Investment Banking and Capital Markets Update: Week Ended 11/28/2014

Transcription

1 Investment Banking and Capital Markets Update: Week Ended 11/28/2014 CRT Investment Banking Justin Vorwerk Head of Investment Banking John Calcagnini Managing Director David Dickson Managing Director Keith Sipes Managing Director Chris Wallace Senior VP, Equity Capital Markets

2 High Yield Capital Markets The high yield primary market was relatively due to the Thanksgiving Holiday. A total of 5 deals priced for 5 issuers for a global total of $2.5bn ($2.3bn/C$150mm). The secondary market held a positive tone Monday and Tuesday before market participants retired to take part in holiday activities. No data was released on weekly high yield fund flows. Leverage loan funds flows showed outflows for the beginning of the week although no official weekly report was published by Lipper. The C.S. High Yield Index 14 bounced back 10 bps to 6.40%. TIBCO Software, a Palo Alto-based provider of infrastructure and business software, priced $950mm of % sr. nts. due 21 (Caa2 / CCC) at to yield %. The coupon came at the wide end of talk but with OID, the % yield was in line with guidance. Proceeds, along with a $2.1bn credit facility and $1.6bn equity investment, finance the LBO of the company by Vista Equity Partners. MGM Resorts, the Las Vegas-based owner and operator of resorts and casinos, priced a $100mm tap of its 6.000% sr. nts. due 23 (B3 / B+) at to yield 5.886%. No official price talk was given for the deal. Proceeds will be used for general corporate purposes including the repayment of debt and funding a portion of development costs associated with the company s resort projects in Maryland and Massachusetts. HY FUND FLOWS ($MM) Source: Bloomberg HY INDICES - YIELDS (YTW) USD High Yield % Euro High Yield % 3-year Average for High Yield % 3-year Average for USD/EUR BBB % HY INDICES - SPREADS (STW) 4,000 Weekly flow, $MM 4-Wk Avg 1,000 USD High Yield bps Euro High Yield bps 3-average for High Yield bps 2, (2,000) (4,000) (6,000) (8,000) Nov-13 Dec-13 Jan-14 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Source: Lipper, FMI, ADI Source: Bloomberg 2

3 3 High Yield New Issuances HY NEW ISSUES Pricing Principal Date Issuer Industry Amt ($mm) Coupon Description Maturity Call Mdy's S&P UOP Price Yield Spread Vs. Talk 11/25/2014 DHX Media Media C$ Sr. Nts NC 3.0 yr NR BB- Refi/GCP Tight End 11/25/2014 Springleaf Finance Consumer Finance Sr. Nts NC 3.0 yr B2 B- Refi Tight End 11/24/2014 TIBCO Software Software Sr. Nts NC 3.0 yr Caa2 CCC LBO In Line 11/24/2014 CDW Technology Solutions Sr. Nts NC-Life B3 B+ Refi Wide End 11/24/2014 MGM Resorts Resorts and Casinos Add-on Sr. Nts NC-Life B3 B+ GCP NA HY FORWARD CALENDAR Wk of 11/24 Entrans International Transportation Equipment Sr. Sec. Nts NC 3.0 yr B2 B Refi Wk of 11/24 Parq Holdings Resorts and Gaming Sr. 2nd Lien Nts NC 3.0 yr NA NA Capex

4 Leveraged Loans LEVERAGED LOAN NEW ISSUES Date Amount Spread Issuance Priced Issuer Industry ($mm) Facility (bps) LIBOR Floor Maturity Ratings Price Yield UOP 11/26/2014 Equinox Fitness Gyms Add-on TL % 2020 B1/B % Dividend 11/26/2014 Terra-Gen Alternative Energy TLB % 2021 Ba3/BB % Dividend 11/25/2014 ION Media Television TL % 2020 B1/B % Refinancing 11/25/2014 Packers Sanitation Services Sanitation TL % 2021 B2/B % LBO Source: LCD, ADI, Bloomberg LOAN FUND FLOWS ($MM) 1,500 Weekly Flow, $MM 4-Wk Avg 1, (500) (1,000) (1,500) (2,000) Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Source: Lipper, FMI 4

