StoneX Leveraged Finance Commentary - 244th Edition - 6/7/2025

June 7^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: Hubbard Radio (HUBBRO), Audacy (CBSR), Nutrisystem (KNSACQ), Century Casino (CNTY)
2. Private Equity, Private Credit, and ReOrg: Travelport (TPORT), Bioplan (TRIHOL), Cineworld (CINELN), Tortoise Investment (TORINV)
3. U.S. Distressed: Echostar (SATS/DISH), Spirit Airlines (SAVE), QVC Inc (QVCN), Urban One (UONE)
4. U.S. High Yield: Venture Global (VENTGL), Geo Group (GEO), CoreCivic (CXW), Owens & Minor (OMI)
5. Converts: PureCycle Technologies (PCT)
6. Credit of Note: Cooper Standard (CPS)
7. EU Credit: Forvia (EOFP), ZF (ZFFNGR), Clarios (POWSOL), SES (SESGFP)
8. Asia IG: HSBC Holdings (HSBC), Sumitomo Mitsui Trust Bank (SUMITR), FEC Finance (FAEAC), West China Cement (WESCHI)
9. Commodities: Steel and Ali, Met-Coal, Nippon/X

ATTACHMENTS

1. The E.W. Scripps Company (SSP) from Strategist Ken Smalley (212-485-3570 – kenneth.smalley@stonex.com)
2. MAGA’s War on Corporate America from Global Macro Strategist Vincent Deluard (415-713-5205 – vincent.deluard@stonex.com)
3. StoneX Strategy — Structural Repricing, Rotation, and Global Risk Themes 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
S&P Global US Manufacturing PMI	Mon (6/2) 9:45am	52.3	52.0
Factory Orders	Tues (6/3) 10:00am	-3.2%	-3.7%
ISM Services Index	Weds (6/4) 10:00am	52.0	49.9
Trade Balance	Thurs (6/5) 8:30am	-$66.0b	-$61.6b
Change in Nonfarm Payrolls	Fri (6/6) 8:30am	126k	139k
Unemployment Rate	Fri (6/6) 8:30am	4.2%	4.2%
CPI MoM	Weds (6/11) 8:30am	0.2%	--
CPI YoY	Weds (6/11) 8:30am	2.5%	--
PPI Final Demand MoM	Thurs (6/12) 8:30am	0.2%	--
U. of Mich. Sentiment	Fri (6/13) 10:00am	52.4	--

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
BORRNO 10.375 30	6.88	86.13		SATS 6.625 26	(12.63)	62.50		KPTI 3 25	19.50	94.25		SMLR 4.25 30	(6.25)	75.88
OMI 6.625 30	6.25	91.50		DISH 7.75 26	(7.75)	78.50		RUN 4 30	7.63	76.75		OPEN 7 30	(4.75)	80.75
CLF 7.375 33	5.75	91.50		SATS 5.25 26	(6.75)	85.88		ESPR 5.75 30	7.38	85.00		RIVN 3.625 30	(3.63)	90.50
NBR 8.875 31	5.63	74.25		SAGLEN 11 29	(6.63)	40.75		IREN 3.25 30	5.13	88.75		LCID 5 30	(3.00)	93.63
CLF 7 32	5.50	91.50		NOVA 11.75 28	(6.50)	20.50		EVH 3.5 29	2.88	81.50		CDLX 1 25	(2.75)	93.38

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}	309	315	(6)	7.42	7.46	(0.04)
BB {I00182US Index}	180	191	(12)	6.14	6.24	(0.10)
B {I00185US Index}	295	301	(7)	7.32	7.35	(0.03)
CCC {I00188US Index}	715	700	15	11.36	11.20	0.16

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 $44mm vs. $295mm of inflows the previous week.  The new issue market was very active with eleven deals priced on Thursday alone. The desk was active in the radio space starting with Hubbard Radio (HUBBRO), a new name for us. We closed in touch with both sides.  The desk was also active in Audacy (CBSR) and ended the week as a seller.  Nutrisystem (KNSACQ) was a top name for us as we have traded it several times recently and closed axed. Century Casino (CNTY) is worth considering if you have gaming capacity.   Ken Smalley covers KNSACQ and CNTY for us.  Delivery Hero (DEHEHO) came up a few times, and we closed the week as a size buyer.  Please show offers. The desk had several accounts confi on Lakeshore Learning (LAKINT), and they like what they see so far.  Ben Briggs covers LAKINT for us if you want to compare notes.

