StoneX Leveraged Finance Commentary - 246th Edition - 6/21/2025

June 21^st 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: Michaels Companies (MIK), Aventiv (SECRUS), Allen Media (ALNMED), Del Monte Foods (DELMFD)
2. Private Equity, Private Credit, and ReOrg: Learfield (LEACOM), Audacy (CBSR), ASP MCS (MOSOSE), The Container Store (TCS)
3. U.S. Distressed: Echostar (SATS), Ardagh Group (AMPBEV/ARGID/ARDFIN), Urban One (UONE), New Fortress Energy (NFE)
4. U.S. High Yield: xAI Corp (XAICORP), JetBlue (JBLU), GFL Environmental (GFLCN), Waste Pro USA (WASPRO)
5. Converts: Groupon (GRPN)
6. Credit of Note: Michaels Companies (MIK)
7. Asia Credit: Alibaba (BABA), Meituan (MEITUA), Hyundai (HYNMTR), Kookmin Bank (CITNAT)

ATTACHMENTS

1. The CPI Mirage and the Miracle of Inflationary Growth from Global Macro Strategist Vincent Deluard (415-713-5205 – vincent.deluard@stonex.com)
2. StoneX Strategy: A Dovish Hold From the Central Bank from Senior Advisor Jon Hilsenrath (jon.hilsenrath@stonex.com) and Chief Market Strategist Kathryn Rooney Vera (305-913-9112 – kathryn.rooneyvera@stonex.com)

Data Releases	Date / Time (EST)	Survey	Actual
Empire Manufacturing	Mon (6/16) 8:30am	-6.0	-16.0
Retail Sales Advance MoM	Tues (6/17) 8:30am	-0.6%	-0.9%
Industrial Production MoM	Tues (6/17) 9:15am	0.0%	-0.2%
Housing Starts	Weds (6/18) 8:30am	1350k	1256k
Initial Jobless Claims	Weds (6/18) 8:30am	245k	245k
FOMC Rate Decision (Upper Bound)	Weds (6/18) 2:00pm	4.50%	4.50%
FOMC Rate Decision (Lower Bound)	Weds (6/18) 2:00pm	4.25%	4.25%
Leading Index	Fri (6/20) 10:00am	-0.1%	-0.1%
Existing Home Sales	Mon (6/23) 10:00am	3.95m	--
Conf. Board Consumer Confidence	Tues (6/24) 10:00am	99.0	--
New Home Sales	Weds (6/25) 10:00am	691k	--
GDP Annualized QoQ	Thurs (6/26) 8:30am	-0.2%	--
Personal Income	Fri (6/27) 8:30am	0.3%	--
Personal Spending	Fri (6/27) 8:30am	0.1%	--
Core PCE Price Index MoM	Fri (6/27) 8:30am	0.1%	--
Core PCE Price Index YoY	Fri (6/27) 8:30am	2.6%	--
U. of Mich. Sentiment	Fri (6/27) 10:00am	60.5	--

Source: StoneX Financial Inc., Bloomberg

LevFin Gainers				LevFin Decliners				Converts Gainers				Converts Decliners
Credit	Move	Current Px		Credit	Move	Current Px		Credit	Move	Current Px		Credit	Move	Current Px
SATS 6.625 26	12.50	72.75		NBR 8.875 31	(4.00)	77.00		EOSE 6.75 30	10.38	106.75		RUN 4 30	(27.50)	56.00
ACPROD 6.375 29	9.25	45.00		KOS 8.75 31	(3.75)	79.25		AAOI 2.75 30	6.38	87.88		SEDG 2.25 29	(16.25)	70.50
AMGENE 9.5 28	8.00	70.00		AFFGAM 6.875 27	(3.50)	65.00		GPRO 1.25 25	3.50	91.88		SRPT 1.25 27	(7.63)	82.25
DISH 7.75 26	7.75	86.00		SAVE 11 30	(3.25)	73.00		FLNC 2.25 30	3.38	58.50		BTDR 5.25 29	(7.13)	103.38
SATS 6.75 30	4.75	90.50		KOS 7.75 27	(2.75)	90.63		LCID 5 30	2.25	94.75		JBLU 2.5 29	(5.88)	91.50

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}	304	308	(4)	7.35	7.42	(0.07)
BB {I00182US Index}	185	183	2	6.18	6.18	0.00
B {I00185US Index}	297	295	1	7.33	7.33	(0.01)
CCC {I00188US Index}	695	716	(21)	11.08	11.38	(0.30)

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 $291mm vs $354mm of inflows the previous week.  The new issue market was busy again and ended the week strong with the $5bn xAI deal. The desk was active in Michaels Stores (MIK) and closed as a seller.  The Aventiv (SECRUS) bid improved, and the desk closed looking for an offering.  We have had several accounts asking about Allen Media (ALNMED) as the lenders are mostly co-op’d now. Please show offers. If you are looking for deep distressed offers, the desk has some supply of Del Monte (DELMFD) and Container Store (TCS).  Lastly, the desk closed as a buyer of all flavors of McDermott (MDR).

