Morning Commentary: Husky Injection bonds, loans fall on numbers; oil, energy names up

By Paul A. Harris

Portland, Ore., Aug. 21 – The bonds and loans of Husky Injection Molding Systems Ltd. fell on Tuesday as the privately held Vermont-based supplier of injection mold machinery reported some disappointing numbers, a bond trader said.

The company’s term loans were down 5 points.

The Titan Acquisition Ltd./Titan Co-Borrower, LLC (Husky Injection Molding Systems Ltd.) 7¾% senior notes due April 2026 were down 5 to 6 points, the trader said, recounting that they closed at 91 on Monday and had been trading at par in the spring.

Headline news was also impacting the junk bonds of Coty Inc., the trader said, adding that the New York City-based beauty company’s bonds were ¼ point to ½ point lower after it reported that its chief financial officer Patrice de Talhouet is leaving the company to pursue other opportunities.

The company also reported financial numbers on Tuesday which, although not terrible, were underwhelming, the trader said.

Distressed energy names were rallying Tuesday morning on the back of better oil prices.

California Resources Corp.’s 8% senior secured second-lien notes due December 2022 were up 1 3/8 points at mid-morning.

The bonds of Sanchez Energy Corp. were up 1¼ points.

The barrel price of West Texas Intermediate Crude for September 2018 delivery was up 91 cents, or 1.37%, at $67.34.

Recent issues were trading at premiums to new issue prices in the secondary market.

The Herbalife Nutrition Ltd. 7¼% senior notes due August 2026 were unchanged at 101 bid.

The $400 million issue priced at par on Aug. 9.

Like other recent issues it traded actively during the first couple of days it was in the secondary market, then appeared to go into hiding, the trader remarked.

The notably leveraged Verscend Holding Corp. 9¾% senior notes due August 2026 (Caa2) were 102¾ bid, 103 offered on Tuesday.

The downsized $1.1 billion issue (from $1.15 billion), backing Verscend’s acquisition of Cotiviti Holdings, Inc., priced at par on Aug. 10.

Quiet primary

Save for a couple of smaller Nordic deals announced in recent days, the new issue market remained dormant on Tuesday, as the Dog Days of August play out ahead of the extended Labor Day holiday weekend, which gets underway following the Aug. 31 close.

Announcements of major currency deals are unlikely in the run-up to Labor Day, they add.

Teekay LNG Partners LP was scheduled to participate in a conference call with fixed income investors on Tuesday ahead of a contemplated Norwegian krone-denominated offering of five-year senior unsecured bonds.

Global coordinators DNB Markets and Nordea and joint bookrunners Danske Bank and Swedbank have the mandate for the Rule 144A and Regulation S transaction.

Also, Iceland-based low-cost air carrier WOW Air is seeking to place three-year senior secured floating-rate notes, expected to come in euro-denominated bonds or Swedish krona-denominated bonds, via Pareto Securities.

Mixed Monday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Monday, a trader said.

High-yield ETFs saw $184 million of inflows on the day.

However, actively managed high-yield funds sustained $53 million of outflows on Monday, the trader said.

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