Chemours and HCA Issue over $1.5 Billion Each in Junk Bonds

Pricing trends

High yield bonds that were priced in the market in the week ended May 8 found strong appetite from investors. Most issuers were able to get deals at the lower end of the price talk, but a few issuers could find investors only at higher levels than the price talk. ETFs like the SPDR Barclays Capital High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond Fund (HYG) invest in junk bonds.

Chemours and HCA Issue over $1.5 Billion Each in Junk Bonds

Deal highlights of the week

The Chemours Company, a supplier of titanium technologies, is a subsidiary of E. I. du Pont de Nemours and Company, or DuPont (DD). It issued dollar-denominated bonds worth $2.1 billion last week. The B1/BB-rated two-tranche issue consisted of:

  • $1.35 billion in 6.625% senior notes due on May 15, 2023. The notes were issued at 100% of the aggregate principal amount at a yield to worst of 6.625%.
  • $750 million in 7.0% senior notes due on May 15, 2025. The notes were issued at 100% of the aggregate principal amount at a yield to worst of 7.0%.

The company will use the money that it raises following the spin-off from its parent.

Issuances by HCA and Range Resources

HCA, a subsidiary of healthcare services provider HCA Holdings (HCA), issued bonds with a rating of B2/B+ worth $1.6 billion last week. The senior add-on notes carried a coupon of 5.375%. The notes will mature on February 1, 2025. The notes were issued at 103% of the aggregate principal amount at a yield to worst of 4.98%. HCA will use the proceeds to refinance older debt.

Oil and natural gas producer Range Resources Corporation (RRC) issued bonds worth $750 million. The single-tranche Ba1/BB+ rated issue of senior notes carried a coupon of 4.875%. The notes will mature on May 15, 2025. The notes were issued at 100% of the aggregate principal amount, at a yield to worst of 4.875%. Range Resources will use the proceeds from the sale to refinance older debt.

Issuances by Boyd Gaming and SM Energy

Gaming company Boyd Gaming Corporation (BYD) raised bonds with a rating of B3/CCC+ worth $750 million. The single-tranche issue of senior notes carried a coupon of 6.875%. The notes will mature on May 15, 2023. The notes were issued at 100% of the aggregate principal amount, at a yield to worst of 6.875%. Boyd Gaming will use the proceeds of the sale to refinance older debt.

Independent energy firm SM Energy Company (SM) issued Ba2/BB-rated bonds worth $500 million. The single-tranche issue of senior notes carried a coupon of 5.625%. The notes will mature on June 1, 2025. The notes were issued at 100% of the aggregate principal amount, at a yield to worst of 5.625%. SM Energy will use the proceeds from the sale to refinance older debt.