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)

We traded Learfield (LEACOM), leaving us a buyer on the follow.  Audacy (CBSR) was active as we are in touch with supply. ASP MCS (MOSOSE) came up a few times – please reach out if you are involved.  The desk closed two-sided on The Container Store (TCS).  We had a soft offering of Loyalty Ventures (LOVEIN) and are looking for more litigation plays. Lastly, we had some inquiry on Resolute (AMBEA).

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 Internation (EAGRUY), Emergent BioSolutions (EBS), Endo (ENDP), Evergrande (EVERRE), Exela (EXLINT), First Republic (FRCB), Graftech Global (EAF), Guitar Center (GTRC), Hertz (HTZ), 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), Urbane One (UONE), Vericast (VERCST), Veritas (VERITS), WeWork (WEWORK), WW International (WW), Zayo (ZAYO)

 

The distressed market remains focused on the "problem" names as we approach the end of June. The Echostar (SATS) cap stack remains active after news came out last Friday that President Trump is urging Charlie Ergen and the FCC to cut a deal to avoid a major US bankruptcy. The SATS 10.75 29 closed the week 7-8pts higher. The biggest move in the cap stack was the SATS 6.625 26, trading up 12pts to close in the 70-71 context. We will be following the situation closely as we approach the end of the grace period on the SATS 10.75 29, set to expire on June 30th. Ardagh Group (AMPBEV/ARGID/ARDFIN) was topical as Coulson is nearing a deal to hand creditors full control of Ardagh SA. The ARDFIN 6.5 27 were active this week in the 4-7 context. Our strategist Ken Smalley knows the credit well and is available to discuss potential outcomes. The desk remains axed and trading the Urban One (UONE) 7.375 28. Trading paper in the 53-54 context early in the week and leaving us a buyer at the time. Strategist Ben Briggs follows the name and is available for discussion. New Fortress Energy (NFE) remains topical with bonds displaying volatile price action in the end of the week. The NFE 6.5 26 traded as low as 35 on Weds, then rebounding +10pts to close in the mid-40s after the company announced a delayed filing of their 10Q.

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 high yield sector was fairly resilient this holiday-shortened week in light of the hostilities in the Mideast and Powell’s statements about the upcoming inflationary effects of tariffs that he expects to be evident this summer.  HY OAS ended the week at +304; YTW 7.35%.  Lipper reported a $356.3mm inflow for the week ending Wednesday (the 8^th straight week of positive flows).  In the primary market, ~$6B was priced through Wednesday. On Friday, xAI Corp (XAICORP) priced their highly anticipated $3B 5y notes with a 12.5% coupon, 50bp wide to initial price talk.  The energy sector continued to be well bid as WTI traded up above $75.  Energy spreads (I00459US) ended the week at +313. We are keeping a watchful eye on JetBlue (JBLU) secured 9.875 ’31 (95.625, 10.85%, B1/B+), down 3 points over the course of the week.  JBLU announced a series of cost-cutting measures including reducing flights, pausing equipment upgrades, and parking some of the fleet in response to weaker demand (May airfares -7.3% YoY)  in the summer travel season.  Canadian waste management/recycling firm GFL Environmental (GFLCN) secured 6.75 ’31 (104, 5.49%, Ba3/BB) are trading at a 3-month high after they announced a possible sale of their infrastructure division, valued at $3.7B. Currently trading at a spread of +150, the notes appear fully priced. It may make sense to trim positions and look at  other paper in the sector to take out $ and pick up yield. For example, Waste Pro USA (WASPRO) 7 ’33 (102.5, 6.36%, B3/B-) or Reworld Holding (CVA) 5 ’30 (94, 6.37%, B3/B). In the healthcare REIT space, the desk is axed as a buyer of Medical Properties Trust (MPW) 5 ’27 (90.25, 9.81%,  Caa1/CCC+).  Finally, we are always axed to provide liquidity in all YTC and YTT names with block bids; Unisys being one we traded in size this  past week.  Please reach out for current situations and levels.

