Chart Industries on deck; Citrix softer; Carnival comes in; Spectrum Brands gains

By Paul A. Harris and Abigail W. Adams

Portland, Me., Dec. 5 – The high-yield new-issue market generated its highest news volume in months on Monday.

In the dollar-denominated market Chart Industries, Inc. began a roadshow for a $2.06 billion two-part deal.

It features a $1.31 billion tranche of seven-year senior secured notes with initial guidance of 8¼% to 8½% and a $750 million tranche of eight-year senior unsecured notes with initial guidance that has them coming 250 basis points behind the secured notes.

The deal came into the market pursued by $2.3 billion of reverse inquiry skewed toward the secured tranche, according to a sellside source who added that there is chatter in the market that pricing on both tranches will tighten significantly.

The secured tranche could come with a seven-handle yield, the source said.

Pricing is scheduled for Friday; however the roadshow could wrap up Wednesday, and the deal could price Thursday, the sellsider said.

Elsewhere Jones DesLauriers Insurance Management Inc. plans to kick off a $300 million offering of senior notes due 2030 (expected ratings Caa2/CCC/CCC+) on an investor conference call scheduled to begin at 11 a.m. ET on Tuesday.

A roadshow will follow, and is set to run through Thursday.

Meanwhile most of Monday's high yield primary market news came out of Europe.

French telecom Iliad SA priced an upsized €750 million issue (from €500 million) of 4.5-year senior notes (S&P: BB/Fitch: BB) at par to yield 5 3/8%.

The yield came at the tight end of the 5 3/8% to 5½% yield talk. Initial guidance was in the 5¾% area.

Also on Monday 888 Holdings plc took part in a conference call with fixed income investors a ahead of the planned sale of €200 million of 888 Acquisitions Ltd. (B1/B/BB+) senior secured notes.

And Intrum AB (Ba3/BB/BB) mandated Goldman Sachs, Citigroup and SEB to lead a contemplated €300 million offering of 5.25-year senior notes.

Meanwhile, the secondary space launched the week on soft footing with the cash bond market falling ¼ point after the latest economic data point shook the market’s confidence in a less hawkish Federal Reserve, sources said.

The ISM services industry report came in hotter than expected, reflecting continued economic growth and raising the specter of continued aggressive rate hikes from the Federal Reserve, especially in lieu of last Friday’s U.S. nonfarm payroll report.

While weak, the market was holding up well compared to equities, a source said.

Volume remained thin with large, liquid issues and topical news driving activity in the space.

Carnival Corp.’s 10 3/8% senior priority notes due 2028 (B2/B+) were among the most actively traded issues in the secondary space with the notes pulling back after hitting a new, all-time high the previous week.

Citrix Systems Inc./Tibco Software Inc.’s 6½% senior secured notes due 2029 (B2/B) also continued to weaken after setting an all-time high in last week’s rally.

Spectrum Brands Holdings, Inc.’s 3 7/8% senior notes due 2031 (B2/B) were a bright spot on a down day with the notes continuing their strong uptrend as a long-planned asset sale comes closer to completion.

Carnival comes in

Carnival’s 10 3/8% senior priority notes due 2028 were coming in on Monday after hitting an all-time high amid the market strength the previous week.

The 10 3/8% notes fell 5/8 point with the notes breaking below a 104-handle after breaking above it just two sessions ago.

The 10 3/8% notes were changing hands in the 103 ¾ to 104¼ context heading into the market close.

There was $18 million in reported volume.

The high-beta notes traded as high as 105 in the market rally of the previous week.

Citrix softens

Citrix’s 6½% senior secured notes due 2029 were also weaker on Monday after setting an all-time high the previous week.

The 6½% notes were off ½ to ¾ point with the notes breaking below an 87-handle.

They were changing hands in the 86¾ to 87 context heading into the market close.

There was $12 million in reported volume.

The 6½% notes broke above an 87-handle last Thursday for the first time since hitting the secondary space with the notes lifted to a new all-time high of 88 1/8.

However, the notes have pulled back since with some profit taking in the name, a source said.

Spectrum gains

Spectrum Brands 3 7/8% senior notes due 2031 continued their strong uptrend on Monday with investors more confident a long-planned asset sale was nearing completion.

The 3 7/8% notes gained another 2 ½ points to close the day in the 81 to 81½ context, according to a market source.

There was $12 million in reported volume.

The 3 7/8% notes also climbed 2½ points last Friday after previously trading in the 74¾ to 75 context.

The notes were on the rise after Spectrum announced growing confidence the sale of its hardware and home improvement business to ASSA ABLOY would be completed, a source said.

The consumer product company announced the sale of its hardware business segment to Swedish conglomerate ASSA ABLOY for $4.3 billion in September 2021.

However, the deal was blocked by the U.S. Dept. of Justice over anti-trust concerns.

ASSA ABLOY announced the sale of two business units last Friday in an effort to overcome regulator objection to the acquisition of Spectrum’s business unit.

Fund flows

The dedicated high-yield mutual funds saw $645 million of net daily cash inflows on Friday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $495 million of inflows on the day.

Actively managed high-yield funds saw $150 million of inflows on Friday, the source said.

The combined funds are tracking $1.8 billion of net inflows on the week that will conclude with Wednesday's close, according to the market source.

Indexes

The KDP High Yield Daily index slid 8 points to close Monday at 52.52 with the yield 7.18%.

The index posted a cumulative gain of 45 points on the week last week.

The ICE BofAML US High Yield index was down 15.8 basis points with the year-to-date return now negative 10.005%.

The CDX High Yield 30 index was down 61 bps to close Monday at 100.85.

The index posted a cumulative gain of 10.5 bps on the week last week.

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