Forward Air, NCR take dips; Vital Energy gains; new-issue market quiet

By Cristal Cody and Paul A. Harris

The celebration of the Yom Kippur holy day all but silenced the dollar-denominated new-issue market in junkbondland on Monday, sources said.

The active new-issue calendar finished the session empty, as it began it.

With the dollar junk primary quiet Monday after four deals hit the tape Friday, issues traded mostly better in the secondary market over the session.

Forward Air Corp.’s 9½% senior secured notes due 2031 priced on Friday were “up a couple of points” by the close, a source said.

The bonds were among the day’s top junk movers on nearly $44 million of paper traded.

The new 9½% senior secured notes due 2029 that NCR Atleos Escrow Corp. priced on Friday were at the top of the secondary stack Monday on over $52 million of reported volume.

The bonds were trading “a little below new issue,” a source said.

New issues priced in the prior week also were holding strong Monday.

Vital Energy, Inc.’s $900 million two-part offering of senior notes (B3/B) on Sept. 18 has been among the strongest performers.

“Both issues are trading up,” a source said.

Vital Energy’s deal included a $400 million tap of its 10 1/8% notes due 2028 and $500 million of new 9¾% notes due 2030 that priced at a deep discount, the source said.

The 9¾% notes traded Monday over 2 points better than issuance.

Stocks indexes were up across the board Monday by the close.

The S&P 500 rose 0.4%, while the iShares iBoxx High Yield Corporate Bond ETF fell 10 cents, or 0.14%, to $73.90.

Though the junk market saw positive traction with the new issuance and some small positive cash flows last week, the move higher in Treasuries is “going to put a hurting on spreads, but I would anticipate with oil trading where it is and potentially moving higher, we will continue to see strength and more issuance in some of the energy sector,” a source reported.

Forward Air up

Forward Air’s new 9½% senior secured notes due 2031 (Ba3/BB-/BB) traded around par going out Monday, a source said.

The bonds were among the day’s top junk movers on $43.5 million of secondary volume.

Forward Air priced a downsized $725 million of the notes on Friday at 98 to yield 9.865%.

“That was a well-played deal,” the source said.

The coupon came in the middle of coupon talk in the 9½% area. The issue price came on top of price talk, while the yield was in line with talk in the 9 7/8% area.

The notes will be issued via GN Bondco, LLC, which is to be merged with and into Clue Opco LLC.

The $200 million downsize amount was shifted to a concurrent term loan, which increased to $1.125 billion from $925 million

NCR trades heavily

NCR Atleos Escrow’s 9½% senior secured notes due 2029 (B2/B+/BB-) went out at 98 3/8, down less than 1/8 point but in heavy trading that totaled $52.8 million, a source said.

The company on Friday priced an upsized and restructured $1.35 billion of the notes at 98¾ to yield 9.798%.

The yield printed slightly wide to yield talk in the 9½% area.

The $300 million upsize of the bonds represents a shift of proceeds from the concurrent term loan, which was downsized to $750 million from $1.05 billion.

Vital Energy up

In other recent issues, Vital Energy’s 9¾% notes due 2029 traded Monday at a healthy 101, a source said.

The company sold $500 million of the notes at 98.742 to yield 10% a week ago on Sept. 18.

The yield printed at the tight end of the 10% to 10 1/8% yield talk, revised from the 10¼% area.

Indexes

The KDP High Yield Daily index closed Monday at 49.69 and a 7.82% yield, compared to 49.81 with the yield 7.76% on Friday.

The index posted a cumulative loss of 43 bps last week.

The CDX High Yield 30 index went out at 101.98, down from 102.05 on Friday.

The CDX index posted a cumulative loss of 82 bps over the prior week.

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