Goldman Sachs, Finance of America notes lower ahead of November calls; PBF Energy mixed

By Cristal Cody

Tupelo, Miss., Feb. 22 – Some financial paper with calls in 2022 treaded into the distressed space with yields hovering near or over 10% in post-holiday trading on Tuesday.

Goldman Sachs Group Inc.’s 5% perpetual split-rated fixed-to-floating rate non-cumulative notes (Ba1/BB+/BBB-) have been ticking lower with the issue yielding around 10% on Tuesday after yielding nearly 12% in the prior week.

“There’s a call in November,” a source noted.

Finance of America Funding LLC’s 7 7/8% senior notes due 2025 (B3//B) were quiet over the day after softening about 1½ points in the prior week.

Finance of America’s issue also has a call date in November.

Otherwise, distressed activity “is getting slow right now,” a market source said.

Emerging markets issues from Credito Real SAB de CV and Unifin Financiera SAB de CV were among the most active distressed bonds traded on Tuesday, a source said.

The iShares iBoxx High Yield Corporate Bond ETF fell 19 cents to $82.70.

March and April oil prices rallied on continued concerns of a Russian invasion of Ukraine.

West Texas Intermediate crude oil benchmark futures for March deliveries settled up $1.28 to $92.35 a barrel.

PBF Energy Inc.’s senior notes were mixed with the 7¼% senior notes due 2025 (Caa1/B/B-) down 1 point in light trading.

Goldman perpetuals eyed

Goldman Sachs’ 5% series P fixed-to-floating rate perpetual notes (Ba1/BB+/BBB-) traded Tuesday at the 96 bid area and yielding around 10%, mostly unchanged from Friday.

“They’re down from a month ago – they were trading at 99½ to par,” a source said. “They dropped as low as 95¾ and are slowly bouncing back to 96¼.”

Goldman’s notes traded in the same session a week ago at the 95¼ bid area and yielding nearly 12%.

The New York-based banking, securities and investment management company issued $1.5 billion of the perpetual notes on Nov. 1, 2017 at par.

The notes pay a dividend of 5% until Nov. 10, 2022 and then convert to a rate of Libor plus 287.4 basis points thereafter.

Finance of America down

Finance of America Funding’s 7 7/8% senior notes due 2025 (B3//B) stayed quiet over Tuesday’s session after declining about 1¼ points in the prior week, a source said.

The notes were last seen on Friday at 93¾ bid and yielding almost 10%, down from the 98½ bid range in January.

Finance of America issued $350 million of the notes on Nov. 5, 2020 at 99 to yield 8.119%.

The notes are redeemable at par before Nov. 15, 2022 and at 103.938 on the first call date after Nov. 15, 2022.

Irving, Tex.-based lending and products services provider parent company Finance of America Cos. Inc. will release its fourth-quarter earnings results on March 2.

PBF bonds mixed

PBF’s paper was mixed by the end of the day, a source said.

The company’s 7¼% senior notes due 2025 (Caa1/B/B-) fell 1 point to 83½ bid on $1.8 million of paper traded.

The Parsippany, N.J.-based petroleum refiner’s 6% senior notes due 2028 (Caa1/B/B-), meanwhile, improved 1 1/8 points to 74 bid on $2 million of supply on Tuesday.

Distressed returns soft

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return ended the prior week soft.

The daily return was minus 0.18% on Friday, compared to minus 0.15% on Thursday, minus 0.28% on Wednesday, 0.39% on Tuesday and minus 0.43% at the start of the week.

Month-to-date total returns declined to minus 1.27% from minus 1.09% on Thursday, minus 0.94% on Wednesday, minus 0.67% on Tuesday and minus 1.06% in the Feb. 14 session.

Year-to-date returns dropped to minus 2.78% on Friday versus minus 2.61% on Thursday, minus 2.46% on Wednesday, minus 2.19% on Tuesday and minus 2.57% at the week’s start.

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