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First high-yield deals of 2021 falter in flat secondary market

Determined to lock in lower borrowing costs, two high-yield borrowers hit the ground running in 2021, placing a combined $2.65 billion of refinancing-driven bonds that met with a lukewarm reception.

EQM Midstream Partners LP split its upsized $1.9 billion senior unsecured notes offering into $800 million of 4.5% eight-year notes and $1.1 billion of 4.75% 10-year bonds, pricing both at the tight end of guidance. Both tranches clocked high trades of 101.125, the 2031 bonds having broken to that context, while the 2029 notes opened to initial trades at 100.875. Having weathered yesterday’s equity-related volatility, the new deals struggled to hold on to gains in this morning’s flat secondary, with the longer tenor changing hands at 100.75 late in the morning while the eight-year notes traded around 100.5/100.625.

Proceeds of the deal are earmarked to repay the company's outstanding term loan A due 2022, and to fund tender offers up to $500 million of its existing 4.75% senior unsecured notes due 2023 and 4% senior unsecured notes due 2024.

A 101 handle proved elusive for Icahn Enterprises LP's $750 million of eight-year unsecured notes, which also came with an upsize and at the tight end of talk. The notes broke to initial trades at 100.375 and topped out at 100.625 before settling in to trade at a weighted average of 100.5. Proceeds will be used to redeem a portion of the company's $1.2 billion of 6.25% notes due 2022, which were trading fractionally higher this morning at 100.375.