Adtalem prices upsized issue; Spanish Broadcasting trades up; Carnival sinks further

By Abigail W. Adams

Portland, Me., Feb. 12 – The domestic high-yield primary market had a subdued session on Friday with only one deal pricing.

Adtalem Global Education Inc. priced an upsized $800 million issue of seven-year senior secured notes (B1/BB-).

The notes were trading with a premium on the break.

Meanwhile, it was a relatively quiet day in the secondary space with the market unchanged and volume light heading into the holiday weekend, sources said.

While the issue was small, Spanish Broadcasting System Inc.’s 9¾% senior secured notes due 2026 (B3/B-) were trading with a solid premium in the aftermarket.

Meanwhile, Carnival Corp.’s 5¾% senior notes due 2027 (B2/B+) sank further below water in active trading.

Outside of recent issues, Bombardier, Inc.’s junk bonds were under pressure on Friday with the structure sinking 1½ to 3 points after the company announced it was ending production of its Learjet.

Adtalem upsizes, trades up

Adtalem was the sole issuer to clear the primary market on Friday.

The Chicago-based workforce solutions provider priced an upsized $800 million offering of seven-year senior secured notes (B1/BB-) on Friday at par to yield 5½%, according to a market source.

Pricing came on top of talk for a yield of 5½%.

The deal was initially launched as a $650 million issue.

The new paper had a strong break and was marked at par ½ bid, 101 offered.

The deal was interesting with the notes offering a solid yield given the tight pricing in the market, a source said.

Spanish Broadcasting moves up

Spanish Broadcasting’s 9¾% senior secured notes due 2026 (B3/B-) were trading with a healthy premium in the aftermarket.

The notes were marked at 101 bid, 102 offered early in the session.

However, they came in as the session progressed and were marked at par ½ bid, 101½ offered.

While the issue was small, the notes were active with more than $21 million in reported volume.

Spanish Broadcasting priced a $310 million issue of the 9¾% notes at par on Thursday.

Pricing came wider than the 9¼% to 9½% yield talk. Early guidance was 8 3/8% to 8½%.

Carnival sinks further

Carnival’s newly priced 5¾% senior notes due 2027 (B2/B+) sank further underwater in active trading on Friday.

The notes traded in a range of 99¼ to 99 5/8 and stood poised to close the day at 99 3/8, a source said.

They closed the previous session at 99½ bid, 99¾ offered.

The notes have struggled since breaking for trade with hedge funds leaning into the notes, a source previously said.

Carnival priced a $3.5 billion issue of the 5¾% notes at par on Wednesday.

Bombardier under pressure

Bombardier’s junk bonds were under pressure on Friday with the capital structure dropping 1½ to 3 points.

The 7 7/8% senior notes due 2027 were the most active of the structure.

The notes were down 1¾ points and stood poised to close the day at 89½.

Bombardier’s 6 1/8% senior notes due 2023 were also down 1¾ point to 99¾.

The 7½% senior notes due 2025 dropped 1 5/8 points to 90 3/8.

The 7.45% notes due 2034 dropped 3 points to 90.

The Canadian manufacturer of business jets’ capital structure was under pressure after the company announced that it was ending the production of the Learjet and eliminating 1,600 jobs.

Indexes flat

Indexes closed Friday largely flat although all posted gains on the week.

The KDP High Yield Daily index shaved off 1 point to close the day at 69.83 with the yield 3.75%.

The index dropped 2 points on Thursday, rose 6 points on Wednesday, 5 points on Tuesday and 7 points on Monday.

The index posted a cumulative gain of 15 points on the week.

The ICE BofAML US High Yield index shaved off 2.1 bps with the year-to-date return now 1.385%.

The index gained 5.2 bps on Thursday, 6.3 bps on Wednesday, 6.9 bps on Tuesday and 13.3 bps on Monday.

The index was up 29.6 bps on the week.

The CDX High Yield 30 index shaved off 1 point to close Friday at 109.46.

The index took off 4 points on Thursday, gained 10 points on Wednesday, fell 19 points on Tuesday and was up 11 points on Monday.

The index posted a cumulative loss of 3 points on the week.

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