Commentary & Deal Flow

While the US high yield new market remained slow, a jumbo $2.25bn data center deal made its way this morning. That was the only deal announced today and no other deals priced. 

The strong corporate earnings report and forward guidance from CoreWeave yesterday has helped improve sentiment toward the AI/data center sector, paving the way for Zenith Arc LLC $2.25bn 5yNC2 sr sec notes (IPT High 8s), pricing tomorrow. 

The deal comes after a more skeptical tone towards AI in July, which nearly halted AI-related deal flow. The last data center deal, Galaxy Helios, also saw underwhelming investor reception, with IPT-to-Priced widening 106.65bps and final pricing spread at a 553bps versus 356.18bps for YTD AI-related deals.

The European high yield new issue market remained quiet with no new issues announced or priced today. However, revised price talk was announced for one European deal still on the calendar - HSE Investment Sarl EUR400m (EUR300m new money and up to EUR100m in exchange) 5.5yNC2 sr sec FRN, revised price talk 3mE+650 at $99.00-$99.50 (vs price talk of 6mE+650-675bp at 99 OID, IPT of 6mE+650-675bp at 99 OID), likely pricing tomorrow. The new money order and exchange offer deadline was 4:30pm UKT today.

With no new issues priced today, the US high yield new issue deal flow for the week remains four deals (four tranches) for $2.35bn. This is already on the low-end of this week’s syndicate desk estimates that ranged $2bn-$9bn (all were in the $5bn-$9bn, except one outlier at $2bn-$4bn, who excluded data center deals from their estimate). Our guess was $6bn.

August is slowly picking up with $5.65bn priced so far. Syndicate desk estimates for August volume were very wide, ranging from $7.5bn to $30bn. Those expecting volumes on the lower end excluded data center volumes from their guess. The estimates excluding data center deals were $7.5bn-$17.5bn. Our guess was $17bn.

The US high yield secondary market was a smidge better after the in-line CPI results (CPI MoM 0.1% and Core CPI MoM 0.2%). UST yields initially declined after the CPI but bounced back later in the day, closing close to flat (10y UST yield unchanged at 4.69%), while stocks were little changed or higher (DJIA -22; S&P +20; NASDAQ +143). The US high yield cash market was flat to an 1/8 of a point higher on very light flows. 

The CDX HY46 was up almost 1/16 of a point to 108.014.

This week’s new issues were flat or better today. The best performer was yesterday’s new issue Ryman Hospitality, up 3/8 of a point since yesterday’s close, while CrossCountry was unchanged. The rest were up an 1/8 - 1/4 point. 

CFR High Yield Forward Calendar

===================== [ 08/10/2026 Week ] ===============

HSE Investment S.à r.l (HSEINV) EUR400m (EUR300m new money and up to EUR100m in exchange) Reg S sr sec floating rate notes due 2032 (5.5y), NC2 (MWC B+50bp), then at 100. --/--/B- (--/--/stable). Via Deutsche Bank (B&D)/UniCredit jt glocos and physical books. List ISE. NY law. CoC at 101. Pays 06/30 and 12/31, starting 12/31/26. Denoms: 100kx1k. ISIN: XS3437716494. IPT: 6mE+650-675 0% floor) at 99. Price talk: 6mE+650-675 0% floor) at 99. Revised price talk: 3mE+650 at $99.00-$99.50. Roadshow (small group meetings) 07/21-22 (investor call at 10:30 UKT / 11:30 CET 07/21). New order and exchange deadline: 4:30pm UKT 12-Aug-2026 (originally 4pm UKT 07/29, then 08/06). UOP: Along with EU29m cash on hand, to refinance the existing HSE Investment Sarl EUR311m sr sec FRN due 15-Oct-2029 (3mE+600bp), and up to EUR100m will be offered to existing PIK note holders in exchange, and for transaction costs. Existing PIK note terms: HSE Finance Sarl EUR192m original amount (EUR211.665m current size) sr sec PIK FRN due 15-Apr-2030 (floats E+785bp), ISIN: XS3084270480. The maturity of the remaining PIK notes will automatically be extended to April 2032. There is a concurrent consent solicitation with respect to the PIK notes to remove the restrictive covenants, reporting requirements, certain events of default, and to permit entering into the PIK ICA Amendment Agreement, all of which require consents of at least a majority in aggregate amount outstanding. There is also a consent solicitation with respect to the Contingent Value Rights (CVR) holders to de-staple the CVRs from the PIK notes. Equity sponsor: Providence Equity Partners. Biz: Leading European live-commerce platform (TV channels and internet - Home Shopping Europe, HSE24). HQ: Ismaning, Germany.

