content

Allison Transmission Prices $1B High Yield Bond Offering

Allison Transmission logoAllison Transmission today priced its upsized offering of eight-year notes at the tight end of talk, sources said. The notes were placed privately through a Citi-led deal, which included nine additional bookrunners. The transaction was originally planned to wrap on Thursday, but pricing was accelerated to this afternoon. The issuer will use the proceeds, along with cash, to pay down its $2.39 billion TLB due 2019. Terms:

Issuer Allison Transmission
Ratings Ba3/BB (Moody’s/Fitch)
Amount $1 billion
Issue senior (144A-for-life)
Coupon 5%
Price 100
Yield 5%
Spread T+342 bps
Maturity Oct. 1, 2024
Call nc3 (at par plus 50% of coupon)
Trade Sept. 14, 2016
Settle Sept. 23, 2016 (T+7)
Joint bookrunners C/BARC/BAML/BMO/Fifth Third/JPM/SMBC/DB/GS/MUFG
Price talk 5–5.25%
Notes Upsized from $500 million; 40% equity claw

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Navient Prices $500M High Yield Bond Offering

navient logoNavient, in its second tap of the bond market this year, priced an offering of seven-year, SEC-registered notes this afternoon at the low end of talk, sources said. Bookrunners for the offering were Bank of America Merrill Lynch, J.P. Morgan, and RBC Capital Markets. Navient, the fallen-angel spin-off of Sallie Mae, will use the proceeds for general corporate purposes. Terms:

Issuer Navient
Ratings BB-/Ba3/BB
Amount $500 million
Issue senior (SEC-registered)
Coupon 7.25%
Price 100
Yield 7.25%
Maturity Sept. 25, 2023
Call non-call life
Trade Sept. 9, 2016
Settle Sept. 16, 2016 (T+3)
Joint bookrunners BAML/JPM/RBC
Price talk 7.25-7.375%

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

PDC Energy Prices $400M High Yield Bond Offering

PDC logoPDC Energy this afternoon priced its drive-by $400 million offering of eight-year notes below initial guidance, sources said. Bookrunners for the privately placed deal were J.P. Morgan, BMO, Bank of America Merrill Lynch, and Wells Fargo. The Denver-based oil and gas exploration and production company will use the proceeds, along with revolver borrowings, to help finance the planned $1.5 billion acquisition of assets from Kimmeridge Energy.

Issuer PDC Energy
Ratings B–/B2
Amount $400 million
Issue senior (144A)
Coupon 6.125%
Price 100
Yield 6.125%
Spread T+457
Maturity Sept. 15, 2024
Call nc3 (at par plus 75% coupon)
Trade Sept. 12, 2016
Settle Sept. 15, 2016
Joint bookrunners JPM/BMO/BAML/WFS
Price talk 6.25–6.5%
Notes

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

High Yield Issuance Rebounds to Busiest August Since 2012

US high yield bond issuance

It was the busiest August in several years as high-yield issuance grew to $19.5 billion last month from $15 billion in July, according to LCD. It also topped the average monthly volume figure for 2016 of $19.2 billion.

Indeed, last month marked the highest output for any August since 2012 when a whopping $30.3 billion hit the market across 51 tranches. The 36 tranches last month were the second most of any month this year.

Issuance in 2016 through August was $153.4 billion, down about 25% from the comparable period a year earlier. However, that gap was narrowed from a 37% shortfall at midyear. – Jon Hemingway

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Cablevision to Issue $1.9B of Bonds Today to Partially Refi Leveraged Loan

Cablevision/Optimum has launched a $1.91 billion offering of 10.5-year (non-call 5.5-year) senior guaranteed notes. J.P. Morgan, Barclays, BNP Paribas, Credit Agricole CIB, Deutsche Bank, RBC, Scotia, Societe Generale CIB, and Toronto Dominion are underwriters. An investor call will be held at 9:30 a.m. EDT, for pricing later today.

Proceeds will be used to partially refinance the borrower’s TLB. As reported, the company also this week launched a $1.9 billion, eight-year B term loan, and together these will refinance the company’s $3.8 billion B term loan due October 2022.

Price talk ahead of the lender call was outlined at L+325, with a 0.75% LIBOR floor and 99.75 OID. The term loan includes six months of 101 soft call protection. At talk, the term loan would yield roughly 4.19% to maturity. Note, the TLB due 2022 is priced at L+400 with a 1% LIBOR floor, and is covenant-lite. Commitments were due yesterday.

Banks are guiding bond accounts to expected ratings of BB-/Ba1. Ratings are B/B1 corporate and BB–/Ba1 on the facility, with a 1 recovery rating on the term loan.

The new notes will extend the company’s curve beyond the 5.25% unsecured notes due 2024, which closed last night at 96.75, yielding 5.8%, according to S&P Global Market Intelligence.