5 Equity Capital Markets U.S. stocks rose for the week, capping a second straight monthly increase, as global central banks added stimulus and plunging oil prices triggered gains in consumer companies that overshadowed a slump in energy shares. The S&P 500 edged up 0.2% to 2, despite a 9.5% drop in energy. Consumer sentiment climbed to a seven-year high in November as Americans views of their financial well-being improved, according to the Bloomberg Consumer Comfort Index (COMFCOMF). Medgenics (NASD:MDGN), a biopharmaceutical company, priced its follow-on offering at $4.10, raising $21.0mm and trading up 0.7%. Proceeds fund general corporate purposes (dilution 21.3%). Revolution Lighting Technologies (NASD:RVLT), a manufacturer of fiber optic lighting products, priced its follow-on offering at $1.25, raising $10.0mm and trading down 2.4%. Proceeds fund general corporate purposes (dilution 8.8%, TEV/revenue 3.7x). NXP Semiconductors (NASD:NXPI), a global semiconductor company, priced $1.2bn of 1.000% conv. sr. nts. due 19 at a 35.0% premium. Proceeds fund general corporate purposes (TEV/EBITDA 15.3x). 125% 120% 115% 110% 105% 100% 95% 90% 85% 80% EQUITIES DJIA S&P 500 Nasdaq GLOBAL SNAPSHOT Source: Bloomberg COMMODITIES -1 Week -2 Weeks 12/31/13-1 Year 11/28/14 Value Chg. % Chg. Value Chg. % Chg. Value Chg. % Chg. Value Chg. % Chg. DJIA 17,828 17, % 17, % 16,577 1, % 16,086 1, % S&P 500 2,068 2, % 2, % 1, % 1, % VIX % % (0.39) -2.8% (0.37) -2.7% Oil (10.26) -13.4% (9.67) -12.8% (32.27) -32.8% (26.15) -28.3% 10-Year Treasury bps 0 bps bps #REF! bps 0 bps bps 0 bps 10-Year Bund bps bps bps bps USD High Yield (%) bps bps bps bps EUR High Yield (%) bps bps bps bps 30% 20% 10% 0% -10% -20% -30% -40% Oil Gold Silver Natural Gas Source: Bloomberg Source: Bloomberg 5

6 FOLLOW- FWD IPOS CVTS ONS 6 Equity New Issuances Pricing Amount Offer Discount/ Shares Market % of % Ch. Offer/ Date Issuer Industry ($MM) Price Premium (%) Offered (MM) Cap ($MM) Dilution Current 25th Nov 2014 Medgenics Inc Healthcare-Biomed/Genetics % % 0.7% 24th Nov 2014 Revolution Lighting Technologies Inc Consumer Products-Miscellaneous % % -2.4% Pricing Amount Maturity Coupon Premium Market Date Issuer Industry ($MM) Date % % Cap ($MM) 24th Nov 2014 NXP Semiconductors NV Computers & Electronics-Semiconductor 1, % 35.0% 11,277.1 Pricing Amount Filing Shares Exp. Market Date Issuer Industry ($MM) Range Offered (MM) Cap ($MM) 2nd Dec 2014 Histogenics Corp Healthcare-Medical/Analytical Systems Week of 8 Dec 2014 Polar Star Realty Trust Inc Real Estate/Property-REIT Source: Dealogic

7 M&A Activity SELECT GLOBAL M&A ANNOUNCEMENTS Date Target Company Acquirer Company Seller Company Industry Size ($MM) TEV/EBITDA 11/28/2014 Glentel Inc. (TSX:GLN) BCE Inc. (TSX:BCE) TCG International Inc.; Fidelity Management & Computer and Electronics Retail x Research Company; BC Ltd. 11/24/2014 Encompass Home Health, Inc. HEALTHSOUTH Corp. (NYSE:HLS) Cressey & Company, LP; Thoma Bravo, LLC Healthcare Services /24/2014 Gardew ine Group Inc. Mullen Group Ltd. (TSX:MTL) TriWest Capital Partners Trucking /24/2014 Tall City Exploration LLC, 14,000 Net Acres of Leasehold located in Reagan County, Texas American Energy - Permian Basin, LLC Tall City Exploration, LLC Oil and Gas Exploration and Production Source: S&P CapitalIQ 7

8 Disclaimer This material was prepared exclusively for the benefit and internal use of the CRT Capital Group LLC ( CRT ) client to whom it is directly addressed and delivered ( Company ) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This material is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by CRT. Neither this material nor any of its contents may be disclosed or used for any other purpose without the prior written consent of CRT. The information in this material is based upon publicly available information and reflects prevailing conditions and our views as of the date of this material, all of which are subject to change. CRT s opinions and estimates constitute CRT s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this material, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. CRT makes no representations as to the actual value which may be received in connection with a transaction or the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this material does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. CRT does not provide any tax advice herein. This material is not intended or written, and cannot be used, for the purpose of avoiding U.S. federal, state or local tax penalties. This material was written to support the promotion or marketing of the matters addressed herein. Each taxpayer should seek advice based on the taxpayer s particular circumstances from an independent tax advisor. This material does not constitute a commitment by CRT to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services to the Company. CRT is a broker-dealer registered with the United States Securities and Exchange Commission and a member of FINRA and SIPC. Securities offered by CRT: Are not FDIC insured- Are not bank guaranteed- May lose value- Are not a bank deposit- Are not a condition to any banking service or activity- Are not insured by any federal government agency. CRT and / or its directors, officers, employees, and affiliates may have or may have had interests or long or short positions in, and may at any time make purchases and/or sales as principal or agent, or may have acted or may act in the future as market maker in the relevant securities or related financial instruments discussed in this material. This material is a product of CRT s Capital Markets Group and not the Firm s Research Department. The views expressed in this material may differ from those of CRT's Research Department. Any opinions expressed in this material are subject to change without notice and CRT is under no obligation to update or keep this information current. CRT s Trading Desk may trade as principal in the securities of the issuers that are the subject of this material (or in related derivatives). CRT s Trading Desk has or may have proprietary positions in the securities of the issuers that are the subject of this material (or in related derivatives). If you have any questions, please contact Dan Sullivan at dsullivan@crtllc.com or STRICTLY PRIVATE AND CONFIDENTIAL 8