Junk primary sells SWF, PRA, Pactiv; Springs Window sloppy on break; Coinbase down again

By Abigail W. Adams

Portland, Me., Sept. 17 – While new supply continued to fall short of expectations, the domestic high-yield primary market priced a cumulative $1.47 billion over three deals during Friday’s session.

SWF Escrow Issuer Corp. (Springs Window Fashions) priced a $625 million issue of eight-year senior notes (CCC), Pactiv Evergreen Group Issuer Inc. priced $500 million of seven-year senior secured notes (B1/B+) and PRA Group, Inc. priced an upsized $350 million of eight-year senior notes (Ba2//BB+) during Friday’s session.

While new paper from PRA Group was putting in a strong performance on the break, Springs Window’s offering was sloppy with the notes dropping below their issue price.

While recently priced paper remained in demand, the secondary space was soft on Friday but holding up well despite continued choppiness in equities.

The market closed the day down about 1/8 point, a source said.

Coinbase Global, Inc.’s two-tranches of senior guaranteed notes (Ba1/BB+) continued to struggle in the aftermarket with both tranches dropping down to a 97-handle.

Friday’s primary

The domestic high-yield primary market had three deals price during Friday’s session.

SWF Escrow Issuer Corp. priced $625 million of eight-year senior notes at par with a coupon of 6½%, according to a market source.

Pricing came in line with talk for a coupon in the 6½% area. Initial guidance had the deal coming to yield in the high 6% area.

The deal is backing the buyout of Springs Window Fashions by Clearlake Capital Group, LP.

The new paper was sloppy on the break. The notes traded as low as 98½ and as high as par ½ after freeing for trade.

The notes were changing hands between 99¾ and par heading into the close.

In drive-by action, Pactiv Evergreen priced $500 million of seven-year senior secured notes (B1/B+) at par with a coupon of 4 3/8%, according to a market source.

Pricing came at the tight end of talk for a yield in the 4½% area. Initial guidance was for a yield in the 4½% to 4¾% area.

And PRA Group priced an upsized $350 million, from $300 million, issue of eight-year senior notes (Ba2//BB+) on Friday at par to yield 5%.

Pricing came at the tight end of talk for a yield in the 5 1/8% area. Initial guidance was in the low-5% area.

The new paper from PRA priced early in the session and was performing well in active trading.

The notes were marked at par 7/8 bid, 101 1/8 offered heading into the close, according to a market source.

There was more than $94 million on the tape.

Coinbase under pressure

Coinbase’s two tranches of senior notes remained under pressure during Friday’s session with both tranches dropping to a 97-handle.

The 3 3/8% senior notes due 2028 were changing hands in the 97½ to 97¾ context heading into the market close.

The 3 5/8% senior notes due 2031 were changing hands in the 97 3/8 to 97 5/8 context, according to a market source.

While the deal was heard to be heavily oversubscribed during bookbuilding, the notes have traded below par since hitting the aftermarket.

The notes were heavily shorted, sources said.

Fund flows

Fund flows were positive on Thursday, the most recent session that information was available.

High-yield exchange-traded funds had inflows of $191 million and actively managed funds saw inflows of $260 million, according to a market source.

The positive fund flows follow the Refinitiv Lipper Fund Flow’s weekly report that high-yield mutual and exchange-traded funds had outflows of $499 million in the week through Wednesday’s close.

Indexes

The KDP High Yield Daily index slid 2 basis points to close Friday at 70.48 with the yield now 3.43%.

The index gained 1 bp on Thursday, was down 1 bp on Wednesday and was unchanged on Tuesday after climbing 4 bps on Monday.

The index posted a cumulative gain of 2 bps on the week.

The CDX High Yield 30 index dropped 25 bps to close Friday at 109.6.

The index shaved off 1 bp on Thursday, was up 15 bps on Wednesday, was down 5 bps on Tuesday and was up 10 bps on Monday.

The index posted a cumulative loss of 6 bps on the week.

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