Junk bond shadow calendar eyed; Ford flat; Coinbase under pressure

By Paul A. Harris and Abigail W. Adams

Portland, Me., June 6 – Nothing happened in front of the cameras in the high-yield primary market on Tuesday.

However, there was a substantial amount of behind-the-scenes scuttlebutt suggesting that the new issue pace will pick up sooner rather than later with megadeals from HUB International Ltd. and Univar Solutions Inc. expected in addition to a $570 million offering from Fortrea.

Meanwhile, it was another sideways day in the secondary space with the cash bond market either side of unchanged.

However, the market closed with a firm tone with the CDX index eliminating a ¼ point drop early in the session to close with a ¼ point gain, a source said.

New paper and topical news were the drivers of activity in the space as the market awaited the deals in the pipeline.

Ford Motor Credit Co. LLC’s newly priced tranches (Ba2/BB+/BB+) dominated activity in the secondary space albeit with little movement in price with the notes holding the nominal gains made on the break.

Coinbase Global, Inc.'s two tranches of senior notes (B1/BB-) led losses on Tuesday after the Securities and Exchange Commission filed a lawsuit against the crypto-exchange in an acceleration of its crackdown on crypto companies.

Shadow calendar

In upcoming new issuance, expected soon, initial guidance has $2.675 billion of HUB International secured notes coming to yield in the mid-7% area, according to market sources.

The offer, which will be led by Morgan Stanley & Co. LLC, is expected to kick off on Wednesday, a bond trader said.

Fortrea is expected to launch a $570 million offering of senior secured notes (BB) during the present week.

Initial guidance has that deal coming to yield in the high-7% to 8% area, sources say.

Barclays will be the lead.

Also penciled in for a possible June 5 week execution is a $2 billion offering of senior secured notes backing Apollo’s buyout of Univar Solutions.

Univar shareholders voted to approve that buyout in a special meeting on Tuesday.

Closing is expected in the second half of this year.

Ford flat

Ford’s newly priced tranches were flat in heavy volume on Tuesday with the notes holding on to the nominal gains made on the break.

Ford’s 6.95% senior notes due 2026 were changing hands in a tight range between par 1/8 and par 3/8 heading into the close, a source said.

There was $74 million in reported volume.

Ford’s 7.2% senior notes due 2030 were putting in a slightly stronger performance with the notes trading in the par ¼ to par 3/8 context.

There was $162 million in reported volume.

Ford priced a $900 million tranche of the 6.95% notes and an $850 million tranche of the 7.2% notes at par in a Monday drive-by.

Both tranches priced on top of talk.

Ford’s new deal sparked some weakness in its debt stack with the notes coming slightly wide to comparable issues.

Ford’s outstanding issues largely trade with a 6¾% to 7% yield, a source said.

Coinbase under pressure

Coinbase’s two tranches of senior notes led losses in the secondary space on Tuesday with the notes falling 3 to 4 points after the SEC filed suit against the company.

The crypto-exchange’s 3 3/8% senior notes due 2028 sank 4 points.

They traded to a low of 57 early in the session but pared their losses to trade in the 59 to 60 context heading into the close, a source said.

The yield was about 14 3/8%.

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