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Morning Commentary: Raising Cane’s $500 million notes on deck; Navient’s 11½% paper up
By Paul A. Harris
Portland, Ore., Nov. 1 – An oversubscribed $500 million offering of Raising Cane’s Restaurants LLC long five-year senior notes (B3/B/BB-) is on deck to price on Wednesday, market sources say.
The debt refinancing deal, which is talked to yield in the 9½% area, is heard to be playing to $2 billion of orders, according to a bond trader in New York.
Meantime, bonds priced earlier in the week at a slight discount by Navient Corp., the 11½% senior notes due March 2031 (Ba3/B+/BB-), were par ¼ bid, par ¾ offered on Wednesday morning, changing hands at par 5/8, the trader said.
The $500 million issue priced at 99.81 to yield 11½% on Monday.
The Cetera Financial Group Inc./Aretec Escrow Issuer 2 Inc. 10% senior secured notes due Aug. 15, 2030 (B2/B) traded Wednesday at 101 3/8, up ¼ of a point, the trader said.
The $700 million issue priced at par last Thursday.
Away from recent issues, news that Lumen Technologies, Inc. entered into a transaction support agreement with a select group of creditors representing $7 billion of its outstanding debt pushed Lumen’s paper higher, the trader said.
The Lumen Technologies 5 5/8% senior notes, series X, due 2025 were 89 bid on Wednesday, up from 79 bid on Tuesday, the source said.
Bonds of Lumen unit Level 3 Communications declined sharply on the news, said the trader, who was marking Level 3 paper 5 points to 10 points lower.
The broad high-yield market was ¼ of a point higher and “definitely bid” in the Wednesday mid-morning after opening the session slightly weaker, the trader said.
With the S&P 500 stock index up 0.54% and the yield on 10-year government paper in retreat, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was up 0.45%, or 33 cents, at $72.51.
Fund flows
High-yield ETFs saw $329 million of daily cash inflows on Tuesday, according to a market source.
Actively managed high-yield funds, meanwhile, sustained $58 million of outflows on Tuesday, the source said.
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