Forward calendar grows; Solenis, Cvent, MoneyGram on deck; O-I Glass at a premium

By Abigail W. Adams

Portland, Me., May 15 – While no deals priced during Monday’s session, the domestic high-yield primary market saw a substantial buildup in its forward calendar with $2.525 billion entering the market – all coming as leveraged-buyouts deals.

Olympus Water US Holding Corp. (Solenis) started a roadshow for a $2.125 billion equivalent two-tranche offering of long five-year senior secured notes to back the acquisition of Diversey Holdings Ltd.

Capstone Borrower Inc. started a roadshow on Monday for a $500 million offering of seven-year senior secured notes (B2/B-/BB) to finance Blackstone’s acquisition of Cvent Holding Corp.

Mobius Merger Sub, Inc. started a roadshow on Monday for a $400 million offering of seven-year senior secured notes (B2/B/B+) backing the buyout of MoneyGram International Inc.

The primary market is expected to remain active throughout the week with XPO Inc. and Wyndham Hotels & Resorts Inc. also telegraphing their intention to tap the market as part of refinancing transactions.

The uptick of issuance is welcome news for a high yield market that continues to contract with calls, tenders, maturities and upgrades continuing to outstrip new supply.

The high-yield market has seen a net contraction of about $45 million year-to-date, according to a market source.

Meanwhile, it was a quiet day in the secondary space with the cash bond market either side of unchanged in light volume.

O-I Glass Inc. subsidiary Owens-Brockway Glass Container Inc.’s 7¼% senior notes due 2031 (B2/B+) improved on Monday after a strong break in heavy volume.

At Home Group, Inc.’s senior notes were mixed after the home goods store announced a privately negotiated exchange with holders of its 7 1/8% senior notes due 2029 (Caa3/CCC-).

While the 7 1/8% notes continued to climb following the exchange, the home goods store’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+) plunged.

LBOs on the road

While no deals priced on Monday, there was a substantial buildup in the forward calendar with three LBO deals starting roadshows.

Solenis started a roadshow for a $2.125 billion equivalent two-tranche offering of long five-year senior secured notes to back the acquisition of Diversey Holdings Ltd.

The offering includes a dollar tranche sized at $1.625 billion and a euro-denominated tranche equivalent to $500 million.

Early guidance for both tranches is for a yield in the high 8% area.

The roadshow will run throughout the week with an investor call scheduled for Wednesday.

Capstone Borrower started a roadshow for a $500 million offering of seven-year senior secured notes (B2/B-/BB) to finance Blackstone’s acquisition of Cvent with early guidance for a yield in the low 8% area, according to a market source.

Pricing is expected later in the week.

Mobius Merger Sub, Inc. started a roadshow for a $400 million offering of seven-year senior secured notes (B2/B/B+) backing Madison Dearborn Partners’ buyout of MoneyGram with early guidance for a yield of 10½% to 11%.

The roadshow will run through Thursday with pricing expected during the May 22 week.

While nothing definitive had yet circulated the market, XPO announced its intention to sell $830 million of secured and $450 million of unsecured notes and Wyndham Hotels & Resorts announced its plans to offer $400 million of senior secured notes as part of term loan refinancing transactions.

O-I Glass improves

O-I Glass’ 7¼% senior notes due 2031 improved in heavy volume on Monday after a strong break.

The 7¼% senior notes added another ¼ point with the notes trading in the par ¾ to 101 context throughout the session.

There was $24 million in reported volume.

In a heavily oversubscribed offering, O-I Glass subsidiary Owens-Brockway Glass priced an upsized $690 million, from $500 million, tranche of the 7¼% notes at par on Friday.

The yield printed at the tight end of price talk in the 7 3/8% area.

The tranche was heard to have played to $2 billion in demand.

The deal priced as a two-tranche, dual-currency offering with O-I Glass subsidiary OI European Group BV (OIEG) pricing a €600 million tranche of five-year notes (Ba3/BB-) at par to yield 6¼%.

At Home’s exchange

At Home’s senior notes were mixed after the company announced a privately negotiated exchange with holders of its 7 1/8% senior notes due 2029.

While the unsecured notes continued to soar, At Home’s 4 7/8% senior secured notes due 2028 plunged.

The 7 1/8% notes jumped 9 points to close Monday at 94 5/8, according to a market source.

There was $6 million in reported volume.

While volume was light, the 4 7/8% senior secured notes due 2028 plunged 7 points to close the day at 62 with the yield about 15 7/8%.

At Home announced on Monday that it had completed a series of refinancing transactions which included the private placement of $200 million of new 11½% senior secured notes due 2028 and a privately negotiated exchange with holders of its 7 1/8% notes.

In the privately negotiated exchange, approximately $447 million in principal of the 7 1/8% notes were exchanged for $412 million of new 7 1/8% cash/8 5/8% PIK senior secured notes due 2028, Prospect News reported.

Indexes

The KDP High Yield Daily index was flat on Monday and closed the day unchanged at 50.61 with the yield 7.31%.

The index added 18 points on the week last week.

The ICE BofAML US High Yield index shed 4.8 basis points with the year-to-date return now 4.209%.

The CDX High Yield 30 index inched up 2 bps to close Monday at 100.15.

The index gained 17 bps on the week last week.

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