Morning Commentary: HUB on deck; Fortrea starts roadshow; new Ryman 7¼% trades higher

By Paul A. Harris

Portland, Ore., June 8 – High-yield primary market news came at a brisk pace on Thursday morning.

In the dollar-denominated market, HUB International Ltd. is on deck with a $2.675 billion offering of seven-year senior secured notes (B2/B).

With official price talk pending at press time, the deal was guided in the mid-7% area earlier in the week.

Late Wednesday demand was heard to be around deal-size, with HUB seeking to push pricing to 7¼%, a sellside source said.

Meantime, Fortrea Holdings Inc. began a roadshow for a $570 million offering of seven-year senior secured notes (BB/BB+).

The spinoff-financing deal has initial guidance in the high-7% to 8% area and is expected to price on Monday.

In the euro-denominated new issue market, InfoPro Digital launched a €975 million two-part offering of IPD 3 BV five-year notes (expected B2/confirmed B/expected B+), set to price later on Thursday.

A €500 million tranche of fixed-rate notes launched at 8%, 12.5 basis points inside of price talk in the 8¼% area and well inside of the 8½% to 8¾% initial guidance.

A €475 million tranche of floating-rate notes launched with a 475 bps spread to Euribor at OID 99. The final spread comes on top of spread talk (initial guidance was 500 bps). The price comes 50 cents rich to the rich end of the 98 to 98.5 price talk (initial guidance was 97.5 to 98).

The broad high-yield market opened unchanged on Thursday, according to a trader in New York.

With the S&P 500 stock index up 0.35% at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) was 0.38% better, up 28 cents, at $74.51.

The new Ryman Hospitality Properties, Inc. 7¼% senior notes due July 2028 (B1/B+) were a little better on the morning at par ½ bid, 101 offered in active trading, the bond trader said.

The upsized $400 million issue (from $300 million) priced at par on Wednesday.

Fund flows

The dedicated high-yield bond funds saw $140 million of net daily cash inflows on Wednesday, according to a market source.

High-yield ETFs saw $130 million of inflows on the day.

Actively managed high-yield funds saw $10 million of inflows on Wednesday, the source said.

As the market awaits an expected Thursday afternoon report on the weekly cash flows of the various asset classes from Refinitiv Lipper, the combined high-yield funds are tracking $2.5 billion of net inflows on the week that concluded with Wednesday’s close, according to the market source, who added that should that amount of weekly inflows materialize later Thursday it would be the largest since mid-April.

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