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 is a seller of Travelport (TPORT) - now is the time to act with the trading/transfer window open.  We were active in Bioplan (TRIHOL) last week and closed axed.  Cineworld (CINELN) continues to percolate.  Let us know if you are involved. The desk would like to see Tortoise Investment (TORINV) offers.  Lastly, we closed as a buyer of Cirque Du Soleil (CIRQUE). Ben Briggs covers CIRQUE for the desk.

Doug Gervolino – Loan & ReOrg Equity Trader

3. U.S. Distressed:

AXED: Akumin (AKUCN), AMC Entertainment (AMC), Brightline East (BRIEAS), CEC Entertainment (CEC), 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), Urbane One (UONE), Vericast (VERCST), Veritas (VERITS), WeWork (WEWORK), WW International (WW), Zayo (ZAYO)

 

Echostar (SATS/DISH) continues to be in focus as the company announced they were also entering the 30-day grace period on their DISH 5.25 26, DISH 5.75 28, and the DISH 5.125 29. Again stating the uncertainty in their future prospects over the FCC investigation. We will continue to follow this one closely. Spirit Airlines (SAVE) released their earnings at the end of last week. Strategist Ben Briggs follows SAVE for us. Results were disappointing; however, those who follow the credit had low expectations going into the release. Some highlights include: Revenue was down 20% y/y driven by lower traffic, Adj. EBITDA (SNEX calculated) was $(221)mm vs. $(94mm) in the year ago period, and they burned $221mm of FCF during the quarter. The SAVE 11 30 were active in the mid-70s context this week, down following the earnings. The desk was axed in the QVC Inc (QVCN) cap stack late in the week; we can provide two-way liquidity in the QVCN 6.875 29. Strategist Ken Smalley follows the name, please reach out if you would like to compare notes. The desk was active and traded both the Urban One (UONE) 7.375 28 in the 50-51 context, and the Cooper Standard (CPS) 5.625 27 in the 85.5-86.5 context. Strategist Ben Briggs follows both UONE and CPS for us.  

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 stayed in the green for a second week, recording gains every trading day since last Wednesday.  HY OAS tightened 2bp to +309; YTW 7.42%, setting a new 2-month low.  Lipper reported a solid $1.5B inflow for the week ending Wednesday (the 6^th straight week of positive flows), eclipsing the $243mm inflow of the previous week. Energy spreads tightened 37bp to +386; WTI closed above $64 supported by optimism in China trade negotiations and better than expected jobs data on Friday.  In the energy sector, Venture Global (VENTGL; equity ticker VG)  secured 3.875 ’33 (86.5, 5.94%, Ba2/BB+)  gained  2 points after getting FERC approval to begin construction of their planned CP2 LNG export facility.  Upon completion, VG will become the largest LNG exporter in the US and the 2^nd largest in the world.  In the private corrections space, Geo Group (GEO) 8.625 ’29 (105.5, 6.48%, B1/BB) announced the sale of their Lawton facility in Oklahoma for $312mm.  The sale will reduce leverage to ~3.1x, and the sale price gives an implied value of $130k/bed, and a value of $6.8B to GEO’s facilities.  We remain constructive on GEO, as well as peer credit CoreCivic (CXW) 8.25 ’29 (105.375, 6.16%, Ba2/BB-).  Strategist Ben Briggs covers both GEO and CXW and can discuss the latest developments and opportunities in detail.  In healthcare, Owens & Minor (OMI) announced the redemption of their secured $1B 10’30 notes issued in April after they terminated their acquisition of Rotech Healthcare.  Unsecured OMI 6.625 ’30 (91.5, 8.83%, B2/B) rose 7 points in response to the removal of the secured debt. The primary market was active this week, with over $13B in new deals priced (the most in the last two years).  

 

Adam Rosenblum – High Yield Trader

Andrew Baigorria – Trading Associate

5. Converts:

Bonds Traded This Week: AAL 6 ½ 07/01/25, AXON 0 ½ 12/15/27, CRNC 1 ½ 07/01/28, FSLY 0 03/15/26, LCID 1 ¼ 12/15/26, LIF 0 06/01/30, GRPN 6 ¼ 03/15/27 , LCID 1 ¼ 12/15/26, MCHP 0 ¾ 06/01/30, PMT 8 ½ 06/01/29, and WOLF 1 ¾ 05/01/26

PureCycle Technologies, Inc. (PCT 7 ¼ 08/30)
- PCT 7 1/4 08/15/30 v 9.93 103-104 actively traded here
Profile:  6.44% ytm in 5.2 years, puttable in 2.2 years. Soft callable in .25 years though stock price higher, >$19.26 with a premium of 55%

Description:

PureCycle Technologies, Inc., holds a license from The Procter & Gamble Company (P&G) for a solvent-driven plastic purification recycling technology. The license was secured in 2019 with a $2.0mm royalty prepayment on future sales. PureCycle is seeking to prove out the technology with a newly built facility in Ironton Ohio. After multiple delays, the facility is currently operational, they are keeping production well below capacity to match anticipated commercial sales, while working on improving the operating rates, reliability and product quality. During 2024, they began blending their produced resin with either post-industrial recycled material or virgin polypropylene, which is expected to improve product consistency and accelerate the product delivery to customers. In 1Q25, they reported their first sales of approximately $1.6 million. Numerous customer trials are on-going.  The company is also in the pre-constructions stages of developing a larger facility in Augusta, Georgia.