NetRoadshow registration link: https://www.netroadshow.com/events/login/1PeTHmoj7tK2igGkdfD9zgTF4bXwdFzqDbKKd Access Code: HSE26. 

Zenith Arc LLC  $2.25bn 144A/Reg S sr sec green notes due 2031 (5y). NC2 (MWC T+50). Equity claw: 2y 40%. Amortization: DSCR-based amortization, payable semi-annually beginning upon Data hall 1 lease commencement. Expected double-B profile. Via MS sole, Cantor as co-manager. No reg rights. CoC at 101. Denoms 2kx1k. IPT: High 8s. Did investor call at 10:30am 08/12. Pricing 08/13. UOP: data center construction, including construction of the building and the substation to be built on property, fund debt reserves and management fees, and fund interest payments on the notes during construction of the project. Biz: Zenith Arc LLC is a wholly-owned subsidiary of Prairieland Rivers LLC, a JV created by Next Frontier and Fluidstack owned entities. The company is developing a data center located in Oklahoma that will deliver 149 MW of Critical IT load. Capacity has been 100% leased to JS Data Center, LLC, a subsidiary of Jane Street, over a 15-year NNN base lease term. HQ: New York City, NY.

Gainwell Acquisition Corp (MILACQ) $TBD ( $4.34bn split between TLB and sr sec notes TBD) 144A/Reg S sr sec notes due 2031 (5y). NC2 (MWC T+50). Equity claw: 2y 40%. Special call: 10% per year the first 2 years at 103. B2 / (Expected B- / B+) (stable). Via JPM/GS/DB/Mizuho/TSI/Citizens/FTB/MUFG/WFS/MS jt books. No reg rights. CoC at 101. Denoms 2kx1k. IPT: Mid 9s. Did investor call at 11am 08/11. Pricing 08/14. UOP: along with $TBD 1L TLB and amended and extended $1.459bn 2L TLB, refinance the entire capital structure including the existing $4.0094bn 1L TLB due 2027 and $1.459bn 2L TLB due 2028. Biz: A leading technology-enabled healthcare and human services platform that helps enable state agencies to administer mission-critical public benefits programs. HQ: Tysons, VA.

Deal Roadshow link: https://dealroadshow.finsight.com/e/GRAND26 

====================== [ 2026 ] ===============

Paramount Skydance Corp (PSKY, PARA) approx $12.4bn (US$/EUR) equivalent sr sec 2nd lien notes. B1/BB/BB. Via BofA/Citi/Apollo. June biz (exchange/tender/consent deadline is 5pm 06/17/26). UOP: along with approx $30-32bn of sr sec 1st lien IG-rated notes, $7.50bn (US$/EUR) equivalent sr sec 1st lien term loan B, and $5bn sr sec 1st lien term loan A, which has already been raised (1st lien debt rated --/BBB-/--), to fund the acquisition of Warner Bros Discovery Inc (WBD) for $31.00 per share in cash or $81bn total equity ($110bn enterprise value) (WBD shareholders will receive a $0.25 per quarter ticking fee for each quarter after 09/30/26 that the deal has not closed), PSKY is also paying the $2.8bn Netflix breakup fee. The deal will also be funded with a $47bn new equity private placement of Class B shares at $16.02 per share by the Ellison Family ($46.720bn) and RedBird Capital Partners ($250m), and others. PSKY equity holders will also be given the opportunity to participate in a rights offering for up to $3.25bn PSKY Class B Common shares at $16.02 per share. BofA/Citi/Apollo originally provided a $54bn debt commitment ($38.6m new bridge loan and a new $15bn bridge loan replacing the existing WBD debt refi bridge loan incurred 06/30/25, to fund the $14.5bn cash cap tender offer across six different bond pools covering all of its approx $35.5bn of outstanding bonds ($17.7bn face amount of bonds were retired)), also a $3.5bn bridge loan to backstop PSKY's existing revolver, which has now been replaced by a new $5bn revolver.  $12.8bn of 2nd lien sr sec notes will also be issued in the exchange offer for a portion of the existing Warner Bros Discovery debt. The previous plan to spin off WBD's Global network business that was announced 06/09/2025 has been canceled. Closing is expected Q3 2026. 

