Junk market: Carvana eyed, weaker in secondary; VistaJet under water; Vermilion weakens

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 21 – No new issues priced in the junk bond primary market on Thursday, but one acquisition deal was actively being worked on in the shadows.

Meanwhile, it was a volatile day in the secondary space with the market opening with gains but closing with losses as the 10-year Treasury yield continued to climb.

“We opened with a very firm tone then things came unglued,” a source said.

While the market was up ¼ to 3/8 point at the open, it again succumbed to selling pressure following the latest jobless claims report and comments from Federal Reserve chair Jerome Powell solidifying expectations for a 50 basis points rate increase in May.

However, trading activity in the space remained light and the selling activity that did take place was orderly.

“Things are lower, but it doesn’t feel like a sell-off,” a source said.

Outside of recent issues, Carvana Co.’s 5½% senior notes due 2027 (CCC+) were under pressure in active trading as the company prepares the acquisition deal mentioned above.

From recent issues, VistaJet’s (XO Management Holding, Inc./VistaJet Malta Finance plc) 7 7/8% senior notes due 2027 (Caa1/B-/BB-) were under water in active trading, which sources attributed to the general weakness in the market.

Vermilion Energy Inc.'s 6 7/8% senior notes due 2030 (B3/BB-/BB-) were weaker although they maintained a premium to their discounted issue price.

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