StoneX Leveraged Finance Commentary - 245th Edition - 6/14/2025

June 14^th 2025

StoneX Trading Highlights and the Week Ahead – LSTA Tier 1/LMA Member

TRADING DESK COMMENTARY – NOT A RESEARCH PRODUCT

 

TABLE OF CONTENTS

1. Loans: Lakeshore Learning (LAKINT), Del Monte (DELMFD), Audacy (CBSR), Container Store (TCS)
2. Private Equity, Private Credit, and ReOrg:  24 Hour Fitness (HRFITW), Tailored Brands (TLRD), Learfield (LEACOM)
3. U.S. Distressed: Spirit Airlines (SAVE), Sunnova Energy (NOVA), Ligado (NEWLSQ)
4. U.S. High Yield: GEO Group (GEO), CoreCivic (CXW), Five Point Operating Company (FPH)
5. Converts: Spirit Airlines (SAVE)
6. Credit of Note: Trimark (TRIMUS)
7. EU Credit: TalkTalk (TALKLN), Thames Water (THAMES), Selecta Group (SELENSW)
8. Asia IG & HY: Israel/Iran, Macau Gaming (WYNMAC/MPEL), MEDCIJ, TAIFNG AT1s

ATTACHMENTS

1. Europe’s Moment in the Sun from Global Macro Strategist Vincent Deluard (415-713-5205 – vincent.deluard@stonex.com)

Data Releases	Date / Time (EST)	Survey	Actual
CPI MoM	Weds (6/11) 8:30am	0.2%	0.1%
CPI YoY	Weds (6/11) 8:30am	2.5%	2.4%
PPI Final Demand MoM	Thurs (6/12) 8:30am	0.2%	0.1%
U. of Mich. Sentiment	Fri (6/13) 10:00am	53.6	60.5
Empire Manufacturing	Mon (6/16) 8:30am	(6.0)	--
Retail Sales Advance MoM	Tues (6/17) 8:30am	(0.7%)	--
Industrial Production MoM	Tues (6/17) 9:15am	0.0%	--
Housing Starts	Weds (6/18) 8:30am	1360k	--
Initial Jobless Claims	Weds (6/18) 8:30am	245k	--
FOMC Rate Decision (Upper Bound)	Weds (6/18) 2:00pm	4.50%	--
FOMC Rate Decision (Lower Bound)	Weds (6/18) 2:00pm	4.25%	--

Source: StoneX Financial Inc., Bloomberg

LevFin Gainers				LevFin Decliners				Converts Gainers				Converts Losers
Credit	Move	Current Px		Credit	Move	Current Px		Credit	Move	Current Px		Credit	Move	Current Px
HPP 4.65 29	12.25	89.00		NOVA 5.875 26	(21.25)	4.25		INDI 3.5 29	10.75	86.63		BAND 0.25 26	(3.75)	92.00
HPP 3.25 30	10.50	82.00		NOVA 11.75 28	(21.00)	4.25		PCT 7.25 30	7.50	111.13		AMC 6 30	(2.50)	95.75
GTE 9.5 29	7.25	77.50		NFE 6.5 26	(17.00)	43.00		PLUG 7 26	5.38	77.38		PRO 2.25 27	(2.88)	92.88
NBR 8.875 31	7.00	82.00		CYH 6.875 29	(7.00)	78.75		SEDG 2.25 29	6.00	82.75		CRNC 1.5 28	(1.25)	74.13
HPP 5.95 28	6.50	96.00		NFE 8.75 29	(6.75)	23.75		EOSE 6.75 30	2.50	97.38		PCG 4.25 27	(2.63)	98.75

Source: StoneX Financial Inc., Bloomberg

HY OAS - WoW	Current OAS (bps) - As of Prev. Close	Prev. Week OAS (bps)	WoW ∆ (bps)	YTW - As of Prev. Close	Prev. Week YTW	WoW ∆
HY Index {LF98TRUU Index}	306	300	6	7.36	7.43	(0.07)
BB {I00182US Index}	183	171	12	6.14	6.16	(0.01)
B {I00185US Index}	293	288	6	7.28	7.34	(0.06)
CCC {I00188US Index}	710	700	10	11.28	11.31	(0.03)

Source: StoneX Financial Inc., Bloomberg

1. Loans:

AXED: Allen Media (ALNMED), Anastasia (ANABEV), Aventiv (SECRUS), Auction.com /Ten-X (AUCLLC), Audacy (CBSR), CBL and Associates (CBL), Correct Care (CCSINT), CIBT Global (CIBHOL), Crash Champions (CRASHC), Elevate Textile (ITXN), Envision Healthcare (EVHC), ETC Group/Netceed (EOSUSF), Fogo de Chao (FOGO), Lakeshore Learning (LAKSHI), Loyalty Ventures (LOVEIN), Leslie Pools (LESL), Nutrisystem (KNSACQ), Parts Authority (PAIHOL), PREIT Associates (PEI), Resource Label (RESLAB), The Container Store (TCS), Tosca Services (TOSCSE), Trimark (TRIMUS), and TruGreen (SVMSTR)

