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Big Tex/ATW Bonds Price to Yield 9.625%

big tex logoBig Tex/American Trailer Works (ATW) today placed its offering of seven-year (non-call three) notes backing the acquisition and merger of the two companies by Bain Capital. The deal was finalized at the low end of talk, sources said. The 144A-for-life notes were issued though issuer entity BDC Acquisition and shopped via Goldman Sachs and Barclays. In addition to financing the M&A transaction, the proceeds will also be used to refinance ATW’s existing debt. Terms:

Issuer BDC Acquisition (American Trailer Works)
  Ratings B/B3
Amount $670 million
Issue senior secured (144A-for-life)
Coupon 9.625%
Price 100
Yield 9.625%
Maturity Sept. 15, 2023
Call non-call three (1st call @ par+50 coupon)
Trade Aug. 17, 2016
Settle Aug. 24, 2016
Joint Bookrunners GS/BARC
Price talk 9.75% area
Notes 1st call @ par+50 coupon

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Sinclair Television Group Prices $400M Bond Offering to Yield 5.125%

sinclair television groupSinclair Television Group late yesterday priced its upsized bond offering in the middle of talk, sources said. Bookrunners include Wells Fargo as lead, along with J.P. Morgan, Deutsche Bank, RBC, SunTrust Robinson Humphrey, Bank of America Merrill Lynch, and MUFG. Sinclair tapped the market to raise funds to repay $350 million of its 6.375% senior unsecured notes due 2021. This is the latest refinancing effort from the broadcasting company. Earlier this year, it issued $250 million of 5.875% senior notes due 2026 to repay drawings under its RCF. The new notes were finalized with a first call premium of par plus 50% coupon, sources said. Terms:

Issuer Sinclair Television
Ratings B+/B1
Amount $400 million
Issue senior (144A)
Coupon 5.125%
Price 100
Yield 5.125%
Maturity Feb. 15, 2027
Call non-call five
Trade Aug. 15, 2016
Settle Aug. 30, 2016 (T+11)
Bookrunners WFS/JPM/DB/RBC/STRH/BAML/MUFG
Co-managers Citizens/Liontree/Moelis
Price talk 5.00-5.25% area
Notes First call at par +50% coupon; upsized from $350 million.

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Service King Prices $75M High Yield Bond Offering to Yield 8.029%

service kingService King late Thursday placed a $75 million add-on to its 7.875% notes due 2022, sources said. The deal was finalized at 99.25, plus accrued interest from April 1, via bookrunners J.P. Morgan, Bank of America Merrill Lynch, Credit Suisse, Deutsche Bank, Macquarie, and Blackstone. The amount outstanding on the notes prior to the recent tack-on was $300 million. The borrower will use the proceeds for general corporate purposes. Terms:

Issuer Service King
Ratings CCC/Caa1
Amount $75 million (add-on)
Issue senior (144A-for-life)
Coupon 7.875%
Price 99.25
Yield 8.029%
Spread T+671
Maturity Oct. 1, 2022
Trade Aug. 11, 2016
Settle Aug. 16, 2016 (T+3)
Bookrunners JPM/BAML/CS/DB/MACQ/BLACKSTONE
Price talk 99 area OID
Notes 40% equity claw at 107.875

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5-Hour Energy Scraps Financing Deal after Sale of company Falls Through

Arrangers for Innovation Ventures, the maker of 5-Hour Energy drinks, pulled the company’s two-pronged financing package this morning after the sale to Renew Group Private fell apart.

5 Hour Energy logoThe financing package included a $525 million senior secured loan and a $400 million senior note issue that had been circulating the market, according to sources. Proceeds would have backed Renew Group’s purchase and refinanced outstanding bonds.

Innovation Ventures is still evaluating plans that would allow it to refinance its debt, the company stated this morning in a press release.

Bank of America Merrill Lynch and KeyBanc Capital Markets were arranging the loan and had set price talk of L+450, with a 1% LIBOR floor and a 99 offer price on a $500 million term loan.

