: StoneX Leveraged Finance Commentary - 243rd Edition - 5/31/2025

May 31^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: Baymark (BAYMHS), Lakeshore Learning (LAKINT), Aventiv (SECRUS), Century Casino (CNTY)
2. Private Equity, Private Credit, and ReOrg: Cineworld (CINELN), Audacy (CBSR), Loyalty Ventures (LOVEIN), Men's Wearhouse (TLRD)
3. U.S. Distressed: Saks Global (SAGLEN), EchoStar (SATS), Urban One (UONE)
4. U.S. High Yield: Strathcona Energy (STRCNA), MEG Energy (MEGCN), NGL Energy Partners (NGL), JetBlue (JBLU)
5. Credits of Note: Nutrisystem, Inc./Wellful (KNSACQ), Saks Global (SAGLEN)
6. EU Credit: Commerzbank (CMZB), Eurobank (EUROB), ABN AMRO Bank (ABNANV), HSBC (HSBC) 
7. Commodities: Copper, Steel, Met-Coal, U.S. Steel (X)

ATTACHMENTS

1. The Cancellation of Recessions from Global Macro Strategist Vincent Deluard (415-713-5205 – vincent.deluard@stonex.com)
2. StoneX Strategy: US Inflation – Good News in the Short-Run, and the Challenges in the Long-Run 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
Conf. Board Consumer Confidence	Tues (5/27) 8:30am	-7.8%	-6.3%
GDP Annualized QoQ	Thurs (5/29) 8:30am	-0.3%	-0.2%
Personal Income	Fri (5/30) 8:30am	0.3%	0.8%
Personal Spending	Fri (5/30) 8:30am	0.2%	0.2%
Core PCE Price Index MoM	Fri (5/30) 8:30am	0.1%	0.1%
Core PCE Price Index YoY	Fri (5/30) 8:30am	2.5%	2.5%
MNI Chicago PMI	Fri (5/30) 9:45am	45.0	40.5
U. of Mich. Sentiment	Fri (5/30) 10:00am	51.5	52.2
S&P Global US Manufacturing PMI	Mon (6/2) 9:45am	52.3	--
Factory Orders	Tues (6/3) 10:00am	-3.1%	--
ISM Services Index	Weds (6/4) 10:00am	52.1	--
Trade Balance	Thurs (6/5) 8:30am	-$90.0b	--
Change in Nonfarm Payrolls	Fri (6/6) 8:30am	235k	--
Unemployment Rate	Fri (6/6) 8:30am	4.2%	--

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
SAGLEN 11 29	9.88	45.75		NOVA 5.875 26	(8.88)	23.00		PCT 7.25 30	6.88	101.25		WULF 2.75 30	(3.13)	74.00
AMGENE 9.5 28	7.00	65.00		SATS 6.625 26	(6.38)	70.50		INDI 3.5 29	4.50	74.25		NIO 3.875 29	(2.88)	72.63
KIKCN 10.75 32	5.13	66.75		SATS 10.75 29	(5.00)	100.75		PRCH 0.75 26	3.50	94.88		RIVN 3.625 30	(2.88)	95.38
WTI 10.75 29	5.13	86.50		SATS 6.75 30	(3.38)	86.00		INDI 4.5 27	2.88	83.88		SMLR 4.25 30	(2.50)	82.00
COMM 7.125 28	4.75	96.00		CLF 7.375 33	(2.88)	87.38		HLF 4.25 28	2.88	87.75		REAL 1 28	(2.25)	77.38

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}	311	330	(20)	7.46	7.69	(0.23)
BB {I00182US Index}	187	202	(15)	6.24	6.42	(0.18)
B {I00185US Index}	302	324	(22)	7.40	7.66	(0.26)
CCC {I00188US Index}	680	714	(33)	11.06	11.43	(0.37)

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 $295mm vs. $254mm of inflows the previous week. The desk has a few project axes that we think are interesting such as Baymark (BAYMHS) and Lakeshore Learning (LAKINT).  We have strategist coverage on both and can provide a confi for our data room. The desk traded more Aventiv (SECRUS) 4th out, and it left us a buyer on the follow. Century Casino (CNTY) was an active name for us, and we closed the week as a seller. Allen Media (ALNMED) was topical as a new co-op formed. We are a buyer. Pathway Vet (PATV) was a new name for the desk.  Please reach out if you are involved. Nutrisystem (KNSACQ) was a top name since we are in touch with both sides; we rounded out the week as a size buyer. Lastly, we closed as a seller of some of the Del Monte (DELMFD) Tranches.

