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MGM Resorts $1.15B 8.25-year bullet notes (B+/B3/BB) price to yield 6%

mgm-resorts-internationalMGM Resorts International this afternoon completed a $1.15 billion drive-by offering of 8.25-year senior bullet notes via joint bookrunners Bank of America, J.P. Morgan, Citi, SMBC, and Morgan Stanley. Terms were finalized at the wide end of talk, following a $150 million upsize at launch. The benchmark issuer is using proceeds for general corporate purposes, including the repayment of debt maturing in 2015 and the funding of a portion of the development costs related to MGM’s Maryland and Massachusetts resort projects, according to a company statement. The transaction is public, with SEC registration, filings show. Terms:

Issuer MGM Resorts Int’al
Ratings B+/B3/BB
Amount $1.15 billion
Issue senior (SEC Reg.)
Coupon 6%
Price 100
Yield 6%
Spread T+381
Maturity March 15, 2023
Call nc-life
Trade Nov. 20, 2014
Settle Nov. 25, 2014 (T+3)
Bookrunners BAML/JPM/Citi/SMBC/MS
Co-Managers Barc/BNP/DB/CAG/RBS/Scotia/UBS
Price talk 5.75-6%
Notes Upsized by $150 million.
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HD Supply 7-year high yield bonds (B+/B1) price to yield 5.25%

hd-supply_200x200HD Supply this afternoon completed its offering of seven-year (non-call three) secured notes via a Bank of America-led bookrunner squad, with joint books Barclays, J.P. Morgan, Goldman Sachs, and Wells Fargo. Terms were finalized at the tight end of talk following roughly three-times over-subscription, sources said. The return to market comes after a hiatus of nearly two years, and proceeds will be used to refinance pari passu 8.125% notes due 2019. The paper is not callable until next year, at par plus 75% coupon, but it already trades around a T+50 make-whole valuation, at 108.25, yielding about 2.5%, trade data show. Take note that the offering is under Rule 144A for life, and that the pitch is for a larger-than-typical equity clawback option for three years, at up to 40% of the issue, at par plus coupon, according to sources. Terms:

Issuer HD Supply
Ratings B+/B1
Amount $1.25 billion
Issue secured (144A)
Coupon 5.25%
Price 100
Yield 5.25%
Spread T+323
Maturity Dec. 15, 2021
Call nc-3
Trade Nov. 19, 2014
Settle Dec. 4, 2014 (T+10)
Bookrunners BAML/Barc/JPM/GS/WFS
Co-Managers Baird/BB&T/Citi/CS/DB/RayJay/STRH/UBS
Price talk 5.375% area
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Connacher Oil high yield bonds plumb trading lows after going-concern warning

Connacher Oil and Gas bonds today traded at fresh record lows for a second consecutive session after the company reported third-quarter results that included a going concern warning. The 8.5% second-lien notes due 2019 changed hands at an all-time low of 54.5 earlier today, for a net decline of 10 points since the report, according to sources and trade data.

For the third quarter, production increased 20% to a record of 14,163 barrels per day, but costs also increased due to higher natural gas pricing. Costs were up 29% year over year, to $26.4 million, according to a company filing.

The Nov. 13 report carried an ominous warning that stated the following: “The company’s current debt structure and limited access to additional financing … create material uncertainties that may cast significant doubt about the company’s ability to continue as a going concern.”

Management additionally warned about an ability to service debt given the current projected cash flows from operations, the filing shows. To this end, Feb. 1 coupons loom for the abovementioned secured notes as well as a C$350 million series of 8.75% second-lien notes due 2018, which have also sunk to the 50s, according to sources.

Management furthered stated that they will “continue to monitor” capital balances and commitments amid “changing economic and risk conditions,” the filing shows. Based on current projections, the company will need additional funds in 2015, according to the firm.

The two series of B/Caa3 second-lien notes date to May 2011 issuance via Credit Suisse and RBC as part of a refinancing exercise on previously outstanding 11.75% first-lien notes due 2014 and 10.25% second-lien notes due 2015. Pricing was par apiece, which was an eighth wide of guidance, with split ratings of BB-/Caa2 at offer.

Calgary-based Connacher is an oil company focused on harvesting bitumen with principal assets at the Great Divide oil sands property near Fort McMurray, Alberta, as well as Thornbury and Quigley lands. The company trades publicly in Toronto under the symbol CLL. Large current and pending investors include Audley Capital Advisors, Fidelity Management & Research Company, Pinetree Capital, and West Face Capital, according to S&P Capital IQ. – Matt Fuller

Follow Matthew on Twitter @mfuller2009 for leveraged debt deal-flow, fund-flow, trading news, and more.

