Primary quiet; Frontier improves; Coinbase weakens; Twitter decline continues

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 16 – The high-yield primary remained quiet on Monday.

The most recent new-issue news came Friday in Europe where there was an €850 million two-part placement of senior secured notes due May 2029 (Ba3//BB) that came in support of the capitalization of Spanish soccer organization La Liga (Loarre Investments Sarl) by CVC Capital Partners.

The most recent dollar deal came a week ago when Frontier Communications Holdings, LLC priced $1.2 billion, the only deal to clear the new-issue market in over two weeks.

Meanwhile, it was also a relatively quiet session in the secondary space with the market flat after hitting fresh lows the previous week.

Frontier Communications Holdings, LLC’s 8¾% first-lien secured notes due 2030 (B3/B/BB+) improved in high-volume activity with the notes returning to their previous levels after growing soft in the market volatility of the previous week.

Coinbase Global, Inc.'s senior notes (Ba1/BB+) were again weaker after staging a remarkable rebound during Friday’s session.

Twitter, Inc.’s senior notes (Ba2/BB+) continued to slide as the prospects for an Elon Musk takeover grow increasingly dim.

Frontier improves

Frontier’s 8¾% first-lien secured notes due 2030 improved in high-volume activity on Monday after losing steam amid the heavy market conditions the previous week.

The 8¾% notes reclaimed their previous level and were changing hands in the 101¾ to 102¼ context heading into the market close, according to a market source.

There was $19 million in reported volume.

The 8¾% notes have been major winners in the secondary space since the $1.2 billion issue, which priced at par, broke for trade on May 9.

The notes traded as high as 103 their initial days in the market.

However, they closed the previous week on a 101-handle as heavy market conditions took their toll.

The notes priced cheap to the B index, which has a yield just shy of 8%, and to Frontier’s outstanding issues, sources said.

Coinbase softer

Coinbase’s senior notes were softer on Monday after staging a spectacular rebound during Friday’s session.

The crypto-currency exchange’s 3 3/8% senior notes due 2028 fell more than 1 point on Monday.

They were changing hands in the 68 5/8 to 69¼ context heading into the market close. The yield on the notes again shot above 10%.

There was $8 million in reported volume.

Coinbase’s 3 5/8% senior notes due 2031 were also down about 1 point. The notes were changing hands in the 65 3/8 to 65 5/8 context in the late afternoon, according to a market source.

The yield on the notes was about 9.25%.

There was $11 million in reported volume.

Coinbase’s 3 3/8% notes and 3 5/8% notes gained 7 and 5 points respectively on Friday after both sank about 15 points after the company’s earnings report May 10.

Coinbase’s capital structure was again under pressure as Bitcoin resumed its decline on Monday.

Bitcoin was changing hands at $30,024.30, a decrease of 4.02%, shortly before 6 p.m. ET.

Twitter slide

Twitter’s capital structure continued to slide on Monday as prospects dim for Elon Musk’s takeover of the company.

Twitter’s 5% senior notes due 2030 fell 1½ points to close Monday at 97.

The notes were again approaching all-time lows after giving back all gains made since Musk’s takeover saga began.

The notes traded down to a 96-handle in mid-March, their lowest level since the $1 billion issue priced at par on February 23, but were lifted by Musk’s takeover attempt.

The 5% notes traded up to 104 in late April following news Twitter had agreed to Musk’s takeover proposal.

However, the notes have been on a downtrend as questions mounted over Musk’s $21 billion equity commitment to be used to partially fund the $44 billion takeover proposal.

The notes’ losses gained steam after Musk announced the deal was on hold last Friday.

There is speculation he will try to renegotiate for a lower price.

Indexes

The KDP High Yield Daily index slid 2 points to close Monday at 57.18 with the yield now 6.78%.

The index posted a cumulative loss of 62 points on the week last week.

The ICE BofAML US High Yield index slid 2.8 basis points with the year-to-date return now negative 10.205%.

The index posted a cumulative loss of 92.7 bps on the week last week.

The CDX High Yield 30 index fell 34 bps to close Monday at 100.31.

The index posted a cumulative loss of 18 bps on the week last week.

ETFs see $476 million Friday inflows

High-yield ETFs saw $476 million of daily cash inflows on Friday, the most recent session for which data was available at press time, according to a market source.

However actively managed high-yield funds sustained $313 million of outflows on that day.

The combined funds have seen $33.8 billion of year-to-date net outflows to Friday's close, the market source said.

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