Category: High Yield Weekly

Fund Flows & Issuance: According to Wells Fargo, flows week to date were $1.4 billion and year to date flows stand at $3.0 billion. New issuance for the week was $3.9 billion and year to date HY is at $21.6 billion.

(New York Times) Trump Fires Acting Attorney General

• President Trump fired his acting attorney general on Monday night, removing her as the nation’s top law enforcement officer after she defiantly refused to defend his executive order closing the nation’s borders to refugees and people from predominantly Muslim countries
• The president replaced Ms. Yates with Dana J. Boente, the United States attorney for the Eastern District of Virginia, saying that he would serve as attorney general until Congress acts to confirm Senator Jeff Sessions of Alabama
• Ms. Yates’s order was a remarkable rebuke by a government official to a sitting president. Ms. Yates’s decision had effectively overruled a finding by the Justice Department’s Office of Legal Counsel, which had already approved the executive order “with respect to form and legality.”

(Company Release) Huntsman’s Pori, Finland Facility Experiences Fire

• A fire started at Huntsman Corporation’s titanium dioxide manufacturing facility in Pori, Finland. All Huntsman associates at the site have been accounted for and there were no injuries. The fire brigade responded quickly and extinguished the fire.
• Pori has a capacity of 130,000 metric tons, which represents approximately 15% of Huntsman’s total titanium dioxide capacity and approximately 10% of total European demand. The site is insured for property damage as well as earnings losses.

(The Hollywood Reporter) Charter Preparing to Claim Fox News Breached Carriage Deal

• The legal fight over Charter Communications’ television carriage contracts is expanding and will soon involve deals made by other cable and satellite companies. Charter has told a New York judge about its intention to sue Fox News over the “most favored nations” provision of its distribution agreement.
• Fox News has asserted breach of contract and fraud in the way Charter told regulators and shareholders of being the acquiring company only to hold up TWC’s contracts as surviving. Charter looks to dismiss Fox News’ fraud claim and is arguing that it is customary for a bigger operator, with more customers, to pay lower rates

(TMoNews) T-Mobile named No. 1 in Customer Service Satisfaction by Nielsen

• T-Mobile’s customer service has been named the best in the wireless industry.
• Nielsen Mobile Insights gave T-Mobile the top spot in Customer Service Satisfaction at the end of 2016, with Verizon, AT&T, and then Sprint following. T-Mobile beat out its competition in the Likelihood to Recommend, Net Promoter Score, and Overall Customer Satisfaction categories, too.
• T-Mobile has been named No. 1 in customer satisfaction by Nielsen Mobile Insights before, and John Legere and Co. are pretty pleased to win it again. Here’s the CEO’s statement on the news:
  “We have the best damn care team in the business – at this point, that’s not even up for debate. But like everyone else at this company, our care team takes ‘we won’t stop’ pretty literally. They’ve got their sights on being the #1 care team in any industry, anywhere – not just wireless. That was so 2016.”

(Bloomberg) Weatherford Surges on Plans to Sell Assets And Be More ‘Boring’

• Weatherford rose the most in more than two months after announcing plans to pair up with the world’s biggest onshore driller and sell assets for as much as $2 billion
• Weatherford’s interim Chief Executive Officer Krishna Shivram is working on multiple fronts to revitalize the troubled oilfield service company as the oil industry begins to dig out from the worst downturn in a generation. He plans to sell Weatherford’s U.S. onshore fracking business and its land-rigs unit to cut debt and streamline its service offerings, shed more workers and boost sales through an alliance with Nabors Industries Ltd
• “You will see a new, revitalized Weatherford with disciplined growth and improved returns, with no surprises and better predictability,” Shivram told analysts and investors Thursday on a conference call

(Business Wire) HCA Reports Fourth Quarter 2016 Results

• Revenues in the fourth quarter totaled $10.641 billion, compared to $10.249 billion in the fourth quarter of 2015
• Adjusted EBITDA for the fourth quarter of 2016 increased 3.6 percent to $2.206 billion compared to $2.131 billion in the prior year period
• Fourth quarter same facility revenue growth of 3.4 percent was driven by an increase of 1.5 percent in same facility equivalent admissions and an increase of 1.9 percent in same facility revenue per equivalent admission in the fourth quarter of 2016

Fund Flows & Issuance: According to Wells Fargo, flows week to date were $0.7 billion and year to date flows stand at $1.5 billion. New issuance for the week was $9 billion and year to date HY is at $17.6 billion.

