Junk primary market quiet; Carnival notes higher on revenue jump; Icahn notes improve

By Cristal Cody and Paul A. Harris

Tupelo, Miss., Dec. 21 – The high-yield new issue market remained inactive on Thursday, as expected.

With the approach of the year-end holidays, primary market activity for 2023 has now almost certainly run its course, sources said.

In late-year news on market technicals, the dedicated high-yield bond funds saw $1.07 billion of net inflow during the week to Wednesday’s close, as reported by fund-tracker Refinitiv Lipper, a market source said.

“The market is better,” a source said Thursday following Wednesday’s drop. “The CDX was up. The HYG was up.”

Stock indexes mostly recovered from Wednesday’s slide.

The iShares iBoxx High Yield Corporate Bond ETF added 35 cents, or 0.45%, to $77.56.

“It was a little bit quieter today than usual,” a trader said. “The market is firm and strong, but the volume today was not that big.”

Secondary interest in Carnival Corp.’s junk paper climbed Thursday after the company reported strong fourth-quarter and 2023 revenue.

New issues also were moving higher over the session.

The Icahn Enterprises LP and Icahn Enterprises Finance Corp. 9¾% senior bullet notes due Jan. 15, 2029 (Ba3/BB) rose 1/8 point and were trading with a 101 handle.

Carnival edges higher

Carnival’s 6% notes due May 1, 2029 (B3/B) led the day’s trading volume in the high-yield market on more than $23 million of notes changing hands, a source said.

The bonds rose 5/8 point to 96 5/8 by the close.

Carnival’s 10½% notes due June 1, 2030 (B3/B) also were changing hands Thursday nearly ½ point better at 109 5/8 on $8 million of trading.

Carnival reported that fourth-quarter revenue was a record $5.4 billion, while revenue for the full year hit an all-time high of $21.6 billion.

The cruise line operator said in its 2024 outlook that it expects an adjusted EBITDA of around $5.6 billion, up more than 30% from 2023.

Icahn improves

Icahn’s 9¾% senior notes due Jan. 15, 2029 (Ba3/BB) rose 1/8 point to 101 5/8 Thursday on $9 million of volume, a source reported.

The company sold $200 million of the notes in a reopening on Dec. 15 at 100.625. Icahn first priced $500 million of the notes on Dec. 12 at par.

Indexes

The KDP High Yield Daily index rose slightly to 50.84 with a yield of 6.72% on Thursday versus 50.82 and a yield of 6.72% on Wednesday, 50.69 with a 6.78% yield on Tuesday and 50.56 with a yield of 6.84% on Monday.

The index added 109 basis points in the prior week.

The CDX High Yield 30 index climbed 67 bps to 105.86 on Thursday.

The index declined 37 bps on Wednesday, added 17 bps on Tuesday and increased 1 bp on Monday.

The index posted a cumulative gain of 144 bps in the prior week.

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