Carvana on deck; secondary volatile; Twitter jumps on takeover; Gap losses mount

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 25 – Monday brought the announcement of a well-telegraphed supersize offering of junk bonds coming to support an acquisition.

Carvana Co. took the wraps off a $2.275 billion single-tranche offering of eight-year senior notes (Caa2/CCC+), in the market with 10% to 10½% initial guidance.

Elsewhere the European high-yield new-issue bourse generated news for the first time in 10 weeks, on Monday, when Edinburgh, Scotland-based home builder Miller Homes announced an £815 million equivalent offering of senior secured notes (B1/expected B+/expected B+) in two benchmark tranches.

Monday marked another topsy-turvy day for risk assets with the high-yield secondary space opening the day down 1/8 to ¼ point but closing with a ½ point gain.

However, trading activity was light with the exception of one name.

Twitter, Inc.’s senior notes (Ba2/BB+) dominated activity in the secondary space on Monday with the notes rising 2 to 3 points following news Tesla Inc. chief executive officer Elon Musk’s takeover bid for the company was successful.

While the market was stronger on Monday, Gap, Inc.’s 3 5/8% senior notes due 2029 (Ba3/BB) continued to sink in active trading.

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