US high-yield prints US$5.9bn in varied week

By Natalie Harrison and Robert Smith

NEW YORK (Frankfurt: HX6.F - news) /LONDON, June 20 (IFR) - The deal pace slowed in the US high-yield market this week with just US$5.885bn hitting the decks by late Friday, mostly in small trades except for the refi transactions for SBA Communications (NasdaqGS: SBAC - news) and packing firm Ardagh.

The flow included riskier PIK toggle structures for Wave Holdco and All Aboard Florida - the latter a rare project finance deal that high-yield investors were willing to back for the high 12% yield.

Investors have been told to expect more large refinancings next week, while one leveraged finance banker said some more PIK structures could also be on the way.

"Issuance conditions at the moment are optimal, because investors are flush with cash, reflected by the consistent flows into high-yield funds, and the risk-adjusted returns on the high-yield product are currently better than for other asset classes," said Stephan Jaeger, co-head of leveraged finance markets at Bank of America Merrill Lynch.

"If you combine that with low default rates, you could expect spreads to grind tighter, helped by continued demand for the product."

Jaeger said supply has been comprised of good quality companies for the most part, while trades with aggressive structures have not been hugely oversubscribed or have priced substantially wider than whispers.

"That shows investors are still disciplined," he said.

Two deals priced Friday by mid-afternoon - a US$300m senior unsecured deal for US airline Allegiant Travel (Frankfurt: AGH.F - news) and a US$1.55bn deal for Ardagh that came alongside a EUR1.55bn tranche.

Allegiant, which offers low-cost flights and plans to add 12 new routes this quarter, priced the five-year bullet at par to yield 5.5% - tight to 5.625% area price talk set by sole lead Goldman Sachs (NYSE: GS-PB - news) .

Evertec Group was also due to print a US$400m issue via JP Morgan (Other OTC: MGHL - news) and BofAML later in the day. Price talk was set at 5%-5.25%.

ARDAGH UPSIZES

Ardagh followed up its massively oversubscribed PIK refinancing a fortnight ago with an even larger refinancing of its more vanilla secured and unsecured debt on Friday.

The US$1.05bn-equivalent PIK notes priced at 99 on June 5, but demand was such that they soared to 102 in the secondary market the day after issuance, despite a whopping 50% equity claw at that level.

Demand for the new trade was just as fierce, with books already oversubscribed even before the investor call, according to a banker on the deal.

The company said Thursday it was looking to raise a US$430m 5NC2 senior secured FRN, a EUR1.155bn 7.5NC3 senior secured bond, and a US$440m 7NC3 senior unsecured bond.

Price talk was set Friday at 4.375% area on the euro tranche, 6%-6.25% on the US dollar unsecured tranche and Libor plus 300bp at 99.75-100 on the US dollar FRN.

Demand was such, however, that the FRN was upsized massively to US$1.1bn in order to refinance large chunks of its outstanding Term Loan B. All tranches priced at par, with the FRN at 300bp, the dollar unsecured at 6% and the secured at 4.25%.

Aside from the term loan, Ardagh is using the new issue to repay its EUR310m 7.125% senior secured 2017s, its US$860m 7.375% senior secured 2017s and its EUR1.085bn 7.375% senior secured 2017s. The company is also using EUR348m from the proceeds of its Anchor asset sale to fund the redemptions - a sale required by the Federal Trade Commission to approve its acquisition of Verallia North America.

The pipeline for next week is fairly slim so far. It includes an unrated deal for Sunshine Oilsands (Other OTC: SUNYF - news) , a US$325m project finance deal that has been in the works for some time. Imperial is left-lead.

The other deals all have five-year maturities: a US$550m issue for Altegrity Inc, led by Goldman Sachs, Credit Suisse (NYSE: CS - news) and Macquarie; a US$150m issue for Saexploration Holdings (NasdaqGM: SAEX - news) via Jefferies; and a US$200m deal for AV Homes (NasdaqGS: AVHI - news) that JP Morgan (Other OTC: JPYYL - news) is leading alongside Citi, RBC (MCX: RBCM.ME - news) , Credit Suisse and Deutsche Bank (Xetra: DBK.DE - news) .

PRICED:

ARDAGH PACKAGING FINANCE

PRICED:

-US$1.110bn Senior Secured Floating-Rate Notes. Rated Ba3/B+. Cpn 3mL+300bp. Due 12/15/19. Ip par. First (Other OTC: FSTC - news) pay 9/15/14. Call schedule: 6/30/16 at USD102.00, 6/30/17 at USD101.00, 6/30/18 and thereafter at par. USD101 CoC: put. MWC+50bp. Settlement date 7/3/14. Cusip: #03969AAF7.

-EUR1.155bn Senior Secured Notes. Rated Ba3/B+. Cpn 4.25%. Due 1/15/22. Ip par. Yld 4.25%. +337bp vs 2.00% 1/4/22. First pay 1/15/15. Call schedule: 6/30/17 at USD102.125, 6/30/18 at USD101.063, 6/30/19 and thereafter at par. Equity clawback 35% at par plus coupon until 6/30/17. USD 101 CoC: put. MWC B+50. Settlement date 7/3/14. ISIN: #XS108204361.

-US$440m Senior Notes. Rated Caa1/CCC+. Cpn 6.00% Due 6/30/21. Ip par. Yld 6.00%. +378bp vs 2.00% 5/31/21. First pay 12/30/14. Call schedule: 6/30/17 at USD103.000, 6/30/18 at USD101.500, 6/30/19 and thereafter at par. Equity clawback 35% at par plus coupon until 6/30/17. USD CoC: put. MWC+50bp. Settlement date 7/3/14. Cusip: #03969AAG5.

ALLEGIANT TRAVEL

Allegiant Travel Company (NasdaqGS: ALGT - news) , ratings B1 (Moody's), announced a US$300m SEC registered 5-year NCL senior notes via sole-bookrunner GS (KSE: 078935.KS - news) . Make-whole call T+50bp.

PRICE TALK: 5.625% area.

PRICED: US$300m 5.5% 5-year (7/15/19) NCL (MWC +50bp) at par. Spread T+383bp vs 5/31/19. CoC put at 101%. 1st Pay: 1/15/15. Settle: 6/25/14. Cusip: 01748XAA00.

DUE TO PRICE FRIDAY:

EVERTEC INC (NYSE: EVTC - news)

Evertec Inc announced a US$400m 8yr senior secured note offering via JPM(left)/BAML. Expected ratings B1/BB-. 144a/RegS for life. UOP: to refinance in full its existing term B senior secured credit facility and to pay all fees and expenses related thereto. BIZ: the leading full-service transaction processing business in Latin America, providing a broad range of merchant acquiring, payment processing and business solutions services.

PRICE TALK: 5.00-5.25%. Books close at 12:00pm EDT today, pricing thereafter.

(Reporting by Natalie Harrison and Robert Smith; Additional reporting by Shankar Ramakrishnan; Editing by Marc Carnegie)