Junk: Delek prices add-on; Transocean softens; Endo, EquipmentShare.com gain

By Paul A. Harris and Cristal Cody

Tupelo, Miss., April 12 – In the Friday junk primary market session Delek Logistics Partners LP and subsidiary Delek Logistics Finance Corp. priced a $200 million add-on to their 8 5/8% senior notes due March 15, 2029 (B3/BB-) at 101.25 to yield 8.306%, in a drive-by, with the issue price coming at the rich end of talk.

Heading into the weekend the active calendar was empty; however, the week ahead promises to be an active one, sources say.

Pressed for names, a portfolio manager mentioned that Swiss multinational mid- and downstream oil company Puma Energy is expected to show up with a benchmark dollar-denominated offering of five-year non-call-two senior notes (Ba3).

Ostensibly an emerging markets play – the company is based in Singapore – some high-yield accounts will probably have a look at it, the investor said.

Transocean Inc. paper led secondary action on Friday on more than $230 million of volume between its two new tranches of priority guaranteed notes (Caa1/B-) sold the previous day.

The 8¼% notes due 2029 and 8½% notes due 2031 both were down ¼ point by late afternoon.

Secondary action was all about new high-yield issues with Endo Finance Holdings, Inc.’s new 8½% senior secured notes due 2031 (B2/B-) also heavily traded Friday.

The bonds were down ¾ point going into the close.

EquipmentShare.com, Inc.’s 8 5/8% senior secured second-lien notes due 2032 (Ba2/B) had $59 million of notes change hands over the session and were trading 7/8 point better than where they priced Thursday.

Otherwise, market action slowed on the day’s weaker tone.

“Not much going on,” a trader said. “High-yield bonds are softer, but not down much.”

The S&P 500 index closed 1.46% lower, with the iShares iBoxx High Yield Corporate Bond ETF down 4 cents, or 0.05%, to $76.37.

Treasury yields came down from steep increases Wednesday. The benchmark 10-year Treasury note yield closed Friday down 7 basis points to 4.49%.

Transocean lower

Transocean’s 8¼% senior notes due 2029 and 8½% senior notes due 2031 both traded down ¼ point from issuance at 99¾ with yields of 8.3% and 8.5%, respectively, Friday, a source said.

Volume ramped up by late afternoon with more than $130 million of the 8¼% notes and over $110 million of the 2031 tranche traded.

Transocean sold an upsized $1.8 billion of the notes on Thursday in $900 million tranches at par.

The deal was upsized from $1.5 billion with demand reported at $5.6 billion.

Endo stronger than issuance

Endo Finance’s new 8½% senior secured notes due 2031 drifted ¾ point lower going into the close Friday but remained 1 point better than issuance at 101 on $42 million of secondary action, a source said.

The yield was 8¼%.

Endo priced a downsized $1 billion of the notes on Thursday at par. The offering was decreased from an expected $1.25 billion deal, while the yield printed at the tight end of the 8½% to 8¾% yield talk.

The extra $250 million moved off the notes to the concurrent term loan B.

EquipmentShare.com up

EquipmentShare.com’s 8 5/8% senior secured second-lien notes due 2032 had $59 million of notes change hands over the session, a source said Friday.

The bonds were quoted better at 100.875 with a yield of 8.4%.

The company sold $600 million of the notes on Thursday at par, a day earlier than when the deal was expected to hit the primary market.

EquipmentShare.com upsized the offering from $500 million, and the yield printed at the tight end of yield talk in the 8¾% area.

Indexes

The KDP High Yield Daily index closed Friday at 49.64 with a yield of 7.2%.

The index dropped 6 bps on Thursday to 49.71 with a yield of 7.18%.

The KDP index declined 40 bps on Wednesday, added 9 bps on Tuesday and fell 2 bps on Monday.

The CDX High Yield 30 index dropped 28 bps Friday to 105.95.

The index closed Thursday 13 bps lower at 106.23.

The index sank 58 bps on Wednesday, was unchanged on Tuesday and increased 23 bps on Monday.

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