Wesco secured notes decline; Home Point Capital edges up but soft on week; Talen paper mixed

By Cristal Cody

Tupelo, Miss., Sept. 8 – Wesco Aircraft Holdings Inc.’s secured notes declined another 1¾ points to 2 points on Wednesday in healthy trading action.

The company’s paper was “active and lower” on the day, a trader told Prospect News. “It’s definitely been leaking. The secureds are down from the mid-90s to the high 80s.”

Wesco’s notes are trading about 3¼ points to 4 points lower week to date.

Mortgage provider Home Point Capital Inc.’s paper has been pressured also but improved about ½ point on Wednesday, sources reported.

“It’s down 2 points this week,” a source said.

Meanwhile, Talen Energy Supply LLC’s paper was mixed in mostly light trading action Wednesday.

Talen’s bonds skidded into the distressed space in May after trading in the high 95 bid area with the unsecured notes now trading under 50 bid.

The bonds have seen light trading but “should be topical very soon,” a source said, noting the company is hiring advisers.

Wesco bonds lower

Wesco Aircraft’s notes issued via Wolverine Escrow LLC are seeing depressed prices so far in September.

“Wesco Aircraft was down 2 points today,” a trader said. “The secureds were down to 87.”

Wesco’s 8½% senior secured notes due 2024 (Caa3/CCC+) shed 1¾ points to head out at 87 bid on $18 million of secondary supply.

On Tuesday, the issue dropped 2¼ points on nearly $10 million of volume.

Wesco’s 9% senior secured notes due 2026 (Caa3/CCC+) also traded 1¾ points weaker on $7 million of volume Wednesday. The notes went out at 86¼ bid.

The 9% notes declined 1½ points on $3 million of trading supply in the previous session.

The Fort Worth, Texas-based aerospace supplier reported weak second quarter earnings in August, the source said.

Wesco announced in January 2020 that it was acquired by an affiliate of investment firm Platinum Equity in a transaction valued at about $1.9 billion that took the company private.

At closing, Wesco was combined with U.K.-based aerospace and defense industry supplier Pattonair Ltd., a Platinum Equity portfolio company, to create Incora.

Home Point up ½ point

Home Point Capital’s 5% senior notes due 2026 (B3//B-) rose ½ point to 85 bid in steady action during the session, a market source said.

Home Point Capital’s notes fell 1¾ points on Tuesday with the paper about 2 points softer week to date.

The notes finished the prior week down about 1¼ points to 1½ points.

The issue has softened from trading at the 95 bid area in July following the company’s reported $73.2 million second-quarter loss.

On Tuesday, the Shareholders Foundation announced a lawsuit against the company over alleged securities laws violations.

The parent of mortgage originator and service provider Homepoint is based in Ann Arbor, Mich.

Talen notes mixed

Talen’s paper was mixed in mostly light trading action Wednesday, sources said.

The company’s 10½% senior notes due 2026 (Caa1/CCC/CCC+) fell more than 1 point to the 47 bid area on secondary volume totaling $7 million.

Talen’s 6 5/8% senior secured notes due 2028 (B1/B+/B+) rose 1 1/8 points to 87 1/8 bid on less than $1 million of secondary supply Wednesday.

Fitch Ratings downgraded The Woodlands, Tex.- and Allentown, Pa.-based power company on Aug. 31.

Distressed returns positive

Market tone was mixed Wednesday after weakening in the first post-Labor Day session on Tuesday.

Stocks were lower, while oil futures recovered after ending the prior session down 92 cents to 94 cents.

West Texas Intermediate crude oil benchmark futures for October deliveries settled up 95 cents at $69.30 a barrel.

The iShares iBoxx High Yield Corporate Bond ETF added 10 cents to finish at $87.88 after softening 23 cents on Tuesday.

Distressed index returns were positive at the start of the short market week.

The S&P U.S. High Yield Corporate Distressed Bond Index saw a 0.08% total return on Tuesday.

Month-to-date total returns were 0.49% on Tuesday, while year-to-date total returns were 27.31% in the prior session.

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