Aston Martin starts junk roadshow; Xerox returns gains; Rithm struggles continue

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 11 – The dollar-denominated primary market failed to generate any new issuance as the March 11 week got underway, but there was news.

Aston Martin Lagonda Global Holdings plc began officially marketing a £1.14 billion equivalent two-part offering of five-year senior secured notes (B3/B-/B) with pricing expected Wednesday.

Meanwhile, it was a quiet and flat day in the secondary space with all eyes on the Consumer Price Index report set for release early Tuesday.

The January CPI report rattled markets with the hotter-than-expected print calling into question rate-cut expectations.

However, the macro data released since then and confirmation from Federal Resrve officials that rate cuts are coming has been encouraging, a source said.

The market has wiped out all losses from the selling sparked by the previous CPI report with returns now at their highest of the year.

With the pipeline calming and few making moves ahead of the CPI report, activity in the space was muted with few notable price movements.

Recent deals remained the driver of trading activity with several softer during Monday’s session.

Xerox Holdings Corp.’s recently priced 8 7/8% senior guaranteed notes due 2029 (B1/BB) continued to fade in aftermarket activity with the notes giving back much of their gains after a strong break.

Rithm Capital Corp.’s 8% senior notes due 2029 (B3/B-) continued to struggle with the notes falling further below their discounted issue price.

Road trip

In the primary market, there was news on Aston Martin’s expected multicurrency deal which was starting to generate buzz on Friday.

Strong demand for the dollar-denominated notes enabled the British carmaker to tighten early guidance on that tranche to a range of 10% to 10½%, down from the 10½% to 11% initial guidance heard Monday morning, according to a trader in New York.

At a targeted size of $900 million the dollar-denominated notes are fully spoken for in reverse inquiry, the source added.

The deal also features a £300 million minimum tranche.

The roadshow runs through Tuesday, and pricing is expected Wednesday.

Elsewhere in the sterling-denominated new issue market Heathrow Finance plc began marketing a £350 million offering of seven-year senior secured bullet notes (B1//BB+), in the market with initial talk in the 7% area.

Books close Tuesday morning, London time.

Away from Aston Martin’s dollar-denominated tranche the trader expects $5 billion to $7 billion of high-yield new issue this week.

Xerox fades

Xerox’s 8 7/8% senior guaranteed notes due 2029 continued to fade in the aftermarket with the notes giving back nearly all gains in active trade on Monday.

The 8 7/8% notes were down about ½ point to trade in the par 1/8 to par 3/8 context, a source said.

They were among the session’s most actively traded issues with $22 million in reported volume.

The notes are down nearly 1 point from the heights reached after breaking for trade.

The heavily oversubscribed offering was pushed to the par 7/8 to 101 1/8 context in its initial days in the aftermarket.

Xerox priced a $500 million issue of the 8 7/8% notes at par on March 6.

Rithm misses another beat

Rithm’s 8% senior notes due 2029 continued to struggle in the aftermarket with the notes falling further below their discounted offer price.

The notes were off ½ to 5/8 points to close the day on a 97-handle.

They were trading in the 97¼ to 97¾ context heading into the market close, a source said.

There was $14 million in reported volume.

Rithm priced the $775 million issue at 98.981 to yield 8¼% on March 5.

The notes have struggled since breaking for trade and is one of only a handful of deals in 2024 to trade below its issue price, a source said.

Indexes

The KDP High Yield Daily index shed 8 basis points to close Monday at 50.81 with the yield now 6.8%.

The index was up 32 points in the previous week.

The ICE BofAML US High Yield index shaved off 2.6 bps with the year-to-date return now 1.032%.

The index added 57.5 bps on the week last week.

The CDX High Yield 30 index inched up 1 bp to close Monday at 106.74.

The index was up 23 bps on the week last week.

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