U.S. Acute Care, Harvest Midstream price; Iliad on deck; Citrix levels

By Abigail W. Adams

Portland, Me., April 29 – The domestic high-yield primary market was active on Monday with two deals pricing.

In drive-by action, Harvest Midstream I, LP priced $500 million of eight-year senior notes (B1/BB-).

In a deal that came on an accelerated timeline, U.S. Acute Care Solutions LLC priced $800 million of five-year senior secured notes (B3/B-).

However, the stampede to the market belonged to Europe on Monday with a sterling-denominated offering, a dual-currency offering and four euro-denominated offerings joining the forward calendar.

As market players awaited the deals in the pipeline to break for trade, the secondary space was quiet and flat with little movement in either direction expected in the lead up to the Federal Open Market Committee’s Wednesday announcement.

Market expectations for rate cuts have drastically altered over the past two weeks with the latest round of macro data reviving the stagflation debate, sources said.

While the market entered the year with six rate cuts priced in, those expectations were quickly reduced to 3 with the question now being whether there will be any rate cuts at all.

The secondary space saw some selling pressure over the past two weeks which wiped out the market’s year-to-date returns.

However, buyers have quickly entered the market amid any weakness with the yields being offered still at historic highs.

The market has a strong “coupon cushion,” a source said, which is expected to protect it from any drastic sell-off.

With little to move the market on Monday, activity was relegated to carry-over trades and large liquid issues.

Cloud Software Group Holdings Inc.’s (Citrix) 9% second-lien notes due 2029 (Caa2/B-) and Citrix Systems Inc./Tibco Software Inc.’s 6½% senior secured first-lien notes due 2029 (B2/B) leveled off in active trade after a large move to the upside the previous week.

Monday’s primary

It was an active day for the domestic high-yield primary market on Monday with two dollar-denominated issues pricing.

However, the real stampede occurred in the European market with six deals joining the calendar.

Harvest Midstream priced $500 million of eight-year senior notes (B1/BB-/BB-) at par to yield 7½% in a Monday drive-by.

Pricing came at the tight end of talk for a yield of 7½% to 7 5/8%. Early guidance was for a yield in the 7¾% area.

U.S. Acute Care Solutions priced $800 million five-year senior secured notes (B3/B-) at 98.071 with a coupon of 9¾% to yield 10¼%, according to a market source.

Pricing came on top of talk for a discounted offer price of 2 points and at the wide end of talk for a yield of 10% to 10¼%.

Early guidance was for a coupon in the high 9% area and a discounted offer price to yield 10¼%.

Iliad Holding SAS plans to price a two-tranche offering of dollar-denominated and euro-denominated seven-year senior secured notes (expected B2/B+/BB-), according to a market source.

The dollar-denominated tranche is expected to be $750 million with early guidance for a yield of 8½% to 8¾%.

The euro-denominated tranche is expected to be €500 million.

Citrix levels

Cloud Software’s (Citrix) 9% second-lien notes due 2029 and Citrix/Tibco’s 6½% senior secured first-lien notes due 2029 were active on a quiet day for the secondary space on Monday with the notes leveling off after a move to the upside the previous week.

Cloud Software’s 9% second-lien notes due 2029 continued to trade on a 97-handle.

They were trading at 97 1/8 with a yield of 9 5/8% in the late afternoon, according to a market source.

There was $15 million in reported volume.

The notes jumped 3 points the previous week.

The Citrix/Tibco’s 6½% senior secured first-lien notes due 2029 were also largely unchanged.

The 6½% notes were trading at 95¼ in the late afternoon with the yield 7 5/8%.

There was $10 million in reported volume.

The notes added ½ point the previous week after positive numbers.

Indexes

The KDP High Yield Daily index gained 14 basis points to close Monday at 49.76 with the yield 7.14%.

The CDX High Yield 30 index inched up 8 bps to close Monday at 106.36.

The index posted a weekly gain of 93 bps.

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