 

Adam Rosenblum – High Yield Trader

Andrew Baigorria – Trading Associate

5. Converts:

Bonds Traded This Week: ABNB 0 03/15/26, AXON 0 ½ 12/15/27, CDLX 1 09/15/25, EGHT 4 02/01/28, MODG 2 ¾ 05/01/26, PCT 7 ¼ 08/15/30, and PMT 8 ½ 06/01/29

Groupon, Inc. (GRPN) Exchanged $170M Of 2026 And 2027 Notes For $244M Of New 2030 Convertible Notes With 50% Premium Conversion Price

GRPN axed all 3

• GRPN 1 ⅛ 03/15/26 99.25 seller
  • 164/60 pairing .7 years left
  • $33mm deal size
• GRPN 6 ¼ 03/15/27 v 36.03 142.75 buyer, in. after the exchange of the 4.875%
  • 50/300 pairing
  • 1.7 years to maturity ~75d
  • $47mm deal size
• New GRPN 4 ⅞ 06/30/30 trade here leaves v 36.035 103.75-104.75
  • 50/722 pairing 5 year paper 70d
  • $244mm deal size

 

Balance Sheet @ 1Q and PF:

Cash:                             $226.8    

Debt:

Cvt 6.25% 3/27            $197.3     (150)          47.3   

Cvt 0.125% 3/26              53.7       (20)          33.7

Cvt 4.875% 6/30                            244.1      244.1  

  Total Debt                   $251.0        74.1    $325.1

Mkt cap:                                                      1,450.1

New Cvts:

• Unsecured
• Maturity 6/30/2030
• CV Price $54.04, 50% premium to close
• Unregistered tranche $31.37 / CUSIP 399473AJ6
• Registered trance $212.7  / CUSIP  399473AK3
• Use GC / 600 and 55 vol = 110.7 price

Existing 2026 Cvt: Par for Par exchange

Existing 2027 Cvt

• $150mm olds for $224.071news  = 147.7 price ex accrued on par value.
• Security stripped by 76% of holders vote. Additionally substantially all restrictive covenants eliminated.

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

6. Credit of Note:

Michaels Companies (MIK): Largest Arts & Crafts retailer in North America based on store count with 1,368 stores as of 2/1/2025 located in 49 states & Canada. The majority of sales come from Core Arts & Crafts, with the remaining revenue coming from Seasonal items and Custom & Ready Made Framing

• In June 2025 MIK acquired the IP & private label brands of JOANN out of bankruptcy
• In May 2025 it was reported that creditors have engaged Davis Polk as legal counsel and Lazard as financial advisor amid the trade war
• In April 2025 Nick Bertram was named President & COO
• In Feb 2025 David Boone was named CEO
• MIK was taken private by Apollo in 2021 for ~$5B (~6.0x Adj EBITDA at the time of $831MM)

Link to release: https://www.apollo.com/insights-news/pressreleases/2021/03/the-michaels-companies-enters-into-a-definitive-agreement-to-be-acquired-by-funds-managed-by-apollo-global-management

FY24 Highlights:

• Revenue was essentially flat adjusted for a 53rd week in FY23, driven by SSS decline which was offset by increased store count
• 2H24 SSS were nearly flat driven by improvement in the core business and continued strength in seasonal assortments
• Adj EBITDA was down slightly driven by the lower sales and a decrease in gross margin, partially offset by lower SG&A
• Continued to generate material FCF
• After the end of the quarter amended & extended the revolver to a 2029 maturity, from a 2026 maturity
• Leverage sits in the mid-single digits while the create through the 1L part of the stack is in the low single digits at our ~77 offer
• The company is private but we can direct you on how to request access to financials 

 

Please reach out to Strategist Ben Briggs to discuss (212-692-5123 - ben.briggs@stonex.com)

7. Asia Credit:

Another wave of risk off sentiment sweeps through Asia afternoons due to the Middle East tensions and possible US participation. Credit spreads are around 2-4bp wider with names such as BABA, MEITUA, HYNMTR, CITNAT, BMRIIJ, BBLTB and TOPTB getting hit going out. HYNMTR 2y FRN which was outperforming earlier ends the day unch. Asia IG 5y CDS is +81 (+3) at Asia close.

Quiet session today though more active in the afternoon. We saw buyers on NWDEVL 27s and two way in NWDEVL 6.15 perp and sellers of SJMHOL 28. China Property wise we saw LNGFOR and VNKRLE 27s buyers and VNKRLE 27s seller. We also saw a small buyer in BUMAIJ today.