Morning Commentary: Cloud Software/Citrix 9% notes trade higher; sturdy inflows continue

By Paul A. Harris

Portland, Ore., April 6 – The recently priced Cloud Software Group Holdings Inc. 9% senior second-lien notes due September 2029 (Caa2/B-) continued to enjoy price improvements in the secondary market on an otherwise slow pre-Easter Thursday, according to a bond trader in New York.

Those bonds changed hands Thursday morning at 82¾, the trader said.

A debt capital markets banker had them at 81¾ late Wednesday afternoon.

The massive $3,837,622,000 issue priced at 79 on Tuesday, clearing some of the Citrix leveraged buyout bridge loan debt that had been hung up on dealer balance sheets since late 2022.

The new Valaris Ltd./Valaris Finance Co. LLC 8 3/8% senior secured second-lien notes due April 2030 (B2/BB-/BB-) were 99½ bid, par offered, basically unchanged, the trader said.

The upsized $700 million issue (from $600 million) priced at par, also on Tuesday.

The Noble Corp. plc/Noble Finance II LLC 8% senior notes due April 2030 (B2/BB-/BB-), another deal that priced as part of Tuesday's $6.34 billion burst of issuance, were par 3/8 bid, par 7/8 offered, also basically unchanged.

They were par ¼ bid, par ¾ offered, unchanged on Wednesday morning.

The London-based drilling contractor's $600 million issue priced at par, 25 basis points through price talk.

The high-yield bond market opened unchanged, and liquidity was low at midmorning as market participants staged for the holiday weekend ahead.

With the S&P 500 index down 0.17% at midmorning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was flat: a penny higher at $74.52.

The primary market sat idle, as expected, according to the trader who professed having no information as to how the post-Easter week might take shape in the high-yield new issue market.

Fund flows

The dedicated high-yield bond funds continued to see sturdy positive cash flows on Wednesday, posting $1.04 billion of net inflows on the day.

Actively managed high-yield funds had $670 million of inflows on the day.

High-yield ETFs saw $370 million of inflows on Wednesday, the source said.

Wednesday's $1.04 billion of daily net inflows follows Tuesday's $803 million of inflows to the combined funds.

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