S&P Global Ratings rated the issuer B+ and the first-lien debt BB, with a 1 recovery rating. The proposed bonds drew B–, with a 6 recovery rating.

As reported, Farmington Hills, Mich.–based Innovation Ventures is 80% directly or indirectly owned by CEO Manoj Bhargava, who would have sold a roughly 80% stake through a trust. — Kelsey Butler

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MGM Properties Prices $500M High Yield Bond Offering Backing Refinancing

MGM Growth Properties yesterday completed its offering of 10-year (non-call life) notes after a $100 million upsize, for a total of $500 million, sources said. The deal was finalized lower than talk, and at par, for a yield of 4.5%, sources noted. Bookrunners included Bank of America Merrill Lynch (left), Barclays, J.P. Morgan, Citi, Deutsche Bank, BNP Paribas, Fifth Third, Morgan Stanley, and SMBC. Proceeds will be used to refinance amounts outstanding under the company’s revolver that were drawn in connection with the acquisition of the real property of Borgata Hotel Casino and Spa from MGM Resorts International and for general corporate purposes. Terms:

Issuer MGM Growth Properties
Ratings BB–/B2
Amount $500 million
Issue unsecured notes (144A)
Coupon 4.50%
Price 100%
Yield 4.50%
Spread T+296 bps
Maturity Sept. 1, 2026
Call non-callable for life
Trade Aug. 9, 2016
Settle Aug. 12, 2016
Joint bookrunners BAML/JPM/BARC/C/DB/BNP/FIFTH THIRD/MS/’SMBC
Price talk 4.625% area
Notes first call at par plus 50% coupon

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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.

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Veritas Rolls Out Cross-Border Secured Bonds Backing LBO

Veritas logoVeritas has revived the secured-bond component of the cross-border debt financing package backing The Carlyle Group’s acquisition of the company from Symantec, sources said. The software company is pitching $387 million of seven-year notes as well as €230 million of notes with the same maturity, both non-call three.

Bookrunners on the deal are Morgan Stanley, Bank of America Merrill Lynch, UBS, Jefferies, Barclays, Citi, Mizuho, with pricing expected as early as today, sources added. Ratings for the proposed notes are B+/B1.

Last November, Veritas postponed both the loan and bond components of the cross-border debt financing package, citing market conditions. Bank of America Merrill Lynch, Morgan Stanley, UBS, Jefferies, Barclays, Citigroup, Credit Suisse, and Goldman Sachs were listed as arrangers on the transaction, with BAML as left lead on the loans and Morgan Stanley as left lead on the bonds.

At the time, the U.S. dollar component of the loan transaction being sold to investors was reduced by $950 million, to $1.5 billion, from $2.45 billion. Of that $950 million, $250 million was expected to be tacked onto the secured bond deal, originally outlined as $500 million, while the arrangers would have held the $700 million balance, sources said at the time.

This June, the cross-border LBO loan portion of the deal was completed (See “Veritas underwriters complete sale of LBO loans at 85; terms” LCD News, June 15, 2016), at which time it was noted that $750 million of cross-border secured notes remained in the pipeline from the issuer. The $1.941 billion TLB-1 is currently marked at 93/94, and the TLB-2 is quoted at 89.5/91.5, sources said. — Staff reports

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Amid Debt Binge, US Leverage Levels Reach Record Highs

spec grade leverageU.S. corporate leverage levels have reached record highs, helped in large part by today’s excessive liquidity and low borrowing costs in the capital markets, S&P says.

Both the overall leverage level, and those for U.S. speculative-grade companies (above), saw the median debt to EBITDA ratio increase to the highest level seen over the past 10 years, according to a research report released by S&P today.

From the report:

Key debt and leverage levels among U.S. corporate entities excluding financial institutions are at record highs, suggesting that these borrowers—particularly those at the lower end of the credit spectrum—are as vulnerable to downgrades and defaults as they were in the period leading up to the Great Recession—and perhaps more so.