(Globe Newswire) Pinnacle Foods Inc. Launches Proposed Refinancing

• On the heels of a strong finish to 2016, Pinnacle Foods intends to launch a refinancing of its outstanding indebtedness under its senior secured credit facilities
• The proposed refinancing is expected to result in interest expense comparable to or slightly below 2016, despite the impact of the rising interest rate environment on the Company’s floating rate debt. It is also expected to improve the Company’s debt maturity profile

(Washington Post) Trump signs executive order on the Affordable Care Act

• President Trump signed an executive order giving federal agencies broad powers to unwind regulations created under the Affordable Care Act
• The executive order, signed in the Oval Office as one of the new president’s first actions, directs agencies to grant relief to all constituencies affected by the sprawling 2010 health-care law: consumers, insurers, hospitals, doctors, pharmaceutical companies, states and others

(Press Release) Northern California County Selects Zayo for School District Connectivity

• The Office of Education for a northern California county has selected Zayo Group Holdings, Inc. for a dark fiber network that will connect 28 school districts. The 183-mile network includes 173 miles of network in place or already under construction and 10 miles of new build, which will be leveraged for follow-on tenants
• “Dark fiber is a highly scalable, cost-effective solution that provides the county with dedicated, high-capacity infrastructure,” said Dave Jones, executive vice president of Dark Fiber Solutions at Zayo. “They appreciate the flexibility of a solution they can manage themselves to meet the dynamic, long-terms needs of the county.”

(PR Newswire) Royal Caribbean Reports Over 25% Increase In Earnings And Anticipates Fifth Consecutive Year Of Double Digit Earnings Growth In 2017

• The company’s booked position for 2017 is better than last year’s record high, and at higher rates. Strength from North American consumers is driving exceptionally positive trends for North American and European products
• “Our global portfolio of products is demonstrating strength across virtually all key markets, positioning us to deliver strong yield growth in 2017,” said Jason T. Liberty, chief financial officer. “Strong topline growth combined with continued focus on cost management will generate another year of record setting results. Even with significant pressure from FX and fuel, we will deliver another stellar year.”

(Bloomberg) United Rentals to Acquire Competitor NES in $965 Million Deal

• United Rentals Inc. agreed to buy NES Rentals Holdings II for $965 million to bolster its equipment-leasing operations in regions such as the U.S. East Coast and Midwest
• Buying NES, which generated sales last year of $369 million, “will augment our revenue, earnings, Ebitda, free cash flow and overall scale,”Michael Kneeland, chief executive officer of United Rentals, said in the statement

(Bloomberg) Spectrum Brands Reports 1Q Results

• 1Q net sales $1.21b, est. $1.22b (range $1.21b-$1.25b)
• 1Q gross margin 37.1%, est. 36.6%
• Sees FY17 free cash flow $575m to $590m, est. $567.6m

(Bloomberg) Verizon Exploring Possible Combination With Charter

• A combination of Verizon and Charter would follow several recent industry mega-mergers, including Charter’s acquisition of Time Warner Cable and Bright House Networks, which made the Stamford, Connecticut-based company, partly owned by billionaire John Malone, the second-largest cable operator in the U.S. behind Comcast. Verizon, while facing a slowdown in its core wireless business, is the No. 1 mobile carrier and No. 2 telecommunications provider

(Bloomberg) Dialysis Provider Donation Disclosure Rule Blocked

• A federal rule requiring kidney dialysis providers such as U.S. Renal Care Inc. and DaVita Inc. to disclose their donations to charities that provide premium assistance for dialysis patients can’t be enforced by the HHS
• Judge Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas entered a preliminary injunction against the rule Jan. 25, finding the Department of Health and Human Services didn’t follow the proper rulemaking procedure when implementing the rule. The court further said the rule, if implemented, would harm dialysis patients by leaving them with no insurance coverage for their treatment
• Dialysis providers generally receive more reimbursement for dialysis treatments covered by private insurance, including plans on Affordable Care Act exchanges, than by Medicare or Medicaid plans. Providers said the HHS rule was flawed because it had the effect of allowing private insurers to refuse to cover patients once they learned that the patients received premium assistance from those charitable donations

Fund Flows & Issuance: According to Wells Fargo, flows week to date were -$0.3 billion and year to date flows stand at $0.8 billion. New issuance for the week was $7.2 billion and year to date HY is at $8.6 billion.

