United Wholesale prices; secondary holds as rates jump; BWX on a 101-handle; Parkland up

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 30 – The domestic high-yield primary market saw one deal price during Tuesday’s session.

United Wholesale Mortgage, LLC priced a $700 million issue of eight-year senior notes (Ba3) in a drive-by.

While primary market activity was slow on Tuesday, five deals are expected for Wednesday’s session, the last day of the month and the first quarter.

Meanwhile, the secondary space was holding steady on Tuesday even as the 10-year Treasury yield surged as high as 1.76% in intraday activity.

While the market felt soft early in the session with some weak bids, the market held.

Buying activity increased as the session progressed and the 10-year Treasury yield fell to 1.71%, a source said.

However, the market closed the day unchanged.

New paper continued to be the primary driver of trading activity.

BWX Technologies Inc.’s 4 1/8% senior notes due 2029 (Ba3/BB) traded up to a 101-handle in high-volume activity.

While Parkland Corp.’s 4½% senior notes due 2029 (Ba3/BB/BB) gained strength heading into the close, they remained on a par-handle.

New Fortress Energy Inc.’s 6½% senior secured notes due 2026 (B1/B+/BB-) remained active on Tuesday with the notes giving back some of their gains.

Tuesday’s primary

The flow of news in the Tuesday new issue market slowed from Monday's feverish pace.

United Wholesale Mortgage priced the session's sole deal, a $700 million issue of 5½% eight-year senior notes (Ba3) that came at par, on top of yield talk, in a drive-by.

Five deals are expected to price Wednesday, the final day of March, clearing the decks ahead of what will be, for most market participants, an extended Easter holiday weekend beginning on Good Friday.

Hard information surfaced on just one of those deals on Tuesday.

Ingram Micro Inc. talked its $2 billion offering of eight-year senior secured notes (B1//BB) to yield in the 4¾% area, tight to early guidance in the high 4% area.

Official talk is pending for the remaining four deals on the active calendar.

However, all are expected to price Wednesday, as dealers scramble for the last nuggets of league table credit before the end of the month.

It is unlikely that there will be much new issue news on Thursday, sources say.

Most market participants are expected to take Good Friday off, they add.

However, owing to the fact that Good Friday is also the first Friday of April, and the U.S. Department of Labor's Bureau of Labor Statistics is expected to release its closely watched non-farm payrolls numbers, the high-yield bond market will be skeletally staffed, a bond trader said.

BWX on a 101-handle

BWX Technologies’ 4 1/8% senior notes due 2029 were putting in a solid performance in the secondary space with the notes trading up to a 101-handle.

The 4 1/8% notes were marked at 101 bid, 101¼ offered heading into the market close.

They were changing hands on a par-handle after breaking for trade on Monday.

BWX Technologies priced a $400 million issue of the 4 1/8% notes at par in a Monday drive-by.

The yield printed at the tight end of yield talk in the 4¼% area.

Parkland improves

Parkland’s 4½% senior notes due 2029 were gaining strength during Tuesday’s session although they remained on a par handle.

The 4½% notes were marked at par ¼ bid, par 5/8 offered heading into the market close, a source said.

They traded as low as par earlier in the session.

The deal from the Canadian-based gasoline retailer primarily appealed to Canadian accounts, a source said.

However, the notes improved as more buyers came into the market as the session progressed.

Parkland priced an $800 million issue of the 4½% notes at par on Monday.

Initial guidance had the deal coming to yield in the 4¾% area.

New Fortress down

New Fortress Energy’s 6½% senior secured notes due 2026 were giving back some of their gains during Tuesday’s session.

The 6½% notes were down about ¼ point and stood poised to close the day at par ¾ bid, 101 offered.

The new paper from energy infrastructure company was off even as the overall energy space remained well bid despite a slide in WTI crude oil futures.

The $1.5 billion issue was a huge deal and flippers may still have been involved and driving down the price with selling activity, a source said.

$695 million Monday inflows

The dedicated high-yield bond funds saw a solid $695 million of net daily inflows on Monday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $365 million of inflows on the day.

Actively managed high-yield funds had $330 million of inflows on Monday, the source said.

The combined funds are tracking $1.27 billion of net inflows for the week that will conclude with Wednesday's close, according to the market source.

Indexes down

Indexes had slight losses on Tuesday after a mixed start to the week.

The KDP High Yield Daily index slid 1 point to close Tuesday at 69.10 with the yield now 4.22%.

The index gained 3 points on Monday.

The CDX High Yield 30 index was down 12 bps to close Tuesday at 108.49.

The index fell 30 bps on Monday.

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