PRA, Spring Window on tap in HY; CNX, Diversey on 101-handles; Coinbase losses mount

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 16 – The domestic high-yield primary market was quiet on Thursday.

However, two deals remain on the forward calendar and are expected to price during Friday’s session.

PRA Group, Inc. is on deck with a $300 million offering of eight-year senior notes (Ba2//BB+) and Spring Window Fashions is in the market with a $625 million offering of eight-year senior notes (Caa2/CCC).

Meanwhile, the secondary space was also quiet with volume outside of new and recent issues light.

ASP Unifrax Holdings, Inc.’s two tranches of senior notes outperformed with the notes trading 2 to 3 points above their issue prices.

CNX Midstream Partners LP’s 4¾% senior notes due 2030 (existing ratings B1/B-) and Diversey Holdings Ltd.’s 4 5/8% senior notes due 2029 (Caa1/B) were also putting in strong performances with the notes on 101-handles.

However, Coinbase Global, Inc.’s two-tranches of senior guaranteed notes (Ba1/BB+) remained under pressure with both tranches down more than 1 point to close the day wrapped around 98.

Thursday’s primary

Observance of Yom Kippur appeared to dampen high-yield primary market activity on Thursday, sources said.

New issue news flow was sparse, indeed.

Two deals are teed up to price Friday.

PRA Group is on deck with a $300 million offering of eight-year senior notes (Ba2//BB+) which were talked Thursday to yield in the 5 1/8% area, in line with initial guidance in the low-5% area.

Also, Spring Window Fashions is in the market with a $625 million offering of SWF Escrow Issuer Corp. eight-year senior notes (Caa2/CCC), initial guidance 6% area, and also expected to price Friday.

Unifrax outperforms

Unifrax’s two-tranches of senior notes outperformed in the secondary space with the notes trading 2 to 3 points above their issue prices.

After a strong break on Wednesday that saw the par-pricing notes rise to a 102-handle, Unifrax’s 5¼% senior secured notes due 2028 (B2/B-) continued to gain.

They were changing hands in the 102½ to 103 context throughout Thursday’s session, a source said.

There was $26 million in reported volume.

While volume in the second tranche was light, Unifrax’s 7½% senior notes due 2029 (Caa2/CCC+) also continued their upward momentum.

The notes rose to a 103-handle and were changing hands in the 103 to 103 5/8 context during the session.

However, there was only $6 million in reported volume.

The notes were marked at 102½ bid, 103 offered after breaking for trade on Wednesday.

Unifrax priced an $800 million tranche of the 5¼% notes and a $400 million tranche of the 7½% senior notes due 2029, both at par on Wednesday.

The 5¼% notes priced tighter than talk for a yield in the 5½% area; the 7½% notes priced tighter than talk in the 7¾% area.

101-handle

In keeping with the majority of deals to price since the primary market resumed activity in September, CNX Midstream’s 4¾% senior notes due 2030 and Diversey’s 4 5/8% senior notes due 2029 were putting in strong performances in the aftermarket.

Both issues were seen on a 101-handle on Thursday.

CNX’s 4¾% senior notes due 2030 closed the day at 101¼ with more than $40 million in reported volume.

CNX priced a $400 million issue of the 4¾% notes at par on Wednesday.

Diversey’s 4 5/8% senior notes due 2029 were trading in a tight range of 101½ to 101¾ on Thursday.

There was about $16 million in reported volume.

Diversey priced a $500 million issue of the 4 5/8% notes at par on Wednesday.

Pricing came at the tight end of yield talk in the 4¾% area.

The deal was heard to be 10x oversubscribed.

Coinbase losses mount

While the majority of deals to price over the past two weeks have traded up in the aftermarket, Coinbase Global’s senior guaranteed notes were not among them.

The notes continued to move lower on Thursday with both tranches down about 1 point.

Coinbase’s 3 3/8% senior notes due 2028 were changing hands in the 98 to 98¼ context heading into the market close.

There was more than $91 million in reported volume.

The 3 5/8% senior notes due 2031 were changing hands in the 97 7/8 to 98 1/8 context heading into the market close.

There was more than $100 million on the tape heading into the close.

While the deal was heard to have played to heavy demand during bookbuilding, both tranches have traded below par since shortly after pricing.

$676 million Thursday inflows

The dedicated high-yield bond funds saw substantial net daily inflows of $676 million on Thursday, according to a market source.

High-yield ETFs saw the lion's share of activity, $561 million of inflows on the day.

Actively managed high-yield funds saw $115 million of inflows on Thursday, the source said.

News of Thursday's daily flows was followed by a Thursday report that the combined funds sustained $499 million of net outflows in the week to Wednesday's close, according to the Refinitiv Lipper Fund Flow Report Newsline.

Indexes

The KDP High Yield Daily index gained 1 basis point to close Thursday at 70.5 with the yield 3.43%.

The index was down 1 bp on Wednesday and was unchanged on Tuesday after climbing 4 bps on Monday.

The CDX High Yield 30 index shaved off 1 bp to close Thursday at 109.85. The index was up 15 bps on Wednesday, was down 5 bps on Tuesday and was up 10 bps on Monday.

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