Timeline: 06/09/2025 WBD announces plan to spinoff its Global Network business to shareholders: 10/21/2025 WBD announced a Strategic Review in response to unsolicited interest from multiple parties and its intent to evaluate a broad range of options; 12/05/2025 WBD accepts an offer from NetFlix to purchase the WBD Streaming and Studio biz for $27.75 per share, consisting of $23.25 in cash and $4.50 of Netflix equity, or a total enterprise value of $82.7bn); 12/08/2025 PSKY took its offer hostile, going directly to shareholders with a $30 per share all cash offer for the entire company; 02/26/2026 WBD announced that it had accepted Paramount's improved offer and canceled plans to spin off WBD's Global network business, and then shortly thereafter Netflix announced they had dropped out of the bidding process. 04/23/26 update WBD's shareholders approved the merger with Paramount Skydance, but regulatory approval is still pending. 05/19/26 PSKY commences tender offers and exchange offers for certain Discovery Global Holdings Inc and Discovery Communications LLC notes and Warner Bros Discovery commenced consent solicitations from holders of WBD notes extending the deadline of the Required Exchange Transaction, expiration date for all transactions is 5pm 06/17/26. 05/19/26 Discover Global Holdings Inc (Warner Bros Discovery) launched an approx $6bn (US$5bn/EUR1bn) 7y sr sec term loan B two-part, to partially repay the $15bn bridge loan incurred 06/30/25 to fund the $14.5bn capped tender offer for WBD notes; upsized 05/21/26 to approx $10bn ($9bn/EUR remains EUR1bn); upsized and priced 05/27/26 to the full $15bn ($13bn and EUR1.717bn). These term loans will be refinanced when the merger transaction closes. 05/27/26 update the requisite consents were received from bondholders in the consent solicitation. These amended bonds will be able to participate in the 144A exchange offers for new sr sec 2nd lien notes ($12.1bn and EUR0.6bn final results) and the tender offers ($2.4bn final results). $2.5bn and EUR0.1bn are not subject to the exchange offers or tender offers (only QIBs are eligible and only bonds for which consents have been given are eligible). 06/12/26 update: DoJ approves the merger with no changes. 6/18/26 update: China approves the merger. 06/24/26 update: EU approval is seen to be on track, possibly with cancelation of its joint venture with Universal Picture. 06/26//26 update: PSKY extends tender exchange offers to 5pm 07/15/26 (24.38% of notes subject to the tender offer and 44.27% of the notes subject to the exchange offer have been tendered (PSKY does not view these figures to be representative of the final results of the applicable offers). 07/09/26 update: previously The Competition Protection Agency of Kuwait, the Austrian Federal Competition Authority, and the Australian government have also unconditionally approved the merger. 07/09/26 update: Oregon has filed a lawsuit against PSKY requesting more materials and time to review them. Other US states, including California, have previously announced their intention to block the merger. 07/10/26 update: WSJ story: In a statement, Paramount denied that its timeline had been adjusted because of Oregon's legal actions. It said the European Commission has until July 22 to complete its review of the deal-plus 10 more working days to consider remedies-and that date shouldn't be seen as a target for the deal to close. 07/13/26 update: a group of state attorneys general led by California's Rob Bonta filed a lawsuit aimed at blocking the merger due to antitrust concerns. Later in the day, the group filed court papers seeking a temporary restraining order to  put the deal on hold so that legal proceedings could move forward. 07/14/26 update: The Writers Guild of America sued Paramount Skydance to block the merger, asserting the merger would harm competition. 07/14/26 update:  Paramount trial counsel Jeffery Kessler said in an interview with CNBC that  PSKY is still aiming to close its proposed acquisition of Warner Bros Discovery by the end of September despite a recent lawsuit filed by state attorneys general challenging the deal. 07/16/26 update: a PSKY shareholder sued Larry Ellison, his son David Ellison and the PSKY board asserting fiduciary breach claims when they cut an illegal deal with Trump to secure the completion of the acquisition. 07/20/26 update: a federal judge in California put a 14 day hold on the closing of the acquisition saying it likely violates antitrust law. A hearing is scheduled for 08/03/16 to determine whether to extend the deadline as the lawsuit brought by California et al to block the merger proceeds. 07/22/26 update: the EU gave conditional approval to the acquisition pending the termination of a  distribution agreement with Universal Pictures in Europe. 07/24/2026: Paramount Skydance has reached an agreement with a coalition of state attorneys general to postpone the Warner Bros. Discovery merger until five days after a trial is held or June 1, 2027, whichever is earlier. 07/31/26 update: PSKY extends tender exchange offers to 5pm 08/14//26 (66.05% of notes subject to the tender offer and 76.26% of the notes subject to the exchange offer have been tendered (PSKY does not view these figures to be representative of the final results of the applicable offers).

