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Junk primary prices $2.6 billion; SVC, Axalta at premium; funds see $6.26 billion inflow
By Paul A. Harris and Abigail W. Adams
Portland, Me., Nov. 9 – Measured against the languid pace of the 2023 primary market, it was a big Thursday in junkland.
Five issuers printed a combined $2.6 billion face amount of dollar-denominated speculative-grade notes.
Parsing the action late in the afternoon, a trader said that the NOVA Chemicals Corp. deal was a blowout.
The Canadian petrochemical company priced a $400 million issue of 8½% five-year senior secured first-lien notes (Ba1/BB+) at 99.989 to yield 8½%, on top of talk.
The deal was five-times to six-times oversubscribed, according to the trader who had the new NOVA bonds going out the door at 101 3/8 bid, 101 5/8 offered.
Thursday’s biggest deal came from Spirit AeroSystems, Inc., which priced $1.2 billion of seven-year senior secured second-lien notes (B3/B-) at par to yield 9¾%, in the middle of talk.
Meanwhile, the secondary space again saw selling pressure on Thursday after a largely flat week.
Service Properties Trust’s (SVC) 8 5/8% senior secured notes due 2031 (B1/BB) and Axalta Coating Systems Ltd.’s 7¼% senior notes due 2031 (B1/BB-) were trading at a healthy premium to their issue prices.
High-yield mutual funds and exchange-traded funds saw a historic inflow over the past week after a year of heavy outflows.
Funds saw $6.26 billion enter the space in the week through Wednesday’s close, according to the Lipper Fund Flow report.
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