Junk secondary rallies post-Fed; Carnival, Charter rebound; VistaJet gains

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 16 – The domestic high-yield primary market remained shuttered on Wednesday despite the risk-on sentiment in the market with only one deal on the forward calendar.

SPX Flow Inc.’s (Redwood Star Merger Sub. Inc.) $570 million offering of eight-year senior notes (Caa2/CCC) is set to price on Thursday although the deal was heard to be facing some headwinds.

Meanwhile, the secondary space strongly rallied on Wednesday with the market up about 1 point, nearly erasing its losses on the week.

With the Federal Reserve’s rate hike decision coming in largely as expected and Federal Reserve chair Jerome Powell’s comments about the economy assuaging some of the recession fears that sparked Monday’s brutal sell-off, buyers were returning to the space, sources said.

Carnival Corp.’s junk bonds continued to recover from their recent sell-off with the cruise line operator’s capital structure rising 1½ to 3 points during Wednesday’s session.

Charter subsidiary CCO Holdings LLC’s junk bonds were also up in active trading after a rating downgrade and weak market conditions drove the notes to multiyear lows in recent sessions.

VistaJet’s 6 3/8% senior notes due 2030 (Caa1/B-/BB-), one of the worst performing new issues of 2022, gained more than 3 points as a risk-on sentiment returned to the space.

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