Lindblad drives-by; Kedrion on deck; Cengage jumps on private investment; Cleveland-Cliffs falls

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 17 – The domestic high-yield primary market saw one deal price and one more join the forward calendar on Monday.

Lindblad Expeditions Holdings, Inc. was Monday's sole junk bond issuer, as it priced $275 million of five-year senior secured notes (B3/B) in a drive-by.

	Italy-based	Kedrion Biopharma	began marketing a $790 million offering of	Kevlar SpA	6½% senior secured notes due Sept. 1, 2029 (B3/B) with pricing expected later in the week.
	The European primary market was also active with CABB Group launching a €670 million two-tranche offering of	Monitchem Holdco 3 SA	five-year senior secured notes (B3/B) and	Grunenthal GmbH	beginning a two-day roadshow for a €300 million offering of seven-year senior secured notes (B1/BB-/BB+).
	Meanwhile, it was a quiet day in the secondary space with the cash bond market either side of unchanged as it enters into the heart of earnings season, which will be closely watched as market players continue to debate the likelihood and severity of a recession.
	Trading was muted as market players awaited the deal in the pipeline with activity surrounding recent issues continuing to slow with many having already found their level, a source said.
	Baytex Energy Corp.’s 8½% senior notes due 2030 (B1/BB-/BB-) were slightly weaker in active trade although the notes continued to trade with a strong premium to their discounted issue price.
	Cleveland-Cliffs Inc.’s recently priced 6¾% senior guaranteed notes due 2030 (Ba3/BB-/BB-) saw heavy selling pressure on Monday with the notes breaking below a 98-handle.
	Topical news pushed	Cengage Learning, Inc.’s 9½% senior notes due June 15, 2024 (Caa2/CCC) into focus with the notes making large gains on the back of a $500 million private investment.
Monday’s primary
	Lindblad Expeditions Holdings was Monday's sole junk bond issuer, as it priced $275 million of five-year senior secured notes (B3/B) at par to yield 9% in a drive-by.
	The yield printed at the wide end of yield talk.
	The deal was heard to have played to $400 million of demand, according to a high-yield bond trader who saw the new Lindblad 9% secured notes offered in the secondary market, late Monday.
	Elsewhere Italy-based Kedrion Biopharma commenced marketing a $790 million offering of Kevlar 6½% senior secured notes due Sept. 1, 2029 (B3/B) on Monday.
	Initial talk has the notes coming at OID 84 to yield approximately 10%.
	The deal is set to price later in the April 17 week.
	The euro-denominated market was also active on Monday.
	CABB Group launched a €670 million two-tranche offering of Monitchem Holdco 3 SA five-year senior secured notes (B3/B), in fixed-rate and floating-rate tranches.
	Initial guidance on both tranches is in the 9% area, a market source said.
	And Grunenthal began a two-day roadshow for a €300 million offering of seven-year senior secured notes (B1/BB-/BB+).
Baytex active
	Baytex’s 8½% senior notes due 2030 were slightly weaker in active trade on Monday although they continued to trade at a strong premium to their discounted issue price.
	The 8½% notes were off about ¼ point to trade in the 99	7/8 to par 1/8 context, a source said.
	There was $24 million in reported volume.
	The notes have made strong gains since the $800 million issue priced at 98.709 to yield 8¾% on April 13.
Cleveland-Cliffs falls
	Cleveland-Cliffs’ recently priced 6¾% senior guaranteed notes due 2030 saw heavy selling pressure on Monday, breaking below a 98-handle.
	The notes sank 1¼ point to close the day wrapped around 98, a source said.
	There was $19 million in reported volume.
	The 6¾% notes have struggled in the aftermarket since the $750 million issue priced at par on April 11.
	The notes were weak on the break and continued to lose steam in the aftermarket.
	They were changing hands on a 99-handle heading into Monday’s session.
Cengage in focus
	Cengage’s 9½% senior notes due June 15, 2024 were in focus on Monday with a capital infusion from a private investor lifting the short-dated notes.
	The 9½% notes jumped 2½ points in heavy volume, a source said.
	They closed the day at par 1/8 with the yield 7	5/8%.
	There was $30 million in reported volume.
	The notes made large gains on news Apollo Funds would purchase $500 million in newly issued convertible preferred stock.
Fund flows
	The dedicated high-yield bond funds saw a hefty $1.013 billion of net daily cash inflows on Friday, the most recent session for which data was available at press time, according to a market source.
	High-yield ETFs saw $743 million of inflows on the day.
	Actively managed high-yield funds saw $270 million of inflows on Friday, the source said.
	The combined funds are tracking $3.18 billion of net inflows on the week that will conclude with Wednesday's close, according to the market source.
Indexes
	The KDP High Yield Daily index fell 10 points to close Monday at 51.89 with the yield 7.08%.
	The index posted a cumulative gain of 28 points on the week last week.
	The ICE BofAML US High Yield index was down 19.8 basis points with the year-to-date return now 4.293%.
	The CDX High Yield 30 index inched up 3 bps to close Monday at 101.69.
	The index posted a cumulative gain of 122 bps on the week last week.

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