Junk: Clear Channel plays to heavy demand; Spirit Aero jumps on Boeing takeover chatter

By Abigail W. Adams

Portland, Me., March 1 – The domestic high-yield primary market was quiet on Friday with the pipeline slowing after a steady stream of issuance throughout the week.

The steady pace of issuance is expected to continue in the week ahead with one deal slated to price on Monday.

Clear Channel Outdoor Holdings, Inc. circulated price talk for its $865 million offering of six-year senior secured notes (B1/B) with books expected to close at 12 p.m. EST on Monday.

The offering was playing to strong demand with books multiple-times oversubscribed and the deal expected to be upsized.

Aston Martin Lagonda Global Holdings plc is also expected to surface with a £1.1 billion equivalent dual-currency offering of senior secured notes with investor calls scheduled for the week ahead.

Meanwhile, the secondary space was firm on Friday with the cash bond market closing the day up 1/8 to ¼ point as Treasury yields came in, a source said.

While the market had a largely sideways week as it braced for the latest Personal Consumption Expenditure report, it was “inching” higher after the report failed to produce any surprises.

With the deals to price over the past week largely tucked away, topical news was moving the tape on Friday.

Spirit AeroSystems Inc.’s senior notes soared as news broke midsession that Boeing Co. was in talks to acquire the aerostructures manufacturer.

DISH DBS Corp.’s senior notes were mixed in active trade after the company issued a going concern notice as it addressed plans to tackle its 2024 maturities.

Clear Channel in demand

Clear Channel talked its $865 million offering of six-year senior secured notes (B1/B) to yield 8% to 8¼% with pricing expected on Monday, according to market sources.

Early guidance was for a yield of 8¼% to 8½%.

The deal was playing to strong demand with $3.5 billion in the books by mid-afternoon Friday, a source said.

However, the concurrent $425 million term loan was heard to be struggling.

The deal is expected to upsize by the size of the term loan, a source said.

Aston Martin shops offering

Aston Martin is expected to surface in the week ahead with a £1.1 billion equivalent dual-currency offering of senior secured notes, according to a market source.

Fixed-income investor calls are scheduled for Monday through Wednesday with an offering of a dollar-denominated and a sterling-denominated tranche with a five- or seven-year duration expected to follow.

Spirit AeroSystems surges

Spirit AeroSystems surged in heavy volume on Friday as news broke midsession that Boeing was in talks to acquire its former business unit and current supplier.

Spirit AeroSystems’ 9¾% senior secured second-lien notes due 2030 (B3/B-) jumped more than 4 points.

They were trading at 111½ in the late afternoon.

There was $47 million in reported volume.

The 4.6% senior notes due 2028 (Caa1/CCC+) jumped 5½ points to trade at 93 7/8 in the late afternoon.

There was $20 million in reported volume.

News broke midsession that Boeing was in talks to acquire the aerostructures manufacturer.

“This makes me laugh,” a source said.

Both Boeing and Spirit AeroSystems have been plagued with quality control issues over the past year.

Spirit AeroSystems has been the supplier responsible for several non-conforming parts that resulted in delivery delays of Boeing’s 737 Max jets.

Boeing is still under fire from a door that blew off an Alaska Airlines’ plane mid-flight.

DISH mixed

DISH’s senior notes were mixed in active trade on Friday as the market digested a large earnings miss and a going concern warning.

While DISH warned it did not have the funds on hand to cover its 5 7/8% senior notes due Nov. 15, 2024 (Caa3/CCC+), the 5 7/8% notes improved in heavy volume.

The 5 7/8% notes were under pressure early in the session.

They traded as low as 92¾ at the open.

However, the notes improved after the company hosted its earnings conference call.

The notes traded up to a 95-handle and were seen changing hands at 95¼ in the late afternoon, a source said.

The yield was 13¼%.

There was $24 million in reported volume.

While the company does not have the cash on hand to cover the issue, they are actively pursuing financing and restructuring options, a source said.

“They’re working on it,” a source said.

DISH’s 7¾% senior notes due 2026 (Caa3/CC) were also lifted with the notes trading at 65½ in the late afternoon.

They yield was about 29 1/8%.

There was $18 million in reported volume.

However, DISH Network Corp.’s 11¾% senior secured notes due 2027 (Caa1/B) were weaker.

The notes shaved off about ½ point to trade at 103¾ in the late afternoon.

The yield was about 10 1/8%.

Indexes

The KDP High Yield Daily index gained 13 basis points to close Friday at 50.57 with the yield now 6.91%.

The index gained 5 bps on Thursday, inched up 1 bp on Wednesday, was down 4 bps on Tuesday and fell 12 bps on Monday.

The index gained 3 bps on the week.

The CDX High Yield 30 index gained 17 bps to close Friday at 106.5.

The index gained 14 bps on Thursday, was down 19 bps on Wednesday, up 16 bps on Tuesday and down 14 bps on Monday.

The index gained 14 bps on the week.

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