Four drive-by deals price; forward calendar grows; Burford, Fortress at a premium; American Airlines active

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 29 – An active Monday in the primary market saw four drive-by deals come in generally tight executions.

The active forward calendar also ballooned to $3.99 billion as dealers scramble to beef up league table scores with the month of March fast winding down.

Meanwhile, the secondary space was quiet on Monday with the market largely unchanged as it enters into the final days of the first quarter.

New paper remained in focus with Burford Capital Global Finance LLC’s 6¼% senior notes due 2028 (Ba2/BB-) and New Fortress Energy Inc.’s 6 ½% senior secured notes due 2026 (B1/B+/BB-) trading with solid premiums in the aftermarket.

Meanwhile, American Airlines, Inc./AAdvantage Loyalty IP Ltd.’s two tranches of senior notes continued to gain in active trading as the company announced a surge in travel bookings.

Royal Caribbean Cruises Ltd.’s 5½% senior notes due 2028 (B2/B) also improved in active trading.

New Fortress gains

New Fortress Energy’s 6½% senior secured notes due 2026 were trading with a solid premium in the aftermarket with the notes continuing to gain momentum as the session progressed.

The 6½% notes were trading in a range of par ¾ to 101 5/8 during Monday’s session.

They rose to a 101-handle heading into the afternoon and were changing hands in the 101 to 101 3/8 context at the market close, according to a market source.

There was more than $39 million in reported volume.

New Fortress priced a $1.5 billion issue of the 6½% notes at par on Friday.

The yield printed at the wide end of the 6¼% to 6½% yield talk.

Burford outperforms

Burford’s 6¼% senior notes due 2028 outperformed in the secondary space with the notes briefly shooting past 103 in intraday activity.

The 6¼% notes traded to a high of 103 1/8 in intraday activity, according to a market source.

However, they stood poised to close the day at 102¾.

There was about $16 million in reported volume.

Burford Capital priced an upsized $400 million, from $350 million, issue of the 6¼% notes last Friday.

The yield printed tighter than talk for a yield in the 6½% area.

The deal was heard to be four-times oversubscribed.

AAdvantage gains

American Airlines’ recently priced tranches tied to its AAdvantage Loyalty program were in focus on Monday with the notes continuing their upward momentum.

The 5½% senior notes due 2026 gained 5/8 point to close the day at 104 5/8, according to a market source.

The yield on the notes was now 4.133%.

There were more than $40 million of the notes in play on Monday.

The 5¾% senior notes due 2029 were up about ¾ point to close the day at 106½ with the yield now 4.6%.

There was about $28 million in reported volume.

The large, liquid issues have remained active since pricing on March 11.

They received an extra lift on Monday as American reported that travel bookings have returned to 90% of pre-pandemic levels.

The airline plans to reactivate its full fleet in the second-quarter due to growing demand, the company said in a news release.

Royal Caribbean improves

Royal Caribbean’s 5½% senior notes due 2028 improved in active trading on Monday.

The 5½% notes were up about ¼ point to close the day at par ½ bid, a source said.

There was more than $31 million in reported volume.

The 5½% notes had a rough start in the secondary with the notes initially below par after breaking for trade last week.

However, they have slowly improved since.

In its third pass at the high-yield market since the start of the Covid-19 pandemic, Royal Caribbean priced a $1.5 billion issue of the 5 ½% notes at par on March 24.

Funds see $234 million Friday inflows

The dedicated high-yield bond funds saw $234 million of net inflows on Friday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw solid inflows of $334 million on the day.

Actively managed high-yield funds were negative on Friday, sustaining $110 million of outflows on the day, the source said.

Indexes mixed

Indexes were mixed at the start of the week.

The KDP High Yield Daily index gained 3 points to close Monday at 69.11 with the yield now 4.21%.

The index posted a cumulative gain of 22 points on the week last week.

The CDX High Yield 30 index fell 30 bps to close Monday at 108.61.

The index posted a cumulative gain of 36 bps on the week.

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