Morning Commentary: Chemours bonds dive on suspect accounting reports; Delek above par

By Paul A. Harris

Portland, Ore., Feb. 29 – News that the scope of accounting irregularities at Chemours may be widening triggered a 4- to 5-point plunge in the Del.-based chemical company’s bonds on Thursday, according to a bond trader in New York.

The Chemours Co. 4 5/8% senior notes due November 2029 were 83¼ bid at mid-morning, down as much as 5 points, the trader said.

The company’s share price (NYSE: CC) was down more than 37% on the morning.

In a Thursday press release, the company said it is evaluating one or more potential material weaknesses in its internal control over financial reporting as of Dec. 31, 2023.

The evaluation follows the board’s decision to place Chemours’ chief executive officer, its chief financial officer and its principal accounting officer all on administrative leave.

Elsewhere on Thursday, the bonds of Everi Holdings, Inc. traded sharply higher on news of a merger between Everi and International Game Technology plc’s Global Gaming and PlayDigital businesses, in a deal that values the combined businesses at roughly $6.2 billion on an enterprise value basis.

The Everi Holdings 5% senior notes due July 2029 changed hands Thursday morning at 99 3/8, in super active trading, according to the bond trader, who added that the paper was trading in the low-to-mid 90s prior to the merger news.

Among recent issues the Delek Logistics Partners, LP/Delek Logistics Finance Corp. 8 5/8% senior notes due March 2029 (B3/BB-/BB-) were just above issue price on Thursday morning, at par bid, par ¼ offered, slightly off the morning’s highs.

The upsized $650 million issue (from $550 million) came at par in a Wednesday drive-by.

Meanwhile, the Builders FirstSource, Inc. 6 3/8% senior notes due March 2034 (Ba2/BB-) continue to lag issue price on Thursday morning, the trader said, marking them 99 5/8 bid, 99 7/8 offered.

The massively upsized $1 billion issue (from $600 million) priced at par on Monday.

Not only did Builders price its deal on the screws, it priced through the screws, the trader remarked, adding that at the present trading levels the bonds are still rich to the index.

The dollar-denominated new issue market sat idle on Thursday morning, with just one deal in the market.

Clear Channel Outdoor Holdings, Inc. is marketing $865 million of six-year senior secured notes (B1/B) with initial guidance of 8¼% to 8½%.

The deal is heard to be playing to $1.6 billion of demand and is expected remain in the market into the week ahead.

Demand for the $425 million term loan has yet to build to deal-size, although loan commitments are not due until Monday, the trader said.

Yet, it’s possible the bonds will upsize and the loan downsize, the source added.

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