The broader impact on high yield and leveraged loan markets so far appears muted, with CrowdStrike’s senior notes down around a point in early trading, but little sign of any dramatic moves elsewhere.

This capped a fairly active week in the primary market. It feels like a long time since investors last had a look at as many as four LBO financing packages in the market at the same time, as they did with deals for Nuvei, US Silica, Acuren and Varsity Brands this week.

Tech stocks wavered on Wednesday and Thursday, causing average high yield prices to drop for the first time in 10 sessions, according to JP Morgan. But the tone in credit overall was positive, with inflows to bond and loan funds tracking a two-month high, according to the bank, and high yield in particular gaining momentum on rising hopes of imminent rate cuts.

A slight increase in supply is nowhere close to outweighing demand, setting a good backdrop for this week’s LBO syndications.

“The window is wide open for good spread prints and banks are taking advantage,” said a CLO manager. “There’s a push to get things out before holidays and deals are being well-received all things considered.”

Via 9fin data (chart)

Pounding sand

Apollo’s $1.125bn debt package for its buyout of US Silica was said to have been at deal size ahead of launch, with leads BNP Paribas and Barclays printing a $775m TLB due 2031 at SOFR+400bps and a 99 OID, and $350m 8.75% senior secured notes due 2031 at par on Thursday. Sources said the company’s growing industrials segment was an attractive counter-cyclical buffer to its oil and gas segment, which is expected to slow this year in line with shale production.

Ryan Reynolds-backed Canadian payments company Nuvei meanwhile is gaining traction on the buyside for a $2.55bn TLB due 2031 to fund its acquisition by Advent. There are bigger payment providers out there, but Nuvei has carved out a successful niche catering to high growth clients in tricky areas such as gambling companies, digital retailers in Latin America, or European online stores that need specialized payment options. Commitments are due Friday.

Acuren, a non-destructive testing company being acquired by SPAC Admiral Acquisition, was able to tighten guidance on its $725m 2031 TLB to SOFR+350bps-375bps and a 99.5 OID, in from earlier talk of 400bps at 99. Commitments are due 24 July.

Sources anticipate similarly robust demand for Varsity Brands’ $2.375bn loan to fund its acquisition by KKR. Commitments are due 30 July, with the order book said to be in good shape after pre-marketing efforts. Sources said they are weighing the company’s dominant market position against an aggressive cap structure and documentation.

Another one to watch next week is RR Donnelley’s $2.3bn bond and loan package to fund its $1.3bn acquisition of Valassis, the digital and print marketing business of Vericast Corp, as well as refinance existing debt. Our Credit QuickTake on the deal is now available.

And another one

Blackstone’s banking deposit infrastructure business IntraFi printed its third debt-financed dividend deal in the past seven months on Thursday, raising a $2.1bn TLB due 2031 at SOFR+400bps and 99.5 to refinance its 2026 TLB and pay a shareholder distribution.

Investors touted the company’s strong performance since last year’s regional banking crisis, which deepened the focus on and demand for insured deposits. Some flagged regulatory risk, as the company’s business relies on existing FDIC policy.

“I think the spike in growth is going to stay, but it does create some interesting concerns,” said the CLO manager. “Multiple-wise, even if growth did soften out it would very much have an open welcome to public markets and its valuation would easily cover the debt.”

Elsewhere refinancing and repricing activity remained strong.

Boyd Corp, a privately owned industrial part maker for phones and autos, is looking to complete a refinancing of its existing first and second lien debt stack via a $1.8bn TLB due 2029 that’s talked at S+475bps and 98-98.5. The company has also obtained $518m of preferred equity to support the refi. The loan was expected to price Thursday.

AMEX GBT ratcheted down the pricing on its $1.4bn TLB due 2031 to S+300bps and 99.75, in from price talk of 325bps-350bps and 99.5. The deal will refinance its 2025 and 2026 term loans, clearing out its maturity runway through to July 2031.

Epiq, a tech provider owned by OMERS and Harvest Partners, priced a $300m add-on first lien loan to refinance an existing second lien facility. The B3/B- loan was priced at S+475bps and a 99.75 OID, versus talk of 99.25-99.5 at launch.

“Their recent results have been great so we're happy about it,” said an analyst tracking the name. “We had some concern on the AI risk, but it seems they have used AI/ML for a long time. Their class action and restructuring business should also offset some of that risk,” they said.

Secondary moves

Aside from CrowdStrike’s blip on Friday, there were some notable moves in the secondary this week.

CommScope’s debt rallied sharply on Thursday after the telecom infrastructure company announced a $2.1bn asset sale, boosting investor confidence ahead of some significant debt maturities next year. The company is set to engage with two lender groups for a potential deleveraging liability management exercise after the announcement, 9fin reported Thursday.

(On that note — check out our latest 9Questions interview with Brett Klein of Sculptor Capital, who said LMEs are the “most important aspect defining credit markets today”.)

On Monday, Macy’s bonds traded down after the retailer ended talks with Arkhouse and Brigade over a potential acquisition.

Spirit Airline’s 8% 2025 SSNs were among the biggest losers in HY this week, dropping around five points after the carrier lowered its second quarter outlook because of weaker than expected non-ticket revenue. The company blamed this on competitive market pressure driving down revenues from ancillary services.

PetSmart debt meanwhile has dipped a point or two since reporting Q4 earnings on June 11. Moody’s changed the retailer’s outlook to negative from stable on Wednesday, owing to weaker credit metrics in light of weaker consumer spending.

"We expect PetSmart's topline growth to slow over the next 12-18 months as consumers continue to shift away from discretionary pet supplies and premium consumables to more value-oriented, low-margin consumables, which will pressure earnings and credit metrics," said Moody's Ratings vice president Stefan Kahandaliyanage.

Cleveland-Cliffs was also in the spotlight after it announced a deal to acquire Stelco; on Wednesday we unpacked the potential implications for both companies — and those of its long-standing acquisition target, US Steel, in light of recent political developments.

Other stuff

Boeing’s largest union says it will strike if contract negotiations fail (Washington Post)

Warner Bros Discovery drafts break-up plan (Financial Times)

Wall Street starts calling time on ESG labels after backlash (Bloomberg)

It's the hottest year on record in NYC. And we're just warming up (NBC)

Sound Point Capital is negotiating to resolve SEC investigation (Bloomberg)

Grant Thornton explores three-way merger (Financial Times)

Blue Owl to buy Atalaya in deeper push into private credit (Bloomberg)

Bela Bajaria, Netflix’s chief content officer: ‘If you try to make a show for everyone, you make a show for no one’(Financial Times)