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)

Cineworld (CINELN) was a new name for the desk, and we closed in touch with supply.  Audacy (CBSR) was a top name as we had supply to move. Loyalty Ventures (LOVEIN) stubs were topical on the back of new filings.  Ken Smalley covers LOVEIN for us. The desk is a buyer of Men's Wearhouse (TLRD). Please show offers.

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), 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), Urbane One (UONE), Vericast (VERCST), Veritas (VERITS), WeWork (WEWORK), WW International (WW), Zayo (ZAYO)

 

Volumes this week were focused on Saks Global (SAGLEN) and EchoStar (SATS). The SAGLEN 11 29 (45.75, 36.17%, B3/B) continue to trade actively as we approach the June 30th coupon payment, the earnings release on Friday, and the company securing $350mm in financing. Our Strategist Ben Briggs follows the name for us and is available to compare notes. Another topical name of the week was the SATS 10.75 29 (100.75, 10.48%, Caa1/B) after the company released an 8K stating that they are skipping the coupon payment and entering the grace period – citing uncertainty with the FCC investigation over their 5G buildout. Paper now trades flat with all distributions going to buyer. We will be watching this one closely for further developments. Finally, the desk was axed in the Urban One (UONE) 7.375 28 (50.00, 39.22%, Caa2/CCC+). Our strategist Ben Briggs follows this one closely.

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 remained firm this week, capping a month of solid gains.  HY OAS ended at +311; YTW 7.44%, at a 2-month low.  Lipper reported a modest $243mm inflow for the week ending Wednesday, down from the $1.16B inflow of the previous week.  Energy spreads tightened 10bp to +423, but we will keep an eye on today’s OPEC+ meeting as they have indicated further production hikes for the month of July.  WTI closed just above $60.  In the space, Strathcona Energy (STRCNA) 6.875 ’26 (100.5, 3.72% YTW/6.51% YTM, B3/BB-) launched a hostile takeover offer for MEG Energy (MEGCN) 5.875 ’29  (99.5, 5.95%, B1/BB-).  MEGCN has been a solid ‘sleep-safe’ name with leverage ~1x.  This development adds the possibility of a 101 change of control if STRCNA is successful.  NGL Energy Partners (NGL) released solid Q4 earnings this week featuring a 6% gain YoY in EBITDA.  We remain constructive on the NGL 8.125 29 ( 97.25, 9.11%, B2/B+) and the NGL 8.375 ’32 (94.125, 9.69%, B2/B+). Please reach out to Strategist Ken Smalley for more details on this opportunity.  $2.45B in primary issuance this week added to the impressive $33.65B MTD total, over 4x the pace from the previous month. JetBlue’s (JBLU) secured 9.875 ’31 (98.75, 10.15%, B1/B+) rose 3 points this week following their announced partnership with United Airlines (UAL), allowing customers to book flights and share loyalty points. Additionally, JBLU & UAL get access to each other’s slots at JFK and Newark. In the TMT space, CommScope (COMM) secured 9.5 ’31 (104, 7.78% B3/B-) raised the possibility of the sale of its CCS broadband business (or potentially the whole company) in an effort to repay debt. Ken Smalley also covers COMM and is available to discuss recent developments. Recent fallen angel Nissan (NSANY) 4.81 ’30 (92.5, 6.51%, Ba1/BB) announced their intention to raise $7B through debt and asset sales in an attempt to shore up their financial position.  NSANY has already stated their planned elimination of 20k jobs and the closure of 40% of their plants within the next 3 years. Currently trading at +250,  it may make sense to trim positions ahead of possible tariff related headwinds that NSANY may begin to feel this coming month.

