Junk quiet, secondary heavy as CPI print rattles markets; recent deals struggle

By Paul A. Harris and Abigail W. Adams

Portland, Me., Feb. 13 – In the wake of Monday’s massive $6.2 burst of new issuance – the biggest primary market session in almost three years – the new deal machine was parked along the curb, on Tuesday.

A hotter-than-expected Consumer Price Index report, with its implications for central bank monetary policy, set off selling in a big swath of the U.S. capital markets on Tuesday, including the high-yield bond market.

“The market was ugly today,” a source said.

Sellers were active in the space with EFTs circulating several large bids-wanted-in-competition lists.

New paper remained in focus; however, the deluge of deals to price during Monday’s session were struggling under the heavy market conditions.

TransDigm Inc.’s two tranches of first-lien senior secured notes (Ba3/B+) sank to a 99-handle in heavy volume with the outsized demand for the notes doing little to alleviate the selling pressure in the secondary space on Tuesday.

Sally Beauty Supply LLC’s 6¾% senior notes due 2032 (Ba2/BB-), AmWINS Group, Inc.’s 6 3/8% senior secured notes due 2029 (Ba3/B+), and CNX Resources Corp.’s 7¼% senior notes due 2032 (B1/BB/BB+) were also struggling and closed the session below par.

Amer Sports Co.’s recently priced 6¾% senior secured notes due 2031 (B1/BB) gave back most of their gains on Tuesday with the notes now wrapped around their issue price after jumping to a 101-handle on the break.

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