Junk: EQM Midstream prices; goeasy flat; First Quantum active; Community Health squeezed

By Paul A. Harris and Abigail W. Adams

Portland, Me., Feb. 21 – On Wednesday EQM Midstream Partners, LP priced a $600 million issue of five-year senior notes (Ba3/BB-/BB) at par to yield 6 3/8% in a drive-by.

The yield printed at the tight end of the 6 3/8% to 6½% yield talk.

Meanwhile, it was a soft day in the secondary space on Wednesday with the cash bond market off about 1/8 point, sources said.

While soft, the market continued to hold in well as Treasuries had some selling pressure after the release of the Federal Open Market Committee minute notes, which again pushed back the timeline for the start of rate cuts.

Treasury yields continued to creep higher with the two-year yield closing up 5.2 basis points at 4.67% and the 10-year yield up 4 bps at 4.321%.

From recent issues, goeasy Ltd.’s new 7 5/8% senior notes due 2029 (Ba3/BB-) were lower alongside the broader market with the notes giving up the nominal premium gained on the break to close the day wrapped around par.

First Quantum Minerals Ltd.’s 8 5/8% senior notes due 2031 (B) were trading in heavy volume but little movement in price on Wednesday after the company announced a new refinancing deal to take out its 2025 and 2026 notes.

With the pipeline slowing down, attention was shifting to topical and earnings-related news.

Community Health Systems, Inc.’s senior notes were under pressure after disappointing earnings and weak guidance.

goeasy flat

goeasy’s new 7 5/8% senior notes due 2029 gave back the nominal gains made on the break on Wednesday with the notes returning to their issue price.

The notes were lower than Tuesday’s levels by 1/8 to ¼ point.

They were changing hands in the 99 7/8 to par 1/8 context heading into the market close, a source said.

The notes closed the previous session in the par to par ¼ context.

goeasy priced a $400 million issue of the 7 5/8% notes ag par in a Tuesday drive-by.

The yield printed at the tight end of yield talk in the 7¾% area.

First Quantum active

First Quantum’s 8 5/8% senior notes due 2031 were active although little changed after the company announced a new refinancing deal to take out its 2025 and 2026 notes.

The 8 5/8% notes continued to trade on a 92-handle, a level they have traded at for much of 2024.

The notes were trading in the 92¼ to 92¾ context heading into the market close with the yield about 10¼%, a source said.

The notes traded as low as a 77-handle in November 2023 after widespread protests and legal challenges shuttered its Panamanian copper mine.

However, the notes staged a significant recovery in early January on buyout speculation.

Community Health under pressure

Community Health Systems was under pressure on Wednesday with its senior notes falling 1 to 2 points after disappointing earnings and weak guidance.

The 10 7/8% senior secured notes due 2032 (Caa1/B-/B+) sank 1½ to 2 points with the notes closing the day wrapped around 103¾, according to a market source.

The yield widened to 9 7/8%.

The notes were trading on a 105-handle heading into earnings.

The 8% senior secured notes due 2027 were down 2 points to close the day wrapped around 97.

The yield was just shy of 9%.

The notes were lower on earnings with the company missing EBITDA expectations and issuing guidance that also fell short of expectations, a source said.

Indexes

The KDP High Yield Daily index fell 7 bps to close Wednesday at 50.35 with the yield 6.97%.

The index inched up 2 bps on Tuesday.

The ICE BofAML US High Yield index was down 4.8 bps with the year-to-date return now negative 0.143%.

The index added 10.4 bps on Tuesday.

The CDX High Yield 30 index shaved off 3 bps to close Wednesday at 105.97.

The index was also off 3 bps on Tuesday.

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