CNX Resources bankers sell down hung bonds in low 90s

CNX Resources underwriter MUFG has offloaded a USD 300m chunk of the company’s recently issued unsecured bonds in the secondary market at discounted levels in the 90–91 range, according to four sources following the situation.

MUFG competed to lead the natural gas E&P company’s refinancing earlier this year, offering aggressive terms and a commitment to buy the deal. Credit Suisse had previously staged non-deal roadshow meetings to discuss a CNX deal in February, but did not end up in the syndicate for the new bonds.

MUFG initially circulated whispers on the USD 500m senior unsecured notes due 2027 in the mid-to-high 6% area, but after pricing pushback ultimately placed them with a 7.25% coupon and 97.06 issue price to yield 7.75%.

The bank wound up holding on to at least USD 300m of the paper, and sold down the position this week via Cantor Fitzgerald, the sources said.

“Cantor basically re-syndicated the deal,” one of the sources said.

MarketAxess shows a flurry of trading in the 90–91 area yesterday — dwarfing the volumes of prior days — with the most recent trade at 90.25 yielding 9.015%. The levels compare to trades at 97.75 on 16 May.

Proceeds from the USD 500m 7.25% notes were used to fund a tender for the company’s 2022 notes as well as pay down other debt.

CNX and MUFG did not return requests for comment in time.

2019 Debtwire

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