Junk market brings $2 billion from trio of issuers; Spirit Airlines crashes; Carrols jumps

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 16 – Dealers sprang into action on the heels of the holiday weekend, generating a hefty news volume in the high-yield primary market.

A trio of drive-by issuers, each bringing a single tranche of junk, priced a $2 billion face amount.

Meanwhile, the secondary space was soft on Tuesday with the cash bond market off ¼ point as Treasury yields rose following hawkish comments from Federal Reserve officials that tempered rate-cut expectations, a source said.

However, it was topical news that was moving the market on Tuesday with several issues undergoing outsized moves in heavy volume, both to the upside and downside.

Spirit Airlines Inc.’s 8% senior secured notes due 2025 (B2) suffered heavy losses after a federal judge blocked JetBlue Airways Corp.’s acquisition of the company, which took the market by surprise.

While Spirit Airlines’ senior notes crashed and burned on the failed merger, Carrols Restaurant Group Inc.’s 5 7/8% senior notes due 2029 (Caa1/CCC) soared after Restaurant Brands International Inc. announced it would acquire the company in a $1 billion cash transaction.

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