Morning Commentary: Maxar bonds rocket on Advent acquisition news; junk resumes slide

By Paul A. Harris

Portland, Ore., Dec. 16 – The bonds of satellite technology company Maxar Technologies Inc. rocketed 10-plus points on news that it will be taken private by Advent International in an all-cash transaction valued at $6.4 billion, a sellside source said on Friday.

The Maxar Technologies 7¾% senior secured notes due June 2027 were 103¼ bid, 103½ offered at mid-morning on Friday, the sellsider said, adding that they traded in the context of 93 on Thursday.

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Away from headline news, the high-yield bond market was ¼ point lower on Friday morning, sources said.

With the S&P 500 stock index down 0.47% at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was down 0.27%, or 20 cents, at $74.80.

Bonds priced just over a week ago by Chart Industries, Inc. continued to slip on Friday morning, the sellsider said.

The Chart Industries 7½% senior secured notes due January 2030 (Ba3/B+) were par bid, par ½ offered.

They changed hands Thursday at par ¾.

The Chart Industries 9½% senior unsecured notes due January 2031 (B3/B) were 101 bid, 101½ offered on Friday morning.

They were 101¾ bid on Thursday and had changed hands on Wednesday at 103.

Despite their slippage during the market sell-off that got underway on Thursday and continued on Friday morning, both bonds continue to trade at significant premiums to their new issue prices.

The 7½% secured notes priced at 98.661 to yield 7¾% in a $1.46 billion tranche on Dec. 8.

The 9½% unsecured notes priced at 97.949 to yield 9 7/8% in a $510 million tranche, also on Dec. 8.

There was no news in the primary market on Friday morning, with sources saying that new issuance for 2022 may have run its course.

However, the primary market could reopen in the week ahead, a syndicate banker said – perhaps to accommodate a one-off transaction such as an add-on deal supported by strong reverse inquiry.

Outflows

The dedicated high yield bond funds sustained $965 million of net daily cash outflows on Thursday, according to a market source.

High-yield ETFs saw $825 million of outflows on the day.

Actively managed high-yield funds saw $160 million of outflows on Thursday, the source said.

News of Thursday’s daily flows follows a Thursday report that the combined funds sustained $313 million of net outflows during the week that ended with the Wednesday, Dec. 14 close, according to Refinitiv Lipper.

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