(Food Business News) B&G Foods ready to make another Green Giant-size acquisition

• B&G doubled its corporate infrastructure with the Green Giant deal and “set ourselves to really continue an acquisition path in a big way,” said Bob Cantwell, chief executive officer and president
• “We still believe that the right answer for B&G is to get bigger managing smaller things. That really differentiates ourselves against everybody else, but certainly, be ready to buy more things like Green Giant of that size, $500-plus million, because we’re certainly capable of doing that.”
• “If there’s an acquisition out there that really fits B&G, we’re going to be ready. We’re ready for it today. We’d prefer a little time just to absorb everything we have, but we’re not going to lose out on an acquisition that’s an absolute fit for B&G today.”

(Washington Post) Trump vows ‘insurance for everybody’ in Obamacare replacement plan

• President-elect Donald Trump said in a weekend interview that he is nearing completion of a plan to replace President Obama’s signature health-care law with the goal of “insurance for everybody,” while also vowing to force drug companies to negotiate directly with the government on prices in Medicare and Medicaid
• In addition to his replacement plan for the ACA, also known as Obamacare, Trump said he will target pharmaceutical companies over drug prices. “They’re politically protected, but not anymore”
• “We’re going to have insurance for everybody,” Trump said. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.” People covered under the law “can expect to have great health care
• Trump said his plan for replacing most aspects of Obama’s health-care law is all but finished. Although he was coy about its details — “lower numbers, much lower deductibles” — he said he is ready to unveil it alongside Ryan and Senate Majority Leader Mitch McConnell (R-Ky.)
• “It’s very much formulated down to the final strokes. We haven’t put it in quite yet but we’re going to be doing it soon,” Trump said. He noted that he is waiting for his nominee for secretary of health and human services, Rep. Tom Price (R-Ga.), to be confirmed

(Broadcasting & Cable) Spectrum Auction: TV’s New Exit Price Plummets to $10B

• That is a huge drop from the previous round and sounds like a number wireless operators might be able to love, or at least meet, so long as the average price in the top markets also meets the second prong for closing the auction successfully. It is a far cry from the $86 billion broadcaster asking price when the auction began, though that was for much more spectrum
• That $10 billion is how much the government will have to pay—actually it will be wireless companies if/when the auction finally closes for good—to move broadcasters off 84 MHz of spectrum so it can offer it to forward auction bidders for wireless broadband. That is down from the $43 billion broadcasters wanted for 108 MHz in stage 3 of the auction

(Bloomberg) IEA Sees Significant Gains in U.S. Shale Oil as Prices Rise

• Oil-price gains will trigger a “significant” increase in U.S. shale output as OPEC and other producers rein in supply, according to the head of the International Energy Agency
• “U.S. shale-oil production will definitely react strongly,” said Executive Director Fatih Birol. “At $50, $55, we’ve already seen a lot of activity,” Birol said. “U.S. oil production will continue to increase in significant terms.”
• The oil industry is becoming more cost-efficient and a “big chunk” of global output is now profitable at $50 to $55 a barrel, citing Brazil, Mexico and China as countries that will also boost production. There’ll be “lots more” supply in late 2017 or early 2018, he said
• Oil prices have risen about 20 percent since the Organization of Petroleum Exporting Countries reached a deal to curtail supply last year. The Nov. 30 agreement prompted a surge in activity in the U.S. — not an OPEC member — where oil and gas producers increased drilling the most since April 2014

(Business Wire) Mediacom Communications Makes Iowa First Gigabit State in the Nation

• Nearly 1 million households in the more than 300 Iowa communities passed by Mediacom’s fiber-rich digital network will be able to enjoy download speeds that are up to 40 times faster than the minimum broadband definition set by the Federal Communications Commission
• “In addition to enhancing speeds for residential and small business customers today, the Gigasphere platform we have deployed also lays the groundwork for offering multi-Gig services in the future,” said Mediacom’s Chief Technology Officer, JR Walden. “This next generation technology is an excellent complement to the Gigabit+ Fiber Solutions^TM that Mediacom Business has been offering local businesses in our markets for many years.”