 

Pros:

• Market cap and stock performance.
• Continued credit support from largest equity holder.
• Likely operational support from the plastic industry.

 

Cons:

• Technology is still not proved. Note low price that they paid for it.
• Actual product and sales are very modest.
• Continued high burn.
• Expensive funding.

 

Liquidity:

• $22.5mm in cash and $15mm in restricted cash.
• 1Q Burn $54mm
• $200mm revolver provided by largest shareholder. Undrawn, current maturity Sept 2026, S+17.5% rate.
• Company has $99.0 million of previously repurchased Revenue Bonds that it has been remarketing to outside and related investors at prices in the 80’s. Most recent transaction in April 2025, when the company sold $11.8 million par to a related party at 88 for net proceeds of $10.4 million.

 

Balance Sheet @ 1Q:

Cash:                                  $22.5

Debt:

$200mm Rev                     Undrawn    S+17.5%, current maturity 9/26 (multiple extensions)

Equipment Finance          $18.4

Revenue Bonds                   31.4          Interest at 7%. Amort begins in 2031.

Other debt                             9.7

Related Party Bonds        105.8           Interest rates 6.5% to 13%. Currently amortizing through 2042.

Cvt 7 ¼ 08/15/30              250.0          $50mm held by related party.

  Total Debt                         $415.3

Mkt Cap:                         $1,785.7

• Consensus 2025, 2026 FCF Burn $130mm, $204mm

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

6. Credit of Note:

Cooper Standard (CPS): CPS 1L 13.5 27  -106 

• Some highlights on the yields in the 1L part of the structure (all illustrative):
  • 9.78% yield to a 12/1/2025 take out (at 104.5 call px)
  • 7.30% yield to a 2/1/2026 take out (steps down to a 102.25 call px on 1/31/2026)
  • 9.20% yield to a 6/1/2026 take out (at 102.25 call px)
  • Negative ~43% YTW displayed by default on Bloomberg is to a 6/17/2025 takeout (11 days from today) which is highly unlikely
• At $218MM (mid of FY25 EBITDA guide), you are creating the company at ~2.5x through the 1L notes and under 4x through the 3L notes
• We expect a straightforward refi process in late 2025/early 2026 to address the entire debt structure that comes due between March & May 2027
  • We do note that on 1/31/2026, the 1L notes step down to a 102.25 call px and the 3Ls step down to a 101.41 call px (from 104.5 on the 1Ls and 102.81 on the 3Ls currently)
  • Both step down to a par call on 1/31/2027
• FCF generative in FY23, FY24, and management expects company to be FCF+ in FY25
• Hit double digit gross margins in FY24 and 1Q25 & management expects double digit EBITDA margins by FY25 end

Strategist Ben Briggs has a tearsheet that we can provide and is available to speak (212-692-5123 - ben.briggs@stonex.com)

 

7. EU Credit:

European Credit markets continue to remain resilient to broader market volatility and have been risk on over the course of the week.  Overall, the market seems well balanced with a slight skew to more buyers.  The ECB cut rates again by 25bps to 2% this week; however, this was fully priced in prior to the announcement. The iTraxx Crossover is down 10bps over the week and currently sits at around 290bps which has followed the trend over the last month of tightening spreads.

Primary activity was strong at the start of the week and has tapered off over the last couple of days.  Nevertheless, there has been €56bn of issuance over the course of the week.  A sector of note this week is the auto parts space, which has been under pressure since liberation day but is now starting to recover with the less stressed names coming with deals.  This week, Forvia (EOFP) tapped its 5.625 2030 bonds to add €250m at par to yield 5.625%, using the proceeds to tender its EOFP 2.750 2027 sustainability-linked bonds, and ZF (ZFFNGR) brought a €1.25bn 5Y deal at Par to yield 7.000%.  The desk was active in both issues in new issue trading.  Additionally, Clarios (POWSOL) priced its 2-part (€/$) SS offering with the €800m 6NC2 tranche coming at 4.750%.  The desk was primarily active in new issue over the course of the week but was also active in the satellite space, trading both SES (SESGFP) and Eutelsat (ETLFP); call to hear various other names we were axed in.

