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Cleveland-Cliffs on tap; American Airlines tanks; energy losses mount
By Paul A. Harris and Abigail W. Adams
Portland, Me., Feb. 26 – While the domestic high-yield primary market saw another quiet session Wednesday with coronavirus-induced volatility continuing to sideline deal making, the forward calendar did grow.
Cleveland-Cliffs Inc. plans to roll out a $950 million two-part offering of eight-year notes on an investor call on Thursday with pricing expected on Friday.
Meanwhile, it was a volatile day for the secondary space with the market opening Wednesday’s session with gains but closing out the day largely flat, sources said.
While the overall market was holding on Wednesday, losses continued to mount for the energy sector with WTI crude oil futures settling well below the $50 a barrel threshold.
Several of the deals from the energy sector that came in January are now trading with deep discounts.
Genesis Energy, LP and Genesis Energy Finance Corp.’s 7¾% senior notes due 2028 (B1/B+) and MEG Energy Corp.’s 7 1/8% senior notes due 2027 (B3/BB-/B+) are two recent deals that lost their premium over the past few sessions and are now trading firmly below par.
Chesapeake Energy Corp.’s 11½% senior notes due 2025 tanked following its earnings report.
American Airlines Group Inc.’s recently priced 3¾% senior notes due 2025 (B1/BB-/BB-) also continued to trade off on Wednesday with the travel sector particularly hard hit by investor concern over the spreading coronavirus.
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