S&P Global Ratings sees a clear cause for concern as aggregate debt levels and leverage components that we use to help determine the financial profile of rated companies now exceeds that which we saw just prior to the most recent economic and financial crisis.

The full report is available to S&P Global Credit Portal subscribers here. It also details corporate FFO ratios, cash & debt, hi-grade corporate debt levels, newly rated issuers by rating, and more. The report is written by Jacob Crooks and David Tesher. – Tim Cross

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HCA Launches $1B Secured Bond Offering to Refinance Bank Debt

HCA has launched a $1 billion offering of 10.5-year (non-call life) secured notes. J.P. Morgan, Bank of America Merrill Lynch, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, RBC, SunTrust Robinson Humphrey, UBS, and Wells Fargo are bookrunners. Pricing will take place today, following an 11 a.m. EDT investor call.

Proceeds from the SEC-registered deal will be used to refinance a portion of the borrower’s outstanding TLB-4, and for general corporate purposes.

HCA logoHCA last week allocated an upsized $1.2 billion term loan (L+275, 0% LIBOR floor), with proceeds used to refinance a portion of its $2.3 billion B-4 term loan (L+275), which matures in May 2018.

The company’s last visit to the bond market was in March, when it issued 5.25% notes due 2026. These bonds closed on Friday at 107 yielding 4.3%, according to S&P Global Market Intelligence.

While the new notes are described as non-call life, they include an investment-grade-style par call window, in this case six months prior to maturity. The aforementioned 2026 notes carry the same feature.

Banks are guiding investors to expected ratings of BBB-/Ba1. That is the same as HCA’s outstandings, which also carry a BB+ rating at Fitch.

HCA trades on the New York Stock Exchange, with an approximate market capitalization of $29.9 billion. — Luke Millar

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Investors Withdraw Hefty $2.5B from US High Yield Bond Funds

U.S. high-yield funds recorded an outflow of $2.5 billion for the week ended Aug. 3, according to the weekly reporters to Lipper only. This was the second straight net outflow, following the $175 million redemption last week, after three weeks of inflows prior to that totaling $6.5 billion.

US high yield fund flows

Most notable, however, is that the outflow was $2.3 billion from the ETF segment, the largest on record, trailing the prior record of $2.2 billion in the week ended May 6, 2015.

The big outflow lowers the trailing four-week figure to positive $508 million per week, from positive $1.6 billion last week—the largest in 18 weeks at the time.

The year-to-date total inflow is now $7.1 billion, with 20% ETF-related. A year ago at this juncture, the measure was an outflow of $352 million, with 98% ETF-related.

The change due to market conditions this past week was negative $283 million, which is negligible against the $195.7 billion of total assets at the end of the observation period. The ETFs account for about 20% of the total, at $39.3 billion. — Matt Fuller

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

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Avon Products Prices $500M High Yield Bond Offering

avon logoAvon Products via issuer subsidiary Avon International Operations today completed an offering of secured notes via a Bank of America–steered syndicate, according to sources. Avon seeks capital to fund a tender offer addressing up to $650 million of its 5.75% unsecured notes due 2018; 4.2% unsecured notes due 2018; 6.5% unsecured notes due 2019; and 4.6% unsecured notes due 2020, according to S&P Global Ratings, which has a 1 recovery rating on the new secured debt, indicating expectation for very high recovery (90–100%) in the event of a default. Terms:

Issuer Avon International Products
Ratings BB–/Ba1
Amount $500 million
Issue secured notes (144A-life)
Coupon 7.875%
Price 100
Yield 7.875%
Spread T+669
Maturity Aug. 15, 2022
Call nc3 @ par+50% coupon
Trade Aug. 4, 2016
Settle Aug. 15, 2016 (T+7)
Bookrunners BAML/CITI/GS
Senior co-managers HSBC, STRH, SANT
Co-manager Williams
Price talk n/a
Notes first call par+50% coupon.

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