Junk bonds: Vail Resorts, Encino Acquisition drive by; Citrix rises; Uniti comes in

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 24 – The domestic high-yield primary market returned to action on Wednesday with drive-by deals from Encino Acquisition Partners Holdings, LLC and Vail Resorts, Inc. clearing the market.

While Tenneco Inc. had planned on pricing a $364.5 million offering of 5.5-year senior bullet notes the offering was pulled with a single investor taking down the whole amount.

Meanwhile, the secondary space was again soft on Wednesday after wiping out losses from the previous week over the past two sessions.

The cash bond market was firm at the open but leaked as the session progressed with higher-for-longer concerns again dragging down the market, a source said.

New issues were once again in focus with the primary market reactivating.

However, earnings-related and topical news were the driving force of volume as market players awaited the deals in the pipeline to break for trade.

Tenneco’s 8% senior secured notes due 2028 (B1/B) were on the rise in heavy volume on the back of the company’s latest offering to clear its bridge loan.

Cloud Software Group Holdings Inc.’s (Citrix) 9% second-lien notes due 2029 (Caa2/B-) and Citrix Systems Inc./Tibco Software Inc.’s 6½% senior secured first-lien notes due 2029 (B2/B), also hung debt deals, were in focus with the notes improved in heavy volume.

Uniti Group LP’s senior notes also continued to see activity after the large gains of the previous session.

While the company’s 6½% senior notes due 2029 (Caa2/CCC) gave back some gains after a meteoric rise on Tuesday, the 10½% senior secured notes due 2028 (B2/B) were holding on to their gains in heavy volume.

Tenneco rises

Tenneco’s 8% senior secured notes due 2028 were moving higher in heavy volume with the company’s latest capital raise to clear the remainder of its bridge loan a positive for the notes.

The 8% secured notes added 1 to 1½ points to trade up to a 93-handle.

They were trading in the 93¼ to 93¾ context heading into the market close with the yield about 9¾%, a source said.

There was $37 million in reported volume.

Tenneco’s 8% notes have made a dramatic recovery since the $1.9 billion issue priced at 85 to yield 11.933% in August of 2023.

The notes were once hailed a disaster and spent most of 2023 wallowing below issue price.

However, the notes surged alongside the broader market in the final weeks of 2023.

Citrix in focus

Cloud Software’s (Citrix) 9% second-lien notes due 2029 and Citrix/Tibco’s 6½% senior secured first-lien notes due 2029 (B2/B) were in focus on Wednesday with the notes on the rise on positive numbers.

The higher yielding 9% second-lien notes due 2029 were outpacing their lower yielding, higher ranking counterpart.

The 9% notes added 3 points and were trading at 97¼ heading into the market close, a source said.

The yield was about 9 5/8%.

There was $67 million in reported volume.

The 6½% senior secured first-lien notes due 2029 added ¼ point to close the day wrapped around 95.

The yield was about 7¾%.

There was $41 million in reported volume.

Both tranches priced at deep discounts to clear hung debt from Vista Equity Partners and Evergreen Coast Capital Corp.’s buyout of Citrix.

The Citrix/Tibco 6½% notes priced at 83.561 to yield 10% in September 2022; the Cloud Software 9% notes priced at 79 to yield 14% in April 2023.

Uniti mixed

Uniti’s senior notes were again the focus of activity with the notes mixed after news of Uniti’s and Windstream’s imminent merger announcement sending the notes soaring the previous session.

Uniti’s 10½% senior secured notes due 2028 were largely unchanged in heavy volume with the notes continuing to trade on a 103-handle.

They were wrapped around 103¾ with the yield about 9% heading into the market close, a source said.

There was $14 million on the tape.

The notes added 2 points the previous session.

While activity in the tranche was light, Uniti’s 6½% senior notes due 2029 were coming in after the meteoric gains of the previous session.

The 6½% notes fell 2 to 2½ points with the notes dropping to a 79-handle.

They were wrapped around 79½ with the yield 12¼% heading into the market close, a source said.

There was $3 million in reported volume.

Uniti’s notes jumped on Tuesday on headlines that Uniti and Windstream were on the cusp of reaching a merger agreement.

The merger chatter first circulated the market in February.

Indexes

The ICE BofAML US High Yield index dipped 3.4 basis points with year-to-date returns now 0.421%.

The index added 38.7 bps on Tuesday and 30.1 bps on Monday.

The CDX High Yield 30 index fell 21 bps to close Wednesday at 106.03.

The index added 39 bps on Tuesday and 50 bps on Monday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.