 

In distressed news, Atos (ATOFP) has said that it has received an offer from the French state to acquire its advanced computing assets for €410m, which includes high-performance computing, quantum, and AI divisions.  The sale is expected to generate about €800m of revenue, and the transaction is expected to close in 2026.  The desk has been axed in both the 1L’s and 1.5L’s so contact the desk if involved.  Another topical name has been Thames Water (THAMES), where KKR has pulled out the equity raising process which is a massive blow as the company looks to address its £20bn ($27.1bn) debt load- talks has now started amongst senior creditors to prepare an alternative plan.  The desk continues to have cares across the complex. 

8. Asia IG:

Quieter today in Asia with KR, MY, PH and ID out on holiday. IG Credit spreads in general are unch to 2bp tighter with FRNs such as HSBC and SUMITR getting lifted. Indon and Philip Sovs outperformed today where long end bonds got lifted this afternoon ending the day 2bp tighter but still catching up on some widening (up to 4bp) over the last few sessions. In flow, we are seeing continued interest in 1y and 10y banks.

HY space: quiet day overall, but we still saw good activity in some names. In China HY today we saw PB buying NWD perps and selling of FAEACO 12.814 PERP 63/66 indic now, -5pts from yesterday. We also saw small sellers in WESCHI 4.95 07/08/2026 78/81 which fell -1pt from open. We were active in KARAU 10½ 29 100/100.75, seeing buyers in the market. In Macau Gaming we saw buyers in MPEL27s/ WYNMAC 27s. Japan HY we saw buyers in RAKUTN perps. In India, there were buyers in GRNKEN 28s.

MONGOL complex brushed off political uncertainties closing out the week -15/35bp tighter with liquidity remaining thin and local/global RM continuing to add in the belly, desk remained active across 28/29/30/31 maturities and axed across the curve. Corp/Quasi, TDBM saw good two way closing $96/97 with desk left axed whilst MGMTGE continued to lag broader complex.

9. Commodities:

STEEL and ALI (Canada and Mexico):  So the U.S. steel equities were for sale yesterday, and on the Ali side AA out-performed CENX by 2%....which indicates to me more are of the belief that Trump may give some sort of exemption/relief to Canada and Mexico in terms of Steel and Ali tariffs (ie from 50% back to 25%).   Makes sense on paper (especially on the Ali side)…but I don’t really see that happening (especially on the Steel side).  Performance in the steel equities this week has been good….but I wouldn’t go as far to say “great” and would argue has underperformed the tariff hike to 50% and the move in US HRC futures. July US HRC futures are +15% this week alone…..vs STLD +7%, NUE +8%, CMC +5%, and CLF +21%.    CLF +21% you could argue is more positioning related vs anything else….and would certainly suggest the steel names are trading like these 50% tariffs are going away sooner vs later (which the STLD CEO also suggested at a conference this week). Personally….I don’t see Trump walking the 50% steel tariffs back so soon, and I think the relative under-performance in the equities (vs the physical) presents an oppty on the long side.

 

MET-COAL:  The drop of late in met-coal price seems to be getting less attention given everything else going on.  Was trading at $196/mt (FOB Australia) last week…and sitting at $181.40 this morning (down -$7.90/mt the last 2 days).  China has concluded their 3rd domestic coke price cut, still seeing muted demand out of India, Canadian supply ample, Chinese HRC margins still well in the RED, etc.   Get the sense from convos that many are pairing up HCC long vs AMR short….which helps explain HCC O/P AMR by +32% YTD.  I wonder if prices slip more….will we see an unwind there?  If so…could argue HCC might be an interesting short candidate?

 

NIPPON/X:  The DOJ filed a motion to extend the CFIUS litigation until June 13th given Nippon/X remains in motion.  I was thinking we’d hear more details this week around the Nippon/X deal…but we may have to wait a bit longer now.  Remain of the belief the risk/reward being long X here as a standalone a little risky.  Yes…..chances are everything gets done the proper way, and they get their $55 price tag.  BUT…even if the deal gets inked at $55 with the full blessing of CFIUS/DOJ/Trump….where is it going to trade?  Likely NOT all the way up to $55….maybe $54-$54.50 if we’re lucky?  Is that worth the +$1.00-$1.50 (+2-3%) risk?  Hard to argue Trump is ultra-stable here and now….what if Nippon refuses the “golden shares” clause by the U.S. Govt and we have a stale mate? To be clear…I’m NOT suggesting that occurs, simply it’s not out of the realm of possibility.

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