ZipRecruiter prices; Golden Nugget junk megadeal on deck; Ziggo flat; Coinbase’s new low

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 7 – The domestic high-yield primary market rounded out an active week with one deal clearing the market.

In its debut appearance in junkbondland, ZipRecruiter Inc. priced an upsized $550 million issue of eight-year senior notes (B2/BB-/BB-).

The week ahead also promises to be active with Golden Nugget, LLC on deck with a $3.7 billion two-part deal.

Meanwhile, the secondary space remained weak on Friday as the 10-year Treasury yield continued to march higher, breaking as high as 1.801% before closing the day at 1.767%.

While unchanged early in the session, the market closed the day down 1/8 to ¼ point, sources said.

New issues continued to struggle in the secondary space.

VodafoneZiggo’s 5% senior secured sustainability-linked notes due 2032 (B1/B+/BB) were straddling their discounted issue price in high-volume activity.

Outside of recent issues, Coinbase Global, Inc.'s two tranches of senior notes (Ba1/BB+) continued to struggle with the 3 5/8% due 2031 again hitting an all-time low.

Losses also continued to mount for Bed Bath & Beyond Inc.’s 5.165% senior notes due 2044, which sank another 3 points during Friday’s session.

Friday’s primary

ZipRecruiter made its debut in the high-yield market, pricing an upsized $550 million issue (from $500 million) of 5% eight-year senior notes at par, tight to talk, on Friday.

The order book was heard to be six-times oversubscribed at the close of books, according to a trader who called that level of demand into question, but added that there were smaller accounts heard to have gotten zeroed.

The completion of ZipRecruiter left one deal on the active forward calendar.

Golden Nugget is on the road with a $3.7 billion two-part offering set to price toward the middle part of the week ahead.

The bond deal, split 50/50, comes in a $1.85 billion tranche of seven-year senior secured notes with initial guidance in the 4½% area and a $1.85 billion tranche of eight-year senior unsecured notes with initial guidance in the 6¼% area.

The Golden Nugget refinancing deal also includes a $1.85 billion term, also currently in the process of syndication.

The loan order book is covered while the bond deal is half done, a trader said on Friday afternoon.

The Jan. 10 week could be a busy one because business originally scheduled for last Wednesday and Thursday was heard to be pushed ahead into the Jan. 10 week due to volatility that followed the wake of the Fed minutes release, according to a trader who still looks for $30 billion to $40 billion of January issuance.

VodafoneZiggo flat

VodafoneZiggo’s 5% senior secured sustainability-linked notes due 2032 fell flat in the aftermarket with the notes straddling their discounted issue price.

The 5% notes were marked at 99 1/8 bid, 99 3/8 offered early in the session.

However, they lost steam alongside the broader market as the session progressed.

The 5% notes were changing hands in the 98 7/8 to 99 1/8 context heading into the market close.

There was $38 million in reported volume.

Vodafone priced a $1.525 billion tranche of the 5% senior notes at 99.03 to yield 5 1/8% on Thursday.

The tranche priced at the wide end of yield talk in the 5% area.

The deal also included a €750 million tranche that priced at par to yield 3½%.

Coinbase’s new low

Coinbase’s tranches continued to struggle with the 3 5/8% notes due 2031 again hitting an all-time low.

The 3 5/8% notes were bid as low as 89½ during Friday’s session, the lowest bid for the notes since they hit the aftermarket in September 2021, a source said.

They were changing hands at 89 7/8 heading into the market close.

There was about $17 million in reported volume.

Coinbase’s 3 3/8% senior notes due 2028 were also trading off with the notes poised to close the day at 91½.

In addition to rate sensitivity, the crypto-exchange platform’s junk bonds were moving lower alongside bitcoin, which sank more than 11% over the last week.

Bitcoin was changing hands at $41,671.50, a decrease of 3.28%, shortly after 5 p.m. ET.

Bed Bath & Beyond down again

Losses continued to mount for Bed Bath & Beyond’s 5.165% senior notes due 2044 on Friday.

The notes traded as low as 73¾ during Friday’s session and stood poised to close the day down 3 points at 74, a source said.

The notes have fallen almost 9 points since it announced earnings on Wednesday.

The notes were changing hands at 82½ prior to reporting a large earnings miss.

Thursday fund flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Thursday, the most recent session for which data was available, according to a market source.

High-yield ETFs sustained $432 million of outflows on the day.

However actively managed high-yield funds were positive on Thursday, posting $233 million of inflows on the day, the source said.

Thursday's daily numbers trail a Thursday report from Refinitiv Lipper that the combined funds saw $584 million of net inflows in the week to the Wednesday, Jan. 5 close.

Those inflows follow $1.72 billion of net inflows into the junk funds for the prior two-week period (going back to the Wednesday, Dec. 22 close), according the market source.

However trailing last week's release of the hawkish minutes of the mid-December meetings of the Federal Open Market Committee high-yield ETFs saw $920 million of daily outflows on Wednesday, the day that the minutes were released, the source said.

Those flows aside, the cash balances of the high-yield accounts are presently believed to be on the high side, market sources say.

Indexes

The KDP High Yield Daily index was down 17 points to close Friday at 65.22 with the yield now 4.18%.

The index fell 24 points on Thursday, 12 points on Wednesday, 10 points on Tuesday and 9 points on Monday.

The index posted a cumulative loss of 72 points on the week.

The CDX High Yield 30 index fell 25 basis points to close Friday at 108.35. The index gained 3 bps on Thursday after falling 48 bps on Wednesday and 7 bps on Tuesday.

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