 

Adam Rosenblum – High Yield Trader

Andrew Baigorria – Trading Associate

5. Credits of Note:

Nutrisystem, Inc./Wellful (KNSACQ): provider of health and wellness products (weight loss management, vitamins, and supplements). Brands include Nutrisystem, Jenny Craig, Doctors’ Preferred, NUGENIX, Instaflex, PEPTIVA, Lumiday, LifeBiome, Dr. Sinatra.

Considerations:

• Growing Vitamins and Supplements segment organically and through acquisition
  • Growing market for Supplements
• Supportive Sponsor
• Valuable DTC Platform and retail network

Concerns:

• Competition across all segments particularly in weight management
  • Most competitors suffering on top line partially driven by the approval of GLP-1 receptor agonists (Ozempic, Wegovy, Saxenda, etc.) for weight loss

Nutrisystem is private - we can provide access to the company’s financial information.

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

 

Saks Global (SAGLEN): Selected summary FY24 non-GAAP results were released Friday morning. A call, with no Q&A, was held later in the morning on which management stated that more detailed financials would be released later in the day; however, these results were not available as of this writing.

The results below are for the combined credit group of Saks and Neiman Marcus, and do not include saksoff5th.com which operates outside of the group.

• Revenue was down y/y; however gross margin improved due to lower promotion activity
• Adj EBITDA for FY24 was provided, however no prior year Adj EBITDA for the combined entity was available for comparison
  • Using the provided FY24 EBITDA and debt pro-forma for new financing announced this past Thursday (discussed below), leverage appears to remain highly elevated
• After the end of the quarter on 5/29/2025, the company announced $350MM of additional financing comprised of a $300MM FILO and a $50MM TL. The FILO was incurred as an incremental facility under the company's existing $1.8B ABL facility. The new financing is expected to close by 6/30/2025
  • The company reports ~$700MM of liquidity, pro-forma for the new debt

Call Highlights (no Q&A):

• Primarily read the financials & highlighted that they have identified additional synergies
• Seeing improvement in revenue per visit to their website
• Believes their business is well positioned for tariffs as much of their inventory is European-sourced versus competitors
• Forecasts price increases for certain items in-line with luxury brands

Financials are private and limited information is available in the data room, however we have had some conversations on the situation and Strategist Ben Briggs is available to discuss (ben.briggs@stonex.com – 212-692-5123)

 

6. EU Credit:

European Credit markets have remained resilient over the course of the week despite fluctuations in broader markets.  Spreads have been falling since the postponement of 50% tariffs on the EU until 9^th July which has seen the iTraxx Crossover around 300bps for the course of the week. A 2.1% inflation print from Germany today is slightly above consensus but still falls close to 2% guidance from the European Central Bank.  A UK bank holiday on Monday and Ascension day on Thursday have caused disruptions to the week which has meant flow has been slightly muted.  

Primary activity was dominated with Fins issuance this week with a lot of deals pricing at the start of the week.  Of note, Commerzbank’s (CMZB) €750m PerpNC8 AT1 was this week’s most subscribed deal. Whilst later in the week, Eurobank (EUROB) and ABN AMRO Bank (ABNANV) priced deals with the former coming with a €500m PerpNC6 AT1 at 6.625% and the latter pricing a €1bn 4Y Green SP deal at MS+65, the desk has been active in both this week.  Late yesterday, HSBC (HSBC) priced their $2bn PerpNC5.5 AT1 at 7.05% which the desk managed to trade in the grey.  In IG corps, Deutsche Post (DHLGR) came with a €900m 7Y deal at MS+83, Mercedes-Benz (MBGGR) priced their €1.15bn debt offering in 2 parts with the €650m 3.25Y at MS+55 and the €500m 6.25Y fixed deal at MS+90.   There have been no HY/distressed deals this week. 

Elsewhere, in REITs, a name we have had a block axe in has been Samhallsbyggnadsbolaget (SBBBSS) which has entered into an agreement to divest some properties to a North American pension fund and most of the proceeds from the sale will be used to reduce SBB’s debt through repayment.

