Primary prices $5.04 billion from seven issuers; forward calendar grows; DISH under pressure

By Paul A. Harris and Abigail W. Adams

Portland, Me., Nov. 8 – A torrent of new-issue business got the Nov. 8 week underway in the dollar-denominated high-yield primary market.

Seven issuers priced single-tranche issues of junk, raising a face amount of $5.04 billion, with solid or better executions.

Six of the seven showed up at the drive-through window.

Meanwhile the active forward calendar saw a $5 billion build-up — all of it business expected to clear ahead of this coming Friday's close, most, in fact, by midweek.

The high-yield index returned 0.375 on Friday, its biggest one-day gain since late August, a trader said.

That pushed the asset class's year-to-date return above 5% (5.09%), the source noted.

Junk is attracting investor cash, most of it intended to be put to work on the calendar, sources say.

With an all but vacant calendar coming into Monday, dealers are scrambling to enable cash-laden investors to put their cash to work, which might, in part, explain the big burst of news in the primary market as the week got underway.

Meanwhile, the secondary space was quiet but firm on Monday with topical news a driving force of trading activity as market players eyed the new deals in the pipeline.

DISH DBS Corp.’s senior notes were under pressure after the company announced a new $4 billion two-tranche offering of secured paper.

The unsecured notes fell about 3 points in high-volume activity on the news.

Diamond Sports Group LLC’s unsecured notes were among the major gainers of Monday’s session after parent company Sinclair Broadcast Group, Inc. announced it was taking on some of the beleaguered unit’s debt.

Massive ETF inflows on Friday

High-yield ETFs saw a massive $1.47 billion of daily inflows on Friday, their biggest daily inflows since March 10, according to a market source.

Among the funds seeing big inflows on the day, HYG saw $942 million and JNK saw $437 million, the market source said.

As a result, offers-wanted-in-competition (OWICs) outnumbered bids-wanted-in-competition (BWICs) five-to-one on Monday morning, a trader said.

Actively managed high-yield funds saw $62 million of inflows on Friday, the market source said.

DISH under pressure

DISH’s unsecured notes were under pressure on the heels of the company’s $4 billion two-tranche offering of secured debt.

The 5 1/8% senior notes due 2029 (B2/B-) fell 3 points in high-volume activity.

They were changing hands in the 92½ to 92¾ context heading into the market close.

The 7 3/8% senior notes due 2028 were also off about 3 points.

The notes were changing hands in the 102¾ to 103 context heading into the close.

The unsecured notes were getting pushed farther down in the capital structure by DISH’s new offering, a source said.

Diamond Sports gains

Diamond Sports’ unsecured notes were among the major gainers of Monday’s session after parent company Sinclair announced it was assuming some of the unit’s debt.

While the company’s 5 3/8% senior secured notes due 2026 jumped 1½ points to 54 on the news, the unsecured notes gained as much as 5 points in intraday activity.

Diamond Sports 6 5/8% senior unsecured notes due 2027 traded as high as 30 on Monday.

However, the notes gave back some of their gains as the session progressed and were changing hands in the 28 to 28¼ context heading into the market close.

Sinclair announced on Monday that it was assuming some of the debt held by the sports unit.

Diamond Sports senior notes have long been under pressure but the unsecured notes sank to the low 20s and the secured notes sank to the low 50s after Sinclair failed to reach a refinancing deal with lenders.

Indexes

The KDP High Yield Daily index gained 13 points to close Monday at 69.99 with the yield now 3.74%. The index posted a cumulative gain of 23 points on the week last week.

The CDX High Yield 30 index fell 7 bps to close Monday at 109.65.

The index posted a cumulative gain of 49 bps on the week last week.

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