: USD50m. Cpn 10.25%. Due 3/1/22. Ip 103.00. Yld 9.484%. Non-callable until 3/1/18. MWC T+50bp. Settlement date (T+3) 2/25/15. Cusip #0214TAA6.