Coty, Morgan drive by in junk primary market; Carvana declines; funds add $373 million

By Paul A. Harris and Cristal Cody

Portland, Ore., July 19 – High summer finds the high-yield new issue market heating up.

The Wednesday session saw drive-by deals from Coty Inc. (a blowout, sources said) and Morgan Automotive.

Ontario Gaming GTA LP will close the books Thursday on a $400 million offering talked to yield in the 8¼% area.

And there were announcements of $1 billion-plus deals from Brand Industrial Services, Inc. and Frontier Communications Parent, Inc.

In the secondary, Carvana Co.’s bonds declined Wednesday, while its stock jumped 40.2% on the day after the online auto retailer reported strong second-quarter earnings, a $1 billion stock offering and plans to exchange its senior junk bonds.

Carvana’s 10¼% senior notes due 2030 (Ca/CCC-) dropped about 3¼ points over the session and were down 5 points on the week.

Frontier Communications Holdings LLC’s paper continued to recover Wednesday after Monday’s declines. The company’s 5% first-lien secured notes due 2028 were up 1¼ points.

High-yield exchange-traded funds saw $373 million of daily cash inflows on Tuesday, the most recent session for which data was available at press time, according to a market source.

The Tuesday cash flows of the actively managed high-yield funds were absolutely flat.

The combined funds are tracking $2 billion of net inflows for the week that was set to conclude with Wednesday’s close, according to the market source.

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