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High Yield Bond Funds Net $890M Investor Cash Inflow; 4th Straight Gain

high yield fund flows

Retail-cash inflows to high-yield bond funds were $890 million in the week ended Nov. 12, according to Lipper. This is a fourth consecutive net inflow to the asset class, for an infusion of $6.6 billion over that span.

Moreover, the inflow is light on the exchanged-traded front in a third consecutive week, at just approximately 10% of the inflow, or $93 million this past week. The prior two weeks were just 6% of the inflows, but it was ETF-heavy three weeks ago, at roughly half of the $1.7 billion inflow in the week ended Oct. 22.

With a fourth large inflow, the trailing-four-week average builds to positive $1.7 billion per week, from positive $1.3 billion last week and negative $254 million just four weeks ago.

The full-year reading rises to $1.1 billion, with 11% tied to ETF inflows. Recall that the figure flipped back into positive territory last week for the first time since the record-shattering outflow of $7.1 billion in the week ended Aug. 6.

One year ago at this time flows were positive $1.57 billion, and 98% was ETF-related, or $1.54 billion of the total.

Despite the solid inflow this week, change due to market conditions was negative $40 million, but that’s essentially nil against total assets, which stood at $182.7 billion at the end of the observation period, with 20% tied to ETFs, or $36.9 billion. Recall that a surge in market value by $3.3 billion three weeks ago was the largest upside move in three years.

Total assets are up $6.9 billion in the year to date, reflecting a gain of roughly 4% in 2014. – Matt Fuller

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E*Trade 8-year high yield bonds (B+/Ba3) price to yield 5.375%

etrade.gifE*Trade Financial this afternoon completed its offering of SEC registered senior notes via J.P. Morgan, Morgan Stanley, Credit Suisse, and Goldman Sachs. Terms were finalized at midpoint of talk. Proceeds will be used to redeem the borrower’s 6.75% senior notes due 2016, and 6% senior notes due 2017. S&P today raised its corporate ratings on E*Trade Financial one notch, to B+, and on its operating subsidiary, E*Trade Bank, to BB. This is the result of today’s refinancing of holding company debt, which will improve its funding profile by reducing corporate debt by about $400 million, to $1.4 billion. S&P upgraded its senior unsecured debt to B+, from B. Moody’s also upgraded E*Trade Financial senior debt rating to Ba3, from B1, and its senior unsecured rating to Ba3, from B1. Terms:

Issuer E*Trade Financial
Ratings B+/Ba3
Amount $540 million
Issue senior (SEC Reg.)
Coupon 5.375%
Price 100
Yield 5.375%
Spread T+319
Maturity Nov. 15, 2022
Call nc-3 @par+75% coupon
Trade Nov. 12, 2014
Settle Nov. 17, 2014 (T+3)
Bookrunners JPM/MS/CS/GS
Price talk 5.25-5.5%
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Supervalu 8-year high yield bonds (B-/B3) price to yield 7.75%

supervalu logoSupervalu yesterday afternoon completed its SEC-registered offering of senior notes via bookrunners Goldman Sachs, Credit Suisse, Morgan Stanley, and Barclays, along with co-managers Bank of America and Wells Fargo, according to sources. Terms were finalized at the tight end of talk. Supervalu is using proceeds, along with borrowings under its amended and restated $1 billion asset-based revolving credit facility, to fund the redemption of the $350 million of 8% notes due 2016. Note the ratings are B-/B3, which reflects an upgrade from Caa1 at Moody’s.

Terms:

Issuer Supervalu
Ratings B-/B3
Amount $350 million
Issue senior (SEC Reg.)
Coupon 7.75%
Price 100
Yield 7.75%
Spread T+557
Maturity Nov. 15, 2022
Call nc-4 @par+50%
Trade Nov. 10, 2014
Settle Nov. 14, 2014 (T+3)
Bookrunners GS/CS/MS/Barc
Co-Managers BAML/WFS
Price talk 7.75-8%
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DISH Network $2B upsized bullet notes (BB-/Ba3) price to yield 5.875%

dish_network_logoDISH Network via its typical issuer entity DISH DBS Corp. this afternoon completed an offering of senior unsecured bullet notes via sole bookrunner Deutsche Bank, according to sources. Terms were finalized at the middle of talk after a $750 million upsizing, to $2 billion. With ratings of BB-/Ba3 and proceeds aimed to support general corporate purposes, the satellite-broadcast-network operator is the latest opportunist to take advantage of strong demand for BB and crossover paper this fall. More specifically, proceeds will help replenish cash used for repayment of a $900 million of 6.625% notes that matured last month, as well as prefunding a $650 million of 7.75% notes due in May. Terms:

