Junk calendar carries over; Icahn paper down about 5 points on week; Solenis mostly flat

By Paul A. Harris and Cristal Cody

Portland, Ore., May 26 – The high-yield primary market remained idle, as expected, on Friday ahead of the extended Memorial Day holiday weekend in the United States, sources said.

Throughout the past week the new issue market has been underwhelming, a bond trader remarked, adding that four of the five most recent new issues were trading below their issue prices.

The only two deals on the active forward calendar will be carried over into the post-Memorial Day week, sources say.

Document changes surfaced Friday morning on the Mobius Merger Sub, Inc. $400 million offering of seven-year senior secured notes (B2/B/B+) backing the buyout of MoneyGram International Inc. by Madison Dearborn Partners, the trader said.

There were no updates on pricing, the source noted.

The deal has been guided at 10½% to 11%.

Meanwhile jailhouse telecom Aventiv Technologies LLC, which has drawn an exceptionally long stretch in the primary market, continues its attempt to place $400 million of four-year first-lien senior secured notes (B3/B).

That bond sale has now run for virtually the entire month of May.

As to the holiday-abbreviated week beginning Tuesday, May 30, there could be one or two deals in addition to the above-mentioned offerings from MoneyGram and Aventiv, the trader said, but added that the month of May, which had $18 billion to $19 billion of new high-yield issues, was bigger than had been anticipated.

The euro-denominated high-yield new issue market could generate as many as five new deals in the week ahead, according to a market source there.

Secondary

Icahn Enterprises LP took most of the day’s light junk trading focus with the company’s senior notes (Ba3/BB) staying mostly flat on the day and down on the week.

“They’re basically unchanged from yesterday,” a source said.

In new issues, Olympus Water US Holding Corp.’s (Solenis) 9¾% senior secured notes due 2028 were little changed in exceedingly thin junk secondary action Friday but remained weaker than issuance.

“One trade today,” a source reported in the issue.

Icahn down on week

Icahn Enterprises’ 6¼% senior notes due 2026 were the company’s most active issue moving over the session, a source said.

The notes closed the day flat from Thursday at 84¼ bid, 85¼ offered.

The issue traded Monday at 89½ bid, 90½ offered.

Icahn’s bonds traded at 98 back in early May before Hindenburg Research released its short-seller report that levied several allegations against the company.

The paper declined further during the current week after Icahn rival Bill Ackman on Wednesday tweeted his take on the report, along with a few digs at Icahn.

Solenis little changed

Solenis’ 9¾% senior secured notes due 2028 went out Friday mostly flat at 99¼ bid, 99½ offered, a market source said.

The issue was seen closing Thursday at the same 99¼ bid, 99½ offered.

The bonds have struggled in the secondary market since pricing on Wednesday.

Solenis sold $1.7 billion of the notes at par as part of a two-tranche $2.375 billion equivalent offering brought to finance its acquisition of Diversey Holdings Ltd.

Fund flows

High-yield ETFs sustained notable daily cash outflows of $444 million on Thursday, according to a market source.

Actively managed high-yield funds saw $57 million of inflows on the day, the source added.

News of Thursday’s daily flows follows a Thursday afternoon report that the combined high-yield funds saw $1.399 billion of net inflows for the week to the Wednesday, May 24 close, according to fund-tracker Refinitiv Lipper.

Indexes

The KDP High Yield Daily was unchanged Friday after declining 6 points Thursday to a new 52-week low of 49.98 with the yield 7.59%.

The index has a 52-week high of 58.27 and a 52-week low of 49.98.

The index dropped 24 points on Wednesday and 7 points on Tuesday after adding 4 points on Monday.

The CDX High Yield 30 index climbed 56 bps Friday to 100.96.

The index rose 40 bps on Thursday after declining 30 bps on Wednesday and 28 bps on Tuesday following gains of 49 bps on Monday.

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