Enova, Credit Acceptance, Crescent price; XPO on HY deck; Kinetik flat; NextEra, Hannon up

By Abigail W. Adams

Portland, Me., Dec. 5 – The domestic high-yield bond primary market had another active session with three deals pricing – two of which came on accelerated timelines.

Credit Acceptance Corp. priced an upsized $600 million of five-year senior notes (Ba3/BB), Enova International Inc. priced $400 million of five-year senior notes (B2/B-), and Crescent Energy Co. priced a $150 million add-on to Crescent Energy Finance LLC’s 9¼% senior notes due Feb. 15, 2028 (B1/BB-/BB-).

The forward calendar also continued to grow with XPO Inc. planning to price a $585 million offering of eight-year senior notes (Ba3/BB-/BB+) before the end of the week.

The deals continued to play to strong demand with timing for Credit Acceptance and Enova accelerated.

Recent deals also continued to put in strong performances in the secondary space.

While a low open, the cash bond market quickly bounced back and closed the day with an 1/8 to ¼ point gain, sources said.

HAT Holdings I LLC and HAT Holdings II LLC’s new 8% green senior notes due 2027 (Baa3/BB+/BB+) and NextEra Energy Operating Partners, LP’s new 7¼% senior notes due 2029 (Ba1/BB/BB+) continued to add after strong breaks.

However, Kinetik Holdings LP’s 6 5/8% sustainability-linked notes due 2028 (Ba1/BB+/BB+) were unchanged on the day with the notes still wrapped around their issue price.

Enova prices

Enova International priced $400 million of five-year senior notes (B2/B-) on Tuesday at 99.058 with a coupon of 11¼% to yield 11½%, according to a market source.

Pricing came in line with talk for 1 point of original issue discount with an all-in yield in the 11½% area.

Early guidance was for a yield in the mid-11% area and an OID.

The deal priced on an accelerated timeline with the offering initially slated to remain in the market until Wednesday.

However, the deal was oversubscribed early Tuesday with $500 million heard to be in the books.

Credit Acceptance upsizes

Credit Acceptance priced an upsized $600 million of five-year senior notes (Ba3/BB) on Tuesday at par to yield 9¼%, according to a market source.

Pricing came at the tight end of talk for a yield of 9¼% to 9½%. Early guidance was for a yield in the high 9% area.

Timing for the deal was accelerated with pricing initially expected on Wednesday. The initial size of the offering was $500 million.

Crescent adds again

Crescent Energy priced a $150 million add-on to its 9¼% senior notes due Feb. 15, 2028 (B1/BB-/BB-) at 102.125 to yield 8.467% in a Tuesday drive-by, according to a market source.

Price talk was for a reoffer price in the 102 area. Early guidance was for a reoffer price in the high 101 area.

The capital raise was the company’s fourth pass at the junk bond market in 2023.

The company initially priced a $400 million issue of the 9¼% notes at par in January.

It priced a $300 million add-on at 98 to yield 9.799% in July and a $150 million add-on at 101.125 to yield 8.858% in September.

At a premium

HAT Holdings’ (Hannon Armstrong) new 8% green senior notes due 2027 continued to add in heavy volume after a strong break the previous session.

The notes were up about ¼ point as the market rallied back from its low open, a source said.

They were marked at par 3/8 bid, par 5/8 offered and were wrapped around par ½ heading into the market close, sources said.

There was $95 million in reported volume.

Hannon priced an upsized $550 million, from $500 million, issue of the 8% notes at par on Monday.

Pricing came at the tight end of talk for a yield of 8% to 8¼%.

NextEra Energy’s 7¼% senior notes due 2029 also edged higher on Tuesday after a strong break.

The notes gained ¼ point to trade in the par ½ to par ¾ context, a source said.

There was $42 million in reported volume.

NextEra priced a $750 million issue of the 7¼% notes at par on Monday.

Pricing came at the tight end of talk for a yield of 7¼% to 7½%.

Flat

Kinetik’s 6 5/8% sustainability-linked notes due 2028 were unchanged on Tuesday with the notes wrapped around their issue price.

The 6 5/8% notes were stuck in a tight range of 99 7/8 to par 1/8 after a flat break, sources said.

“They’re right where they left off,” a source said.

Kinetik priced a $500 million issue of the 6 5/8% notes at par in a Monday drive-by.

Pricing came toward the rich end of talk for a yield in the 6¾% area.

Indexes

The KDP High Yield Daily index gained 7 basis points to close Tuesday at 49.62 with the yield 7.25%.

The index was flat on Monday.

The ICE BofAML US High Yield index rose 24.1 bps with year-to-date returns now 10.103%.

The index was up 6.5 bps on Monday.

The CDX High Yield 30 index was off 15 bps to close Tuesday at 103.87.

The index shaved off 15 bps on Monday.

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