Junk: Arconic prices; Tronox, Sunnova under pressure; funds lose $376 million

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 27 – The domestic high-yield primary market saw one deal price during Thursday’s session – Arsenal AIC Parent LLC’s downsized $700 million issue of 8% seven-year senior secured notes (Ba3/B+/BB+) backing the buyout of Arconic Corp.

Two deals remain on the forward calendar with pricing expected in the week ahead – KDC/One Development Corp. and KDC US Holdings, Inc.’s $500 million offer of five-year senior secured notes (B3) and Rain Carbon Inc.’s $450 million offering of six-year second-lien senior secured notes (B3/B).

Meanwhile, a strong open in the secondary market gave way to selling pressure, although with no clear cause for the market reversal.

“It just got incrementally worse,” a source said.

While up ¼ point at the open, the cash bond market ended the day down about 1/8 point.

Tronox Inc.’s 4 5/8% senior notes due 2029 (B1/BB-) were under pressure in heavy volume after an earnings miss and weak guidance.

But Sunnova Energy Corp.’s 5 7/8% senior notes due 2026 (B1) claimed the title of the largest loser of Thursday’s session with the notes off more than 3 points following earnings.

Meanwhile, high-yield mutual funds and exchange-traded funds saw outflows of $376 million in the week through Wednesday’s close, according to the Refinitiv Lipper Fund Flow report.

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