Junk: Navacord prices add-on; Clarios on deck; CSC Holdings weaker; loanDepot catapults

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 19 – A broker partner of Navacord Inc. used the Wednesday junk bond primary session for an add-on offering.

Meanwhile, it was a soft day in the secondary space with the cash bond market off ¼ point as investors digested a U.K. inflation print of 10.1%, the release of the Federal Reserve’s beige book and a slew of earnings reports.

While the market was soft on Wednesday, it remained eerily quiet with liquidity thin, a source said.

Trading activity was concentrated in Altice USA, Inc. subsidiary CSC Holdings, LLC’s new 11¼% senior guaranteed notes due 2028 (B1/B), which were weaker on Wednesday after a strong break.

Topical news sparked activity in DaVita Inc.’s 4 5/8% senior notes due 2030 (Ba3/B+) which were slightly weaker following the buyout news of an industry peer.

LD Holdings Group LLC, the parent company of loanDepot, again had its senior notes catapult higher after the company announced amendments to its credit agreements.

Primary

Jones DesLauriers Insurance Management Inc., a broker partner of Navacord Inc., priced a $100 million add-on to its 8½% senior secured notes due March 15, 2030 (B2/B-/B+) at 101 to yield 8.242% in a Wednesday drive-by announced relatively late in the session, sources said.

The sole dollar-denominated deal to price on Wednesday, it came at the rich end of the 100.5 to 101 price talk, with the yield coming at the tight end of the 8.242% to 8.369% yield talk.

It was heard to be 2.4-times oversubscribed, a trader said.

Meanwhile Clarios Global LP and co-issuer Clarios US Finance Co., Inc. began marketing a $500 million offering of senior secured notes due 2028 (B1/B+/B+), and set to price Thursday.

The deal, which is in the market with initial guidance in the low-to-mid 7% area, is heard to have come on the back of a massive $1.6 billion of reverse inquiry, a trader said, adding that the deal chatter had the book size at $2.5 billion, late Wednesday.

Clarios takes a place on an active forward calendar that includes European lottery operator Allwyn's €1.3 billion equivalent three-part offering of Allwyn Entertainment Financing (UK) plc senior secured notes (BB/BB-): euro-denominated seven-year fixed-rate notes, initial talk in the mid-to-high 7% area; euro-denominated six-year floating-rate notes, in the market with initial spread talk in the Euribor plus mid-400 basis points area, and discount talk of 1 point to 1.5 points; and, dollar-denominated six-year fixed-rate notes, initial talk in the low-to-mid 8% area.

Tranche sizes remain to be determined, however indications are that the floating-rate tranche is expected to come sized at around €250 million, with the remainder to be distributed between the dollar and euro fixed-rate tranches, a market source said.

Official talk is expected on Thursday, and the deal could price later in the day, a market source said, adding that the dollar-denominated tranche is heard to be playing to $1.6 billion of demand.

Elsewhere, Italy-based Kedrion Biopharma is in the market with a $790 million offering of Kevlar SpA 6½% senior secured notes due Sept. 1, 2029 (B3/B).

Initial talk has the notes coming at OID 84 to yield approximately 10%.

The deal is set to price later ahead of Friday's close.

Meantime in the euro-denominated market, Grunenthal GmbH priced a €300 million issue of seven-year senior secured notes (B1/BB-/BB+) at par to yield 6¾% on Wednesday.

CSC Holdings weaker

CSC Holdings’ new 11¼% senior guaranteed notes due 2028 dominated activity in the secondary space on Wednesday with the notes weaker in heavy volume.

The 11¼% notes were off 3/8 to ½ point, a source said.

They were changing hands in the par to par ½ context heading into the market close.

There was $150 million in reported volume.

The notes were coming in after a strong break that saw them close the previous session at par ½ bid, 101 offered.

CSC Holdings priced $1 billion of the 11¼% notes at par to yield 11.245% in a Tuesday drive-by.

The yield printed at the tight end of the 11¼% to 11½% yield talk.

Demand was heard to have been $4.5 billion.

DaVita active

DaVita’s 4 5/8% senior notes due 2030 were slightly weaker in active trade following the buyout news of an industry peer.

The 4 5/8% notes were off about ¼ point to trade in the 85 3/8 to 85 5/8 context on Wednesday with the yield about 7¼%, a source said.

There was $16 million in reported volume.

The dialysis service provider’s senior notes had renewed interest following news of competitor Diaverum’s acquisition by the Abu Dhabi sovereign-wealth fund Mubadala Investment Co.

The deal was reported to carry an enterprise value of $2 billion.

loanDepot jumps

loanDepot’s senior notes catapulted higher on Wednesday after the company announced amendment to its credit and security agreements.

The mortgage loan service provider’s 6 1/8% senior notes due 2028 (Caa1/CCC+) jumped 7 points to close the day at 57¼ with the yield now 20 1/8%, a source said.

There was $8 million in reported volume.

While not active on Wednesday, loanDepot’s 6½% senior notes due 2025 were the major gainers of Tuesday’s session with the notes jumping from a 63-handle to 70¼, a source said.

The struggling mortgage lender’s senior notes catapulted higher after the company announced amendments to its credit and security agreements with Flagstar Bank and NexBank.

The amendments released Flagstar’s and NexBank’s security interest in the excess yield of certain loans, enabling loanDepot to effectuate the sale and securitization of the excess yield, according to an 8-K filing with the Securities and Exchange Commission.

“The market thinks it’s a good thing,” a source said.

Indexes

The KDP High Yield Daily index fell 14 points to close Wednesday at 51.78 with the yield 7.13%.

The index gained 3 points on Tuesday after falling 10 points on Monday.

The ICE BofAML US High Yield index was down 22.9 basis points with the year-to-date return now 4.21%.

The index rose 14.6 bps on Tuesday after falling 19.8 bps on Monday.

The CDX High Yield 30 index was down 21 bps to close Wednesday at 101.15.

The index fell 14 bps on Tuesday and inched up 3 bps on Monday.

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