Morning Commentary: Fortrea notes on deck; Calumet Specialty Products starts roadshow

By Paul A. Harris

Portland, Ore., June 12 – The lights came up in the high-yield new issue market on Monday as Fortrea Holdings Inc. set talk in a deal slated to price before the session’s close, and Calumet Specialty Products Partners, LP began a brief roadshow.

Fortrea talked its $570 million offering of seven-year senior secured notes (Ba3/BB/BB+) to yield 7½% to 7¾%, inside of initial guidance in the high-7% to 8% area.

Books close at noon ET on Monday, and the deal is set to price thereafter.

Meanwhile, Calumet Specialty Products and co-issuer Calumet Finance Corp. kicked off a $325 million offering of five-year senior notes with initial guidance in the 9% to 10% area.

The roadshow runs through Tuesday.

Away from new issue news, the broad market was unchanged to slightly better on Monday morning, according to a bond trader in New York, who remarked that activity in the secondary market was muted as the week got underway.

A small Monday morning trade saw the new HUB International Ltd. 7¼% senior secured notes due June 2030 (B2/B) change hands at par ¾, unchanged, the trader said.

The $2.175 billion issue priced at par last Thursday.

The recently minted Ryman Hospitality Properties, Inc. 7¼% senior notes due July 2028 (B1/B+) were 101 bid, 101½ offered, also unchanged.

The Copeland (Emerald Debt Merger Sub LLC/Emerald Co-Issuer Inc.) 6 5/8% senior secured notes due Dec. 15, 2030 (Ba3/BB-/BB-), a big, liquid issue that came in the middle of spring, were also unchanged at mid-morning on Monday, 99½ bid, par offered, in odd-lot trading, the source said.

The $2.275 billion issue priced at par on May 4.

With the Dow Jones industrial average up 0.13% at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was down 0.23%, or 18 cents, at $74.54.

Fund flows

High-yield ETFs sustained $195 million of daily cash outflows on Friday, according to a market source.

Actively managed high-yield funds were positive on the day, posting $43 million of inflows on Friday, the source said.

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