CNX drives-by; Citrix on tap; Newell adds to gains; NortonLifeLock improves; Royal Caribbean hits new heights

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 12 – The domestic high-yield primary market saw an active start to the week with one drive-by deal pricing and Citrix Systems Inc.’s highly anticipated LBO deal kicking off.

In drive-by action, CNX Resources Corp. priced a $500 million issue of senior notes due Jan. 15, 2031 (B1/BB/BB+).

And Picard Midco, Inc. kicked off a $4 billion offering of 6.5-year senior secured notes backing the buyout of Citrix Systems Inc. with the deal to officially launch via an investor’s conference call on Tuesday.

Meanwhile, it was another strong day in the secondary space with the cash bond market rising another ¼ to 3/8 point on the eve of the Consumer Price Index report’s Tuesday release.

There is widespread belief that the report will reflect a faster deceleration of inflation than predicted, which was adding more fuel to the market’s rally.

The new paper to price over the past week continued to put in a strong performance with Newell Brands Inc.’s two tranches of split-rated notes (Ba1/BBB-/BB+) adding to gains after a strong break and NortonLifeLock Inc.’s two tranches (B1/BB-/BB+) improved in active trading.

The investment-grade market proved there was demand for new paper, and the high-yield market is “testing the waters now,” a source said.

So far, the new deals have been successful and there remains plenty of cash on the sidelines to put to work, the source said.

After falling well below par in the recent market rout, Royal Caribbean Group’s recently priced 11 5/8% senior notes due 2027 (B3/B) broke out to fresh heights on Monday with the notes closing above a 102-handle.

Monday’s primary

CNX Resources priced a $500 million issue of senior notes due Jan. 15, 2031 (B1/BB/BB+) at par to yield 7 3/8% in a Monday drive-by.

The deal was going very well, a portfolio manager said on Monday afternoon.

The yield printed 12.5 basis points inside of the 7½% to 7¾% yield talk. Initial guidance was in the 7¾% area.

Also on Monday, Picard Midco, Inc. kicked off a $4 billion offering of 6.5-year senior secured notes backing the buyout of Citrix Systems by Vista Equity Partners and Evergreen Coast Capital Corp.

The deal, which had been sidelined for weeks owing to market conditions, is set to officially launch on an investor call set for 10:30 a.m. on Tuesday, and is scheduled to price on Monday, Sept. 19.

Early whisper is in the high 8%.

Newell gains

Newell Brands’ two tranches of senior notes added to gains on Monday after a strong break.

The 6 5/8% senior notes due 2029 and 6 3/8% senior notes due 2027 were trading at roughly the same levels with both tranches gaining about 1 point during Monday’s session.

The 6 5/8% senior notes were changing hands in the 101¾ to 102 context heading into the market close, a source said.

The 6 3/8% notes were changing hands in the 101 5/8 to 101 7/8 context, a source said.

Each tranche saw $30 million in reported volume.

The notes played to heavy demand during bookbuilding and saw a strong break despite pricing tight with both tranches closing last Friday in the par ½ to par 5/8 context.

Newell priced a $500 million tranche of the 6 3/8% notes at par.

Pricing came at the tight end of the 6 3/8% to 6 5/8% yield talk.

The deal also included a $500 million tranche of the 6 5/8% notes which priced at par.

The yield printed at the tight end of the 6 5/8% to 6 7/8% yield talk.

NortonLifeLock improves

After a lackluster start in the secondary space, NortonLifeLock’s two tranches of senior notes improved in active trading.

NortonLifeLock’s 6¾% senior notes due September 2027 gained ¼ point to trade in the par 1/8 to par 3/8 context during Monday’s session, a source said.

The 7 1/8% senior notes due September 2030 were also up ¼ point to trade in the par ¼ to par ½ context.

The notes played to heavy demand during bookbuilding but fell flat in the secondary space with both tranches closing last Friday wrapped around par.

The tight pricing of the notes left little room for movement in the secondary space, a source said.

Royal Caribbean’s new heights

Royal Caribbean’s 11 5/8% senior notes due 2027 broke out to new heights on Monday less than one week after hitting an all-time low.

The 11 5/8% notes shot up another ½ point to break above 102 in active trading on Monday.

The notes stood poised to close the day at 102 3/8 with the yield falling to 10 7/8%, a source said.

There was $14 million in reported volume.

The 11 5/8% notes, which priced at par, traded as high as 102 after breaking for trade on Aug. 15.

However, the notes sank as low as a 97¼ in the market rout sparked by Federal Reserve chair Jerome Powell’s Jackson Hole speech.

They were wrapped around 98 last Monday.

However, the notes erased their losses in three sessions and closed last Friday on a 101-handle, which was their trading level before selling pressure dragged down the notes.

Friday inflows

The dedicated high-yield bond funds saw $1.091 of net inflows on Friday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $987 million of inflows on the day.

Actively managed high-yield funds saw $104 million of inflows on Friday, the source said.

The combined funds are tracking $1.49 billion of net inflows for the week that will conclude with Wednesday's close, according to the market source.

Indexes

The KDP High Yield Daily index rose 4 points to close Monday at 54.70 with the yield now 6.99%.

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

The ICE BofAML US High Yield index climbed 26.3 bps with the year-to-date return now negative 9.713%.

The index posted a cumulative gain of 122.3 bps on the week last week.

The CDX High Yield 30 index gained 34 bps to close Monday at 101.46.

The index jumped 296 bps on the week last week.

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