According to Moody's, PSKY's post-closing capital structure will include a total of approx $86.8bn of debt, consisting of $44.5b on sr sec 1st lien debt (48%), approx $25.2bn in sr sec 2nd lien notes (27%), $15.5bn sr unsec notes (18%), and approx $1.6bn of sub notes (2%). The $44.5bn sr sec 1st lien debt will consist of $5.0bn term loan A (already done), and $39.5bn in new first lien secured debt (also $5bn revolver (undrawn)). The $25.2bn 2nd lien debt will consist of $12.8bn issued in the exchange offer and $12.4bn still to be issued as part of the debt financing. The $15.5bn sr unsec notes will consist of  $13bn existing at Paramount and $2.5bn existing at WBD.

The Brink's Co (BCO) $2.28bn sr notes. Via MS. (Existing sr unsec notes were affirmed at Ba3/BB/BB+ (stable/stable/stable)). UOP: along with cash on hand, to fund the acquisition of NCR Atleos Corp (NATL) for $6.6bn implied value, consisting of $2.2m in cash ($30.00 per share in cash) and 13.3m BCO cmn shares (0.1574 cmn share of BCO per NATL share) ($50.40 per share total implied value), and the assumption of $2.6bn NATL debt. MS has provided a $4.5bn bridge loan to fund the cash portion and refinance NATL's debt (BCO will also use cash on hand) (The bridge loan originally was $4.5bn total size consisting of $2.276bn sr unsec bridge loan to fund the cash portion of the acquisition, $873m sr sec bridge loan backstopping the amend and extend of NCR Atleos term loan A with BofA, and $1.35bn sr sec bridge loan backstopping the $1.35bn 9.50% sr sec notes due 2029, in case Brink's and NCR Atleos do not receive the requisite consents from the noteholders to keep the bond outstanding). Closing is expected in Q1 2027. Biz: provider of cash management, secure logistics and security services. HQ: Richmond, VA. (Acquisition announced 02/26/2026).

+++04/07/26 update: on 03/31/36 Brink's increased its existing $2.225bn term loan A with a new $1.025bn delayed-draw term loan via BofA and increased its revolver by $600m. This financing will replace a portion of the bridge loan.

+++03/11/26 update: NCR Atleos announced they had received the requisite consents and amended the CoC definition on its  9.50% sr sec notes due 2029.

+++03/05/26 update: NCR Atleos Corp commenced a consent solicitation with respect to its $1.35bn 9.50% sr sec notes due 2029. The Proposed Amendments seek to amend the defined term “Change of Control” to provide that the Mergers will not constitute a Change of Control and to add or amend certain other defined terms contained in the Indenture related to the foregoing.

The amended and restated credit agreement increases the size of the existing credit facility from $2.225 billion to $3.85 billion. The increase is structured as a $1.025 billion delayed draw term loan and a $600 million increased revolving credit commitment, and the proceeds are intended to be used to fund part of the cash consideration for Brink’s potential acquisition of NCR Atleos Corporation (“NCR Atleos”), refinance indebtedness of NCR Atleos, and fund general corporate purposes. The amended and restated credit agreement will mature on March 31, 2031. Pricing is expected to remain at Term SOFR + 150 basis points through the consummation of Brink’s proposed acquisition of NCR Atleos, subject to Brink’s consolidated net leverage ratio in accordance with the terms of the amended and restated credit agreement. The acquisition remains subject to customary closing conditions, including regulatory approval and shareholder approvals from both companies.