US loan funds saw an inflow of 354mm vs $44mm of inflows the previous week.  The new issue market remained steady, with over $15bn in volume. The desk traded Audacy (CBSR), and it left us axed in TL and equity. Container Store (TCS) kept us busy. We traded the 1st out term loan and the common and have the 2nd out term loan for sale. Loyalty Ventures (LOVEIN) was topical with news the Judge will hear Summary Judgement arguments regarding Constructive Fraudulent Transfer from the Defendants’ response ( Section 546(e)’s safe harbor).   Everise (BCPEVE) was a new name for the desk.  Please reach out if you are involved.  We closed as a buyer.  The desk was active in Trimark (TRIMUS) and closed as a seller. TRIMUS is worth a look in the 50s.  We would also encourage you to look at Lakeshore Learning (LAKINT).  Ken Smalley covers TRIMUS here, and Ben Briggs covers LAKINT; we can confi you on both.  Lastly, we rounded out the week as a seller of Del Monte (DELMFD).

Doug Gervolino – Loan & ReOrg Equity Trader

2. Private Equity, Private Credit, and ReOrg:

AXED: American Consolidated (ANCR), Altisource (ASPS), American Tire (ATD), Audacy (CBSR), Avaya (AVYA), Cirque Du Soleil (CIRQUE), Endo (ENDP), J Crew/Chinos (JCG), Mallinckrodt (MNK), Neiman Marcus Group (NMG), Elevate Textile (ITXN), Full Beauty (FBB), Lehman (LBHI), Men’s Warehouse (TLRD), Patagonia Holdco (PATAGO), Resolute Investments (AMEBEA), Research Now (EREWDS), and Serta Simmons (SERSIM)

The desk saw an uptick in activity last week.  We were active in Learfield (LEACOM) and closed as a seller.  The Tailored Brands (TLRD) bid improved.  Please call for details.  We had several accounts inquire about 24 Hour Fitness (HRFITW) after the recent activity.  Ben Briggs has done work on HRFITW if you want to compare notes. Lastly, the desk closed as a seller of Audacy (CBSR).

Doug Gervolino – Loan & ReOrg Equity Trader

3. U.S. Distressed:

AXED: Akumin (AKUCN), AMC Entertainment (AMC), Brightline East (BRIEAS), Chesapeake (CHK), CommScope (COMM),  Cooper Standard (CPS), Eagle International (EAGRUY), Emergent BioSolutions (EBS), Endo (ENDP), Evergrande (EVERRE), Exela (EXLINT), First Republic (FRCB), Franchise Group (FRG), Graftech Global (EAF), Guitar Center (GTRC), Hertz (HTZ), H-Foods (HEFOSO), Intelsat (INTEL), Level 3 (LVLT), Lumen (LUMN), LEH, Ligado (NEWLSQ), Mallinckrodt (MNK), McDermott (MDR), Modivcare (MODV), New Fortress Energy (NFE), Office Property (OPI), Pyxus (PYXHLD), RealReal (REAL), Scripps(SSP), Serta (SERSIM), Signature Bank (SBNY), Spirit Airlines (SAVE), Staples (SPLS),  Telesat (TELSAT),  Unifrax (FRAX), Uniti (UNIT), Urban One (UONE), Vericast (VERCST), Veritas (VERITS), WeWork (WEWORK), WW International (WW), Zayo (ZAYO)

It was an active week in Distressed, beginning with Sunnova Energy (NOVA) filing for Chapter 11 in Texas. After some initial hurdles, the company secured $90mm in DIP financing from its unsecured bondholder group. Additionally, NOVA sold certain solar assets to Lennar Homes to help fund the Chapter 11 process. Both the NOVA 5.875 26 and NOVA 11.75 28 ended the week in the 4–5 context. Our strategist Ken Smalley is investigating the situation if you would like to compare notes. Strategist Ben Briggs spoke with Spirit Airlines (SAVE) management and is available to give you the download of that conversation, since the company did not hold a 1Q25 earnings call. Please reach out to him to discuss. New Fortress Energy (NFE) remains topical as the company is looking to potentially delay the start of another LNG project to help conserve liquidity. Paper in the stack traded lower on the news, with the NFE 6.5 26 losing 17pts on the week. Ligado (NEWLSQ) was topical as AST Space Mobile (ASTS) announced a settlement term sheet with parties including NEWLSQ, Viasat (VSAT), and Inmarsat (IMASF). Strategist Ken Smalley knows the credit well and is available for discussion. Both the NEWLSQ 15.5 23 and the NEWLSQ 17.5 24 were 1-2pts higher on the announcement. Finally - we remain active in Emergent Biosolutions (EBS) 3.875 28, with the desk trading paper in the 78-79 context. 

