Morning Commentary: Raising Cane’s joins junk calendar; First Quantum notes tank

By Abigail W. Adams

Portland, Me., Oct. 30 – While high-grade issuers stampeded to capital markets on Monday, the high-yield primary market was quiet but not dormant.

Raising Cane’s Restaurants LLC joined the calendar with a $500 million offering of long five-year senior notes (B3).

Early whispers have the notes coming with a yield in the high 9% to 10% area with pricing expected on Wednesday.

Additional activity is expected with Ineos Quattro expected to announce its already telegraphed €800 million equivalent offering of dollar- and euro-denominated secured notes.

However, activity is expected to be light as the market awaits greater clarity on the future rate environment from the Federal Open Market Committee’s Wednesday announcement.

Meanwhile, the secondary space launched the day on firm footing but was starting to leak as the session progressed.

The cash bond market was up 1/8 point at the open but unchanged as the session progressed with Treasury yields continuing to widen.

Trading volume was light early in the session with topical news the driver of activity in the space.

First Quantum Minerals Ltd.’s 8 5/8% senior notes due 2030 (//B+) tanked in early trade as conflict continued around the company’s cooper mine in Panama.

The 8 5/8% senior notes sank 7 points in heavy volume as the Panamanian Government called for a vote on First Quantum’s mining contract with the country.

The 8 5/8% notes were trading in the 85¾ to 86¾ context early in the session, a source said.

The yield rose to about 11 3/8%.

First Quantum’s Panamanian mine is its largest asset.

The mine was forced to shut down in February due to failed contract negotiations with the government.

There have been widespread protests in Panama since the Panamanian President signed off on a new 20-year contract with First Quantum earlier in the month.

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