Fertitta Entertainment Inc (FRTITA) poss $ notes. (Existing unsec: Caa2/CCC+; sec: B2/B). UOP: fund the acquisition of Caesars Entertainment Inc (CZR) by Fertitta for $31.00 per share in cash representing an equity value of $5.7bn or an enterprise value of $17.6bn including $11.9bn net debt. Fertitta plans on funding the transaction with equity financing provided by Fertitta Entertainment and committed debt financing obtained from 10 banks. MS/GS are financial advisors to Fertitta. Biz: gaming, entertainment, and restaurants. HQ: Houston, TX. (Acquisition announced 05/28/2026).

HB Fuller Co (FUL) poss notes. UOP: fund the acquisition of Advanced Medical Solutions Grp plc (AMS) for GBP2.85 per share, equity value of GBP659m or an enterprise value of GBP715m. Backstopped by a 100% fully committed bridge loan. GS and Perella Weinberg are financial advisors to HB Fuller. Closing is expected by the end of Q4 2026. Biz: maker of adhesives, coatings and sealants. HQ: St Paul, MN.

Rocket Lab Corp (RKLB) possible notes. UOP: to fund the acquisition of Iridium Communications Inc (IRDM) for $54 per share ($27.00 in cash and the rest in RLKB shares) for a total enterprise value of approx $8bn. DB/WFS have committed to provide a $3.6bn 1 year bridge loan to backstop the financing of the deal, which is expected to consist of debt and equity financing and cash on hand. Biz: a leading space company that provides launch services, spacecraft, payloads and satellite components serving commercial, government, and national security markets. HQ: Long Beach, CA. (Acquisition announced 06/29/26).

Alcoa Corp (AA) US$ sr notes. (existing sr unsec debt of subs Ba1/BB+/BB+. UOP: fund the acquisition of bauxite mine interests, alumina refinery assets, and aluminum smelter assets from South32 Ltd in a cash and stock transaction representing an up-front purchase price of $4.1bn or a $4.7bn enterprise value including the assumed net debt. The transaction consists of $3.1bn in cash, $1bn in stock (~17m AA shares at $58.79), $600m of assumed net debt, as well as an additional CVR worth up to $750m based on the price of aluminum. To help fund the cash portion of the transaction, Alcoa obtained a $3.1bn bridge facility with GS which they plan to replace with cash on hand and permanent debt financing. The existing sr unsec debt of Alcoa Corp's subs is rated Ba1/BB+/BB+. The transaction is expected to close by Q2 2027. Biz: a global industry leader in alumina and aluminum products. HQ: Pittsburgh, PA.  (Acquisition announced 06/30/26).

Solstice Advanced Materials Inc (SOLS, SOLADV) $ notes. Existing sr unsec ratings Ba2/BB+/BB+. UOP: fund the acquisition of Element Solutions Inc (ESI) for $50.10 per share in cash and stock, or a total valuation of $14.5bn including the assumption of net debt. GS has provided a $4.7bn bridge loan to backstop the cash portion of the deal. Closing is expected by Q2 2027. Biz: is a global, differentiated advanced materials company and a leading global provider of refrigerants, semiconductor materials, protective fibers and healthcare packaging. HQ: Morris Plains, NJ. (Acquisition announced 07/06/2026).

Group 1 Automotive Inc (GPI) $1.25bn notes. (Existing sr unsec ratings Ba2/BB+). Via JPM. UOP: fund the acquisition of dealership assets from Hennessy Automobile Companies for $1.3bn in cash. Group 1 Auto expects to finance the acquisition with $1.25bn of new debt, which has been backstopped by a $1.25bn bridge loan commitment from JPM. Closing is expected by Q4 2026. Biz: owns and operates auto dealerships, franchises and collision centers. HQ: Houston, TX.  (Acquisition announced 07/30/26).

Integer Holdings Corp (ITGR) possible bonds. Via Citi/KKR/Barc/UBS/Jefferies. UOP: fund the LBO of Integer by KKR for $127 per share in cash ($5.7bn enterprise value). Closing is expected by the end of 2026. Biz: medical device contract development and manufacturing organization (CDMO). HQ: Plano, TX. (Acquisition announced 08/03/26).