Doug Gervolino – Loan & ReOrg Equity Trader

Andrew Baigorria – Trading Associate

4. U.S. High Yield:

AXED: CoreCivic (CXW), Geo Group (GEO), Jane Street Group (JANEST), Nordstrom (JWN), Kohl’s (KSS), Manitowoc (MTW), NGL Energy (NGL), EnPro Industries (NPO), Newell Brands (NWL), Organon (OGN), Oceaneering International (OII), StoneX (SNEX), W&T Offshore (WTI), C&S Group (CSWHOL), Land O' Lakes (LLAKES), MGM China Holdings (MGMCHI), Saks Global (SAKSGL), Telford Finco (TELFIN), Universal Entertainment (UETMF)

 

The positive momentum in the High Yield sector over the past three weeks came to a halt on Friday in response to the conflict in the Mideast.  HY OAS ended the week at +306; YTW 7.36%.  Lipper reported a $1.1B inflow for the week ending Wednesday (the 7^th straight week of positive flows).  In the primary market, only a modest $2.55B was priced in 5 deals, but the highly anticipated $5B deal from x.AI is expected to come to market this coming week. The energy sector was in focus at the end of the week as WTI surged 6% to $72.73.  Energy spreads tightened 22bp to +364.  Vital Energy (VTLE) 7.875 ’32 (90.5, 9.81%, B2/B) traded up +3 points, reaching a 3 month high.  Still trading at a spread of +540, these benchmark sized notes still have ample room to further tighten to the energy index. A key gainer of the week was Algoma Steel (ALGSTE) 2^nd lien 9.125 ’29 (91,12.12%, B3/B-) trading up +9 points.  Despite the imposition of a 50% tariff on imported steel, the Canadian government stated they are standing by to provide adequate liquidity if needed.  Dana Corp (DAN) 4.25 ’30 (98.375, 4.60%, B1/BB-) traded up +4.5 points after their announced sale of their off-highway business to Allison Transmission (ALSN) 3.75 ’31 (90.5, 5.75%, Ba2/BB+) for $2.7B.  DAN plans to repay roughly 83% of their outstanding debt, and return $550mm to shareholders when the deal closes in Q4, and ALSN expects the deal to be immediately accretive for them as well. Hudson Pacific Properties (HPP) 4.65 ’29 (88.375, 8.26%, B2/B) soared nearly +13 points to reach a 6-month high after gaining liquidity through a $600mm equity raise. HPP intends to repay borrowings under their RCF, other indebtedness, and for GCP.  The desk was active and remains axed in a sleep-safe name, Five Point Operating (FPH) 10.5 ’28  (102.125, 5.21%, B3/B+).  With a neutral cash to debt balance and LTM FCF of $198mm, these notes seem like a likely call candidate when the call price drops to par in November.  Private detention credits GEO Group (GEO) 1^st lien 8.625 ’29 (105.75 6.37%, B1/BB)  and CoreCivic (CXW) 8.25 ’29 (105.5, 6.10%, Ba2/BB-) were in the news almost every day this week with headlines that skewed both positive and negative. Strategist Ben Briggs covers both GEO and CXW and is available to discuss the puts & takes of these opportunities.

Adam Rosenblum – High Yield Trader

Andrew Baigorria – Trading Associate

5. Converts:

Bonds Traded This Week: CBRL 1 ¾ 09/15/30, ETSY 1 06/15/30, HOUS 0 ¼ 06/15/26, IREN 3 ½ 12/15/29, GRPN 6 ¼ 03/15/27, IRWD 1 ½ 06/15/26, MPUS 0 ¼ 04/01/26, MODG 2 ¾ 05/01/26, ODD 0 06/15/30, PCT 7 ¼ 08/15/30, PMT 8 1/2 06/01/29, PODD 0 ⅜ 09/01/26, RDFN 0 ½ 04/01/27, TREE 0 ½ 07/15/25, and SYNA 0 3/4 12/01/31

The converts desk has been active trading the busy new issue market this week, in addition to trading secondaries. Please reach out to the desk to discuss further. We also highlight to previous holders of Spirit Airlines (SAVE) convert notes that now hold take-back debt and equity that in the absence of an earnings call, our distressed strategist Ben Briggs (212-692-5123) spoke to SAVE management this week. He is available to provide you with a download of the conversation and his view on the situation – so please reach out to discuss.

