Morning Commentary: Crash Champions, Stena on deck; Amer Sports brings $600 million

By Paul A. Harris

Portland, Ore., Feb. 6 – The broad high-yield bond market opened unchanged on Tuesday and remained that way at mid-morning, according to a trader in New York.

With equities mixed and the yield of the 10-year Treasury 3 to 4 basis points lower on the morning, when it was yielding 4.10%, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was up 0.26%, or 20 cents, at $77.03.

Bonds priced Monday by Post Holdings, Inc., the 6¼% senior secured notes due February 2032 (Ba1/BB), were basically unchanged on the morning at par ¾ bid, 101 offered, the trader said.

Late Monday they were par 5/8 bid, 101 1/8 offered, the source recounted.

The upsized $1 billion issue (from $875 million) that priced at par was heard to have played to $4 billion of demand.

The NOVA Chemicals Corp. 9% senior notes due February 2030 (Ba3/B+), which also priced on Monday, were slightly better on the morning at par bid, par ¼ offered, the trader said.

Those notes changed hands at 99¾ bid, par 1/8 offered late Monday.

The $650 million issue priced at par, at the wide end of the 8¾% to 9% yield talk.

The primary market was active on Tuesday morning.

Stena International SA talked its $400 million offering of seven-year senior secured notes (Ba3/BB+) to yield in the 7¾% area, at the wide end of initial guidance in the 7½% to 7¾% area.

The deal, which was heard to be playing to $650 million of demand at that talk, is set to price on Tuesday.

Crash Champions LLC is also on deck with a $650 million offering of Champions Financing, Inc. five-year senior secured notes (B3/B-), talked to yield in the 9% area.

Meantime Finland-based Amer Sports Co. kicked off a $600 million offering of seven-year senior secured notes (B1/BB).

The deal is in the market with initial guidance in the low-to-mid 7% area and set to price on Thursday.

Fund flows

High-yield ETFs sustained a substantial $512 million of daily cash outflows on Monday, according to a market source.

Actively managed high-yield funds were positive on the day with $99 million of inflows, the source said.

The combined funds are tracking $504 million of net outflows on the week that will conclude with Wednesday’s close, according to the market source.

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