Issuer DISH DBS Corp.
Ratings BB-/Ba3
Amount $2 billion
Issue senior notes (144A)
Coupon 5.875%
Price 100
Yield 5.875%
Spread T+352
Maturity Nov. 15, 2024
Call nc-life
Trade Nov. 5, 2014
Settle Nov. 20, 2014 (t+10)
Sole Bookrunner DB
Price talk 5.875% area
Notes upsized by $750 million.
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General Motors prices $2.5B bond offering at tight end of talk

General Motors Company today completed its three-part offering of SEC-registered senior bullet notes via J.P. Morgan (B&D), Goldman Sachs, and Morgan Stanley, according to the firm. Terms on the 10-, 20-, and 30-year tranches were finalized at the tight end of talk. Proceeds will be used to redeem the automaker’s series A cumulative perpetual preferred shares on or after Dec. 31, 2014. Excess capital will back general corporate purposes, filings show. Terms:

Issuer General Motors Company
Ratings BBB-/Ba1/BB+
Amount $500 million
Issue senior notes (SEC Reg.)
Coupon 4%
Price 99.273
Yield 4.087%
Spread T+175
Maturity April 1, 2025
Call nc-life
Trade Nov. 4, 2014
Settle Nov. 12, 2014 (t+5)
Bookrunners JPM/GS/MS
Co-Managers n/a
Price talk T+180 bps area
Notes carries T+25 make-whole call provision.
Issuer General Motors Company
Ratings BBB-/Ba1/BB+
Amount $750 million
Issue senior notes (SEC Reg.)
Coupon 5%
Price 98.795
Yield 5.099%
Spread T+205
Maturity April 2, 2035
Call nc-life
Trade Nov. 4, 2014
Settle Nov. 12, 2014 (t+5)
Bookrunners JPM/GS/MS
Co-Managers n/a
Price talk T+210 bps area
Notes carries T+30 make-whole provision.
Issuer General Motors Company
Ratings BBB-/Ba1/BB+
Amount $1.25 billion
Issue senior notes (SEC Reg.)
Coupon 5.2%
Price 99.266
Yield 5.25%
Spread T+220
Maturity April 1, 2045
Call nc-life
Trade Nov. 4, 2014
Settle Nov. 12, 2014 (t+5)
Bookrunners JPM/GS/MS
Co-Managers n/a
Price talk T+225 bps area
Notes carries T+35 make-whole provision.
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As appetite for risk reappears, leveraged loan returns lag other asset classes in October

returns by asset class

 

Leveraged loans managed a 0.26% gain in October, lagging the four other asset classes tracked by S&P Capital IQ/LCD, as investor appetite for riskier assets began to re-emerge during the month, after a brutal September. (You’ll notice that, while they lost ground, leveraged loans fared better than the other asset classes in the decidedly risk-off month of September.)

The leveraged loan returns are per the S&P/LSTA Index.

For the year to date, leveraged loans trail the pack again, returning 2.38%, as declining Treasury rates impacted the market segment. Equities lead the way, of course, helped along by a stellar October, when they saw a 2.44% return.

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Standard Pacific inks 10-year bullet notes (B+/B1) to yield 5.875%

standardpacific

 

Standard Pacific this afternoon completed its offering of 10-year bullet notes to support general corporate purposes, via J.P. Morgan, Citi, Bank of America, and Credit Suisse. Terms on the B+/B1 issue were finalized at the midpoint of talk. The homebuilder is back in market after 15 months. Note the investment-grade style par call six months prior to maturity, filings show.

Terms:

Issuer Standard Pacific
Ratings B+/B1
Amount $300 million
Issue senior notes (SEC Reg.)
Coupon 5.875%
Price 100
Yield 5.875%
Spread T+351
Maturity Nov. 15, 2024
Call nc-life
Trade Nov. 3, 2014
Settle Nov. 6, 2014 (T+3)
Bookrunners JPM/Citi/BAML/CS
Co-Managers BNPP/Comerica/USB
Price talk 5.75-6%
Notes Investment-grade call six months prior to maturity.