Risk-on junk bond rally continues; Carnival above water; Carvana short-duration notes jump

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 26 – The domestic high-yield primary market remained idle on Thursday with no expectations for activity during Friday’s pre-holiday shortened session.

The risk-on rally continued on Thursday in the secondary space as the market dialed back expectations for an aggressive rate-hike schedule from the Federal Reserve in the second half of the year.

The cash bond market shot up more than 1 point, adding to Wednesday’s 1 point increase.

Carnival Corp.’s 10½% senior notes due 2030 (B2/B) shot above water on Thursday with the notes now trading with a strong premium to their issue price.

Carvana Co.’s recently priced 10¼% senior notes due 2030 (Caa2/CCC) improved in active trading.

However, the company’s 5 5/8% senior notes due 2025 (Caa2/CCC) remained the preferred tranche for buyers with the notes shooting up 5 points.

The badly battered retail space also continued to improve with Macy's Retail Holdings LLC’s senior notes making large gains after strong earnings.

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