Please reach out to Strategist Rob Weaver to discuss (332-227-5435 – rob.weaver@stonex.com)

6. Credit of Note:

Trimark (TMK Hawk Parent Corp - TRIMUS): Distributor of foodservice equipment and supplies, and provides construction management services

Recent events:

• 1/16/2024: Completed $300+mm equity rights offering with proceeds to reduce debt
• 11/07/2020: Primed lenders file a Complaint seeking a Declaratory Judgement (voiding the priming transaction) alleging multiple causes of action
• 9/14/2020: Management announced a priming transaction ($120mm of new money with a $307.5mm second out roll-up) priming non-group members and stripping their covenants

Considerations:

• The leading national distributor (and installer) of restaurant equipment in the US (national presence)
• Significantly reduced leverage (~$800mm) through recent $350mm equity rights offering and exchanges, Moody’s
• “Moody's expects the company to focus on improving earnings and cash flow under the ownership group”
• Valuation: attractive with TLs offered at $60

Concerns:

• Lower restaurant foot traffic may result in lower new restaurant construction and new equipment sales
• “TriMark USA, LLC has reported significantly negative free operating cash flow (FOCF) over the last two quarters.” Bloomberg, 8/26/24
• Business environment uncertainty-secondary impacts from tariffs  

We can provide you with access to Trimark’s financial information (under Confi)

 

Please reach out to strategist Ken Smalley to discuss (212-485-3570 – kenneth.smalley@stonex.com)

7. EU Credit:

European Credit markets started the week off firm but have then softened as the week has progressed- following global market trends.  Despite this, credit conditions still remain relatively robust nurturing the high levels of primary activity we have seen in the last couple of weeks.  On the macro front, a significantly weak GDP from the UK this week highlighted the fragility of Britain’s fiscal situation and demonstrates that the surge of 0.7% in the first quarter was a temporary rebound.  The print was a fall by 0.3% in April which is the lowest month-on-month drop since October 2023.

Primary activity was mainly skewed towards IG this week but nevertheless there was still a few deals of interest.  Mehilainen (AMBEAA) priced their €1.09bn 2-part offering with the 7NC1 FRN at Par paying €+337.5bps and the 7NC3 fixed tranche pricing at Par to yield 5.125%. Also, eDreams ODIGEO (EDRSM) priced its €375m 5.5NC2 SS Fixed deal at Par to yield 4.875% and Bausch + Lomb (BOL) have announced IPT on its €600m 5.5NC1 SS FRN 99.00 at €+425.0-450.0bps with pricing expected next week.  However, the main focus this week has been on Thames Water (THAMES) and TalkTalk (TALKLN).  Thames Water (THAMES) is said to need around £10bn to fix the company’s finances.  Creditors are looking to step in, and it has been said that a plan has been proposed which would include a major debt restructuring, including haircuts for senior and junior creditors and a £3-4bn equity injection.  This plan is under review by Ofwat; with failure risking a move into special administration. The desk traded some of the THAMES 0.875 30 into the close yesterday and continues to be active over the complex.  TalkTalk’s (TALKLN) bonds rallied around 9 points or so over a headline of a potential takeover from BT; however, they have now settled around 45.5/47.5 area, and we have been in touch with both sides.  Contact the desk if you are involved in these situations.  

 

In distressed news,  BayWa (BYWGR) has agreed to sell Cefetra for an equity value of €125 million with €100 million payable at closing and €25 million by end-2025. Including €61 million from shareholder loan repayments, total cash inflow will be about €186 million. The sale will also reduce BayWa’s bank liabilities by approximately €500 million through Cefetra's deconsolidation.  Also, KKR has agreed to hand over control of Selecta Group (SELENSW) to creditors under a restructuring deal that slashes over €1bn in debt and injects €330m in new funding. The creditor group—holding most of the 1L and 2L debt—will take control through a new entity, with junior creditors gaining majority equity.  1L holders outside the group face weaker terms and reduced influence, as the deal favors insiders with greater control over future amendments. 

8. Asia Credit:

Asia IG: What a messy day with what was supposed to be a risk on Asia turning into a risk off one early morning with the Israel/Iran situation. Credit spreads did improve later today with dip buyers coming in, ending the day around up to 3bp wider. In the afternoon, surprisingly things were much quieter with no further selloff. All eyes will be on Israel/Iran over the weekend. Asia S43 5y CDS ends the day at around +77 (+3).

Asia HY: Quieter afternoon vs more action in the morning, we continue to see buyer in Macau Gaming (Wynmac/Mpel). We also saw buyers in MEDCIJ for Indo HY and two way in TAIFNG new issue AT1.