US Junk Bond Market Defrosts After Long Period Without Deals

(Bloomberg) -- The US junk-bond market has reopened with its first offering in nearly two weeks as credit markets stabilize following tariff-induced volatility.

Venture Global Plaquemines Lng, a developer of a liquefied natural gas export facility in the US, plans to sell dollar-denominated senior secured notes in two tranches to refinance existing debt, according to a person with knowledge of the matter.

The company is offering eight-year and 10-year bonds, with initial price talk for the eight-year notes in the mid-high 7% area and the 10-year notes about 25 basis points above that level, said the person, who asked not to be identified discussing a private transaction.

The bonds are expected to be rated Ba2 by Moody’s Ratings, BB+ by S&P Global Ratings, and BB by Fitch Ratings. The broad rally in the US junk bond market also pushed BBs to report the most one-day gains since December 2023.

Proceeds from the bond sale will be used to pay down borrowings under the company’s existing credit facility. The issuer plans to hold an investor call at 10:30 am Tuesday, with pricing expected to follow on the same day.

The deal represents the first time the primary market cracked open in leveraged finance since US President Donald Trump’s tariff announcement on April 2. The last new deal launched was Patterson Cos Inc. on that day. The company, which makes products for pets and livestock, is selling debt to be acquired by Patient Square Capital.

Venture’s deal also comes on the heels of a Monday session in which junk bonds racked up the biggest one-day gains in more in 16 months. 

Mizuho Financial Group Inc. is the lead bookrunner, alongside BBVA SA, Royal Bank of Canada, and Bank of Nova Scotia. 

Issuer Profile

Debt distribution: 2015603D US Equity DDIS

Capital structure: 2015603D US Equity CAST

Related securities: 2015603D US Equity RELS

Ratings history: 2015603D US Equity CRPR

(Adds details on credit ratings in fourth paragraph, context about the market in the sixth and seventh paragraphs.)

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