The desk has also been active in the European satellite space and managing to trade some SES (SESGFP) hybrids. The company has had their $3.1bn acquisition of Intelsat (INTEL) cleared by the UK’s competition regulator, now creating a satellite giant that will be better positioned to compete with Elon Musk’s Starlink.

In distressed news, Thames Water’s (THAMES) financial rescue is entering a critical phase, with bidders negotiating creditor losses and the utility’s future. Talks are expected to continue through June, aiming for a summer deal. KKR’s proposal includes wiping out £3 billion in junior debt and a 25% haircut—around £5 billion—for senior creditors. Without a deal, Thames could enter special administration, a state-run insolvency process for essential services.  Altice France (SFRFP), another name we've been active in recently, has reached an agreement with the majority of its revolving credit facility (RCF) lenders on a comprehensive refinancing transaction. The company is also pursuing accelerated safeguard proceedings, with the aim of closing the deal by October.

7. Commodities:

COPPER:  Been getting some bullish headlines of late (IVN CN issues in DRC, lower inventories, higher cxld warrants, US court rejecting tariffs)….offset by Trump headlines this morning that China is essentially back in the penalty box (which brought everything lower).  Oddly LME Copper has been more or less range bound during all of this….trading in a +/- 1% range since May 6th vs COPX (Global copper ETF) +7% in the same time frame.  Sentiment via recent conversation certainly feeling much more bullish vs 3-4 weeks ago, but Trump doing a 180 on China this morning may change that.  Remain in the camp with the U.S. courts intervening with tariffs, Trump “may” try to fast track some more Section 232/301 tariffs as it relates to copper.  FCX would be the main beneficiary there….and as a friendly reminder FCX only +2% YTD vs Comex Copper +16% and Gold +25% YTD.  Granted FCX with their own issues...but that feels baked in for the most part.

 

STEEL:  Platts US HRC spot assessment down -$20 overnight to $840/st.  Continue to hear anyone looking for a larger order (+2-3k tons) can get it with no problem well under $800.  Keep in mind Platts is merely playing catch-up to US HRC futures of late…with June futures at $831 this morning, July @ $805, and Aug-Oct below $800.  So could argue this is already reflected.  NUE dropped their weekly US HRC price to $870 on Monday (their 5th consecutive weekly price cut)….so wouldn’t be shocked to see another price cut from them on Monday morning.  CLF sentiment (and positioning) about the worst I’ve seen it since COVID….just a matter of where and when the shorts feel comfortable covering.

 

MET-COAL:  Down -$4.30 overnight to $191.00 (Platts FOB Aust).  Reports that China purchased 75k mt of PLV from Australia @ $190 this morning. With China issuing coke price cuts of late, coupled with Chinese HRC sitting at 9-month lows this morning….hard to get bulled up from my seat despite some recent supply disruption.  HCC is a name that has held up well of late (only down -14% YTD vs AMR down -42% YTD).  Clearly guys are pairing those 2 names up (with some using BTU as well).  So in scenarios like this with HCC O/P AMR by +28% YTD…I’d be looking to go after HCC on the short side here for a trade.  I think HCC may retest $40 ($46.31 last)…for a ~13% gain.

STEEL (X):  Reminder that Trump is heading to PA this afternoon to announce the Nippon/X deal (scheduled for 5PM EST).  With X trading up at $53/share this morning (vs the $55/share bid)…am I the only one a little nervous heading into this afternoon?  Reminder we haven’t got much in terms of details around the deal, nothing has been officially signed, some of the unions are still against it, and we aren’t sure Nippon will grant the U.S. Govt these “Golden Shares” Trump keeps touting.  Look, I’M NOT suggesting the acquisition doesn’t go through (by the way…we can all agree this is an acquisition, not a “partnership” right?)…just suggesting EVERYTHING needs to go right with this announcement based where X is currently trading at.  So if long X here…maybe think about either trimming some here, or at bare minimum buying some protection?  Maybe some June 6th $50 PUTS for $1.00? Just me thinking out loud here.

Michael Lovecchio (347-268-1509 – michael.lovecchio@stonex.com)