Primary issuance remained closed to new business this week, marking 16 days since the last deal successfully launched. While life in the leveraged loan market is marginally more resilient, all but essential deals have also been postponed or outright cancelled.
Once again the main action is in Secondary, where mixed performance appeared more resilient than last week, until a Friday sell-off, where a market source remarked “It’s a bloodbath”. To Thursday, the average move was up just +0.25 pts, as 60% names gained (+1.03 pts), and 38% fell (-0.96 pts). Across Industries, Financials were the worst hit (-0.75 pts), followed by IT (-0.56 pts), while Healthcare (+0.80 pts) and Communication Services (+0.50 pts) were relatively bullish.
The sizeable drop amongst Financials came from the dubious pairing of Travelex and WiZink Bank. The former is still burdened by ongoing troubles; ransomware fallout, COVID-19 impacts on transaction volumes, and a potential CoC event from a default at BRS Ventures and the risk of a covenant breach under its RCF. In timely fashion Moody’s and S&P both lowered their ratings this week to Caa1 (-ve)/CCC (-ve), and the 2022 Notes are down a further -12 pts to the low 60s. WiZink’s 2023 PIK Notes traded down after a Supreme Court Ruling on whether or not products such as those sold by the bank were usurious. See the response to the Ruling here.
Healthcare enjoyed a revival this week, having been broadly down on the month (-1.16 pts), but up YTD (+4.6 pts). Teva, the Israeli Pharmaceuticals firm, has traded up around +2 to +3 pts across its 2025/2028 Senior Notes. Grifols, a Spanish Peer to Teva also gained around +2 pts across its 2025/2027 Notes, which have tended upward after solid Q4 results in late February.
In other large single name moves, Codere, the Spanish Gaming company lost -6.5/-4 pts on its USD/EUR 2021s. The firm has continued to suffer from forex exposure to its Latam operations as the Peso depreciated yet further against the Euro (exchange rate has approx halved in the last 18 months).
On a more positive note, several names have rebounded this week after large losses on the month. CMA CGM, the shipping and logistics firm, recovered +4/5.5/6 pts across the 2021/25/22 Notes. In its 6th COVID-19 update; the report suggests ‘business operations have now entered the recovery phase’, as manufacturing activities gradually pick up and workers return. Garrett, the BB automotive tech firm has also experienced a recovery. While its EUR TLBs have been largely unaffected, the 2026 Senior Notes traded down as low as 85 last Friday before shifting gears to rev back up into the 90s (+5 pts). Similarly, Adient, the US automotive seating and interior supplier realised a 4pt recovery to trade in the high 80s, after trading as below 84 last week.
Turning to the wonderful world of consumer credit lending, late on Wednesday night Amigo Loans founder James Benamor released a statement attacking his former firm. He accused the lender of committing ‘slow motion suicide, whilst playing out the script of Brewster’s Millions’. Amigo responded claiming the statement contained ‘several material inaccuracies’, and was ‘fundamentally incorrect’ in a number of respects. After free-falling on Thursday, the bonds found a new floor in the mid 60s, having traded in the 90s 24 hours earlier.
