PS Logistics on tap in junkland; Wesco Aircraft mixed; Southwestern climb continues

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 2 – Primary market activity remained relegated to the Scandinavian market on Thursday with another dollar-denominated deal pricing.

Antwerp-based maritime petroleum transporter Euronav NV priced $200 million of five-year senior notes.

However, there continued to be inklings of what domestic high-yield primary market’s post-Labor Day calendar will look like with another refinancing deal announced.

PS Logistics disclosed plans to sell $300 million of senior notes alongside a $385 million term loan in September.

Meanwhile, the already slow pace of secondary market activity was reduced to a crawl on Thursday with pre-holiday weekend activity further hampered by the destruction Hurricane Ida wrought on the New York, New Jersey and Connecticut tristate area.

However, Wolverine Escrow’s junk bonds (Wesco Aircraft Holdings Inc.) remained active with the notes mixed following a multipoint slide the previous session.

While volume in the name was light, Southwestern Energy Co.’s 5 3/8% senior notes due 2030 (Ba3/BB-/BB-) continued to climb higher on a strong day for energy.

Meanwhile, high-yield mutual and exchange-traded funds saw $1.05 billion enter the space through Wednesday’s close, according to the Refinitiv Lipper Fund Flow Report Newsline.

It was the first billion-plus inflow into the space in several months.

The primary

Antwerp-based maritime petroleum transporter Euronav priced $200 million of 6¼% five-year senior notes on Thursday.

As with most of the August-September crossover week's thin stream of new issue business, the deal was run by Scandinavian investment banks.

Meanwhile, an altogether modest September calendar took aboard one more name on Thursday.

PS Logistics disclosed plans to sell $300 million of senior notes via Credit Suisse, as part of a debt refinancing effort.

The refinancing also includes a $385 million term loan scheduled to launch on Sept. 13, a week after Labor Day.

The high-yield new issue market is expected to be busy in September.

However, the robust forecasts of early August (one calling for a $60 billion September) have given way to less ostentatious numbers, sources say.

A portfolio manager is looking for $75 billion of business to hit the leverage markets in the month ahead, 40% of it to come in the form of high-yield bonds, the rest as bank loans.

Wesco Aircraft rebounds

Wolverine Escrow’s junk bonds remained in focus on Thursday although the tranches were mixed following a multipoint decline the previous session.

Wolverine Escrow is the issuing entity for Wesco Aircraft Holdings Inc., which now does business as Incora following its merger with Platinum Equity’s Pattonair in early 2020.

The 8½% senior notes due 2024 rose about ½ point. They were changing hands in the 90½ to 90¾ context heading into the market close, a source said.

The notes remained active with more than $13 million in reported volume.

However, the company’s 9% senior notes due 2026 were largely unchanged. They continued to trade in the 90 to 90¼ context in high-volume activity.

There was about $20 million in reported volume during Thursday’s session.

Both tranches sank about 5 points in active trading on Wednesday following disappointing earnings and the resignation of the company’s chief financial officer.

Southwestern climbs

Southwestern Energy’s 5 3/8% senior notes due 2030 continued to shoot higher amid thin liquidity and a strong day for energy.

While volume in the name was light, the notes were up another ½ point.

They were changing hands in the 105 to 105 3/8 context heading into the market close, according to a market source.

The notes have climbed 1¾ points on the week with rising crude oil futures and thin liquidity boosting the notes.

Thursday was another strong day for energy with WTI crude oil futures hitting a one-month high.

WTI crude oil rose to settle at $69.67, an increase of $1.08 or 1.57%.

WTI crude oil futures wavered between gains and losses on Wednesday as OPEC met and announced their decision to stick with the July agreement to increase oil output.

However, futures were bolstered on Thursday by a larger-than-expected draw from U.S. inventories.

Indexes

The KDP High Yield Daily index gained 7 basis points to close Thursday at 70.35 with the yield now 3.55%. The index gained 5 bps on Wednesday, 8 bps on Tuesday and 10 bps on Monday.

The CDX High Yield 30 index inched up 2 bps to close Thursday at 109.88. The index rose 5 bps on Wednesday, shaved off 2 bps on Tuesday and was flat on Monday.

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