In September 2015, J.P. Morgan, BNP Paribas, and Barclays arranged the TLB due 2022 in connection with Altice’s $17.7 billion purchase of Cablevision. Alongside the TLB, the issuer also put in place a $2 billion, five-year revolver. Some $4.8 billion of bonds were also issued via issuing entity CSC Holdings, under escrow moniker Neptune Finco. — Luke Millar/Richard Kellerhals

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Investors Return to US High Yield Bond Mart with $610M Inflow

U.S. high-yield funds recorded an inflow of $610.3 million for the week ended Sept. 7, according to the weekly reporters to Lipper only. This reverses last week’s outflow and represents the fourth positive reading in five weeks.

hy fund flows

Despite the positive reading, the four-week trailing average actually dropped to positive $318.6 million, from $579.7 million last week, as a large inflow rolled off.

Both ETFs and mutual funds recorded inflows during the observation period, but ETFs were just 26% of the total, at $156.7 million.

The year-to-date total inflow is now $9.98 billion, with 32% ETF-related. A year ago at this juncture, the measure was an outflow of $3.1 billion, with 29% ETF-related.

The change due to market conditions this past week was positive $515.1 million, representing 0.3% of total assets. Total assets at the end of the observation period were $201.7 billion. ETFs account for about 21% of the total, at $42 billion. — Jon Hemingway

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

US High Yield Bond Issuance Hits $19.5B in August

US high yield bond issuance

High yield bond issuance in the U.S. rebounded to $19.5 billion in August – often a sleepy month for junk bonds – from $14.9 billion in July, according to LCD. Through August, U.S. high yield issuance in 2016 totals $153 billion, down noticeably from the $206 billion seen at the same point in 2015. – Staff reports

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Bankruptcy: Foresight Energy Completes Out-of-Court Restructuring

Foresight Energy on Aug. 30 completed its out-of-court restructuring of more than $1.4 billion in indebtedness, the company announced.

The coal-mining company reached a tentative deal to restructure its debt outside of bankruptcy court in April after it failed to make a $23.6 million coupon payment due Feb. 15. After several extensions, the company launched the restructuring transactions on Aug. 1.

By way of background, the company found itself in a precarious position after the Delaware Chancery Court in December ruled that a revised “partnership” deal implemented by principal equity holder Murray Energy demonstrated a “de facto” change in control, putting Foresight on the hook to repay a $600 million bond issue at 101%.

With long-term debt of $1.5 billion and a cash position of $16.2 million as of March 31, Foresight did not have sufficient liquidity to repay the debt in the event of acceleration.

The company said the restructuring was implemented principally through concurrent exchange and tender offers in which holders of 99.98% of the principal amount of the company’s 7.875% senior notes due 2021 participated. The company purchased roughly $105 million of outstanding notes for cash, and exchanged the remaining notes for about $349 million of new second-lien notes, roughly $299 million of new convertible PIK notes, and warrants to acquire up to 4.5% of the total outstanding units of the company upon the redemption of the convertible PIK notes (see “Foresight Energy launches exchange offer to support restructuring,” LCD News, Aug. 2, 2016, and “Foresight Energy’s facility to be amended after exchange offer,” LCD News, Aug. 2, 2016, for a detailed description of the exchange offer and related transactions).

The company further said the restructuring also provided for, among other things, the amendment and restatement of the company’s senior credit facility and receivables securitization facility, respectively. — Alan Zimmerman

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

US High Yield Bond Funds See $889M Cash Inflow

U.S. high-yield funds recorded an inflow of $888.9 million for the week ended Aug. 17, according to the weekly reporters to Lipper only. It’s the second consecutive week of inflows, but down from $1.65 billion last week.

high yield fund flows

ETF influence accounted for just 41% of the total, or $366 million, compared to 76% of last week’s ballooning inflow.

With another inflow, the four-week trailing average narrowed to negative $24 million, from negative $166 million last week.

The year-to-date total inflow is now $9.6 billion, with 32% ETF-related. A year ago at this juncture, the measure was an outflow of $1.45 billion, with 72% ETF-related.

The change due to market conditions this past week was positive $751.5 million, representing 0.4% of total assets. Total assets at the end of the observation period were $200.9 billion. ETFs account for about 21% of the total, at $41.9 billion. — Jon Hemingway

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

S&P: High Yield Default Rate to Hit 5.6% by June 2017

high yield default rate

The U.S. speculative-grade default rate is expected to reach 5.6% by next June, from 4.3% in June of this year, according to S&P Global Fixed Income Research.

In a worst-case scenario the default rate could rise to 7.1% by June 2016, S&P said, citing continued concerns regarding the energy/oil & gas segment – a large high yield issuer constituency – including low/volatile prices and more limited debt funding sources.

In an optimistic scenario the speculative grade default rate could rise to 4.3%. – Tim Cross

The full report, which also details the default rate ex energy, high yield issuance (overall and by rating), default rate by time horizon, and default rate vs interest burden, is available to S&P Global Credit Portal subscribers here. It was written by Diane Vazza and Nick Kraemer.

Follow LCD News on Twitter. LCD is an offering of S&P Global Market Intelligence