High-yield primary open; four issuers price $2.5 billion; calendar grows; Hawaiian Airlines jumps

By Abigail W. Adams

Portland, Me., Dec. 4 – The domestic high-yield primary market was wide open on Monday with four issuers pricing $2.5 billion and $2.4 billion in four deals joining the forward calendar.

The issuer base was diverse but the driving force behind the wave of deals in the market was refinancings.

Issuers were jumping on the cheaper rates available since the dramatic repricing of the market since mid-November, a source said.

And while terms have tightened, the deals have played to strong demand with two of the four deals to price on Monday upsizing and all coming at or near the tight end of talk.

In a deal that came on an accelerated timeline, HAT Holdings I LLC and HAT Holdings II LLC priced an upsized $550 million of green senior notes due June 2027 (Baa3/BB+/BB+).

Kinetik Holdings LP also priced $500 million of five-year sustainability-linked notes (Ba1/BB+/BB+), Univision Communications Inc. priced an upsized $700 million add-on to its 8% senior secured notes due Aug. 15, 2028 (B1/B+) and NextEra Energy Operating Partners, LP priced $750 million of five-year senior bullet notes (Ba1/BB/BB+).

The forward calendar also ballooned with offerings from Alliant Holdings Intermediate LLC and Alliant Holdings Co-Issuer Inc., CQP Holdco LP and BIP-V Chinook Holdco LLC, J.B. Poindexter & Co., Inc. and Enova International Inc. slated to price before the end of the week.

While the high-yield primary market was in full force, the secondary space had a soft tone as Treasuries gave back some of their strong gains from last Friday’s session.

The 10-year Treasury yield rose 9 basis points to close Monday at 4.291% and the 5-year Treasury yield gained 11 bps to close at 4.24%.

However, the cash bond market was largely unchanged.

While focus was on the deals in the pipeline, topical news sparked the largest price movements in the space.

Hawaiian Airlines, Inc.’s 5¾% senior notes due 2026 (B2) jumped double digits in heavy volume on Monday following news news of Alaska Airlines’ $1.9 billion acquisition of the company.

Primary open

The domestic high-yield primary market was wide open on Monday with four issuers pricing a cumulative $2.5 billion.

In a deal that came on an accelerated timeline, HAT Holdings I LLC/HAT Holdings II LLC (Hannon Armstrong) priced an upsized $550 million, from $500 million, of green senior notes due June 2027 at par with a coupon of 8% on Monday.

Pricing came at the tight end of talk for a yield of 8% to 8¼%. Early guidance was for a yield in the low-to-mid 8% area.

Timing was accelerated with the deal initially slated to remain in the market until Tuesday.

The deal was heard to have had $200 million in reverse inquiry.

Kinetik Holdings priced $500 million of five-year sustainability-linked notes at par to yield 6 5/8% in a Monday drive-by.

Pricing came toward the rich end of talk for a yield in the 6¾% area. Early guidance was for a yield in the high 6% area, according to market sources.

Univision Communications priced an upsized $700 million, from $500 million, add-on to its 8% senior secured notes due Aug. 15, 2028 at a reoffer price of 100.5 for a yield to put of 7.834% and yield to maturity of 7.865%, according to a market source.

Pricing came at the rich end of talk for a reoffer price in the 100.25 area.

NextEra priced $750 million of five-year senior bullet notes at par to yield 7¼% on Monday, according to market source.

Pricing came at the tight end of talk for a yield of 7¼% to 7½%.

Early guidance was for a yield in the high 7% area.

The calendar

The calendar also ballooned during Monday’s session with four issuers planning to price $2.4 billion before the week draws to a close.

CQP Holdco LP/BIP-V Chinook Holdco LLC plan to place a $700 million offering of 10-year, no-call five senior secured notes (existing B1/BB) during the Dec. 4 week with initial guidance for a yield in the mid-7% area.

Alliant plans to price a $750 million offering of seven-year senior secured notes with early guidance for a yield in the mid-7% area, according to market sources.

The notes are non-callable for three years.

J.B. Poindexter plans to price $550 million of eight-year, no-call three senior notes late in the week with initial guidance for a yield in the low 9% area.

Enova International plans to price $400 million of five-year, no-call two senior notes with early guidance for a yield in the mid-11% area and an original issue discount.

The deal is slated to price on Wednesday; however, timing may be accelerated to Tuesday’s session, a source said.

Hawaiian soars

Hawaiian Airlines’ 5¾% senior notes due 2026 (B2) were the high flyers of Monday’s session, rising double digits on news of the airlines acquisition by Alaska Air.

The notes soared 14 to 15 points on the news.

They traded as high as a 94-handle in intraday activity but settled into the 93 to 93¼ context heading into the market close, a source said.

There was $80 million in reported volume.

The notes were in focus on news that Alaska Airlines would acquire Hawaiian Airlines in a deal with an enterprise value of $1.9 billion.

Indexes

The KDP High Yield Daily index was flat on Monday to close the day at 49.55 with the yield 7.28%.

The index posted a cumulative gain of 50 bps on the week last week.

The ICE BofAML US High Yield index added 6.5 bps to with year-to-date returns now 9.862%.

The CDX High Yield 30 index shaved off 15 bps to close Monday at 104.02.

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