Morning Commentary: Starwood Property brings $400 million sustainability-linked notes

By Paul A. Harris

Portland, Ore., Dec. 1 – With buyers on the march in the stock markets, cash bonds were ¼ point better at mid-morning on Wednesday, according to a bond trader.

As the major U.S. stock indexes were posting gains in excess of 1%, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was up 0.63%, or 54 cents, at $85.89.

Starwood Property Trust, Inc. planned to reopen the post-Thanksgiving primary market with a drive-by $400 million offering of sustainability linked notes (expected ratings Ba3/BB+).

The deal-size will not grow.

Initial guidance has the three-year bullet coming to yield 4% to 4¼%.

Away from Starwood there was other no new issue news by mid-morning, sources said.

In the secondary market technology and telecommunications paper was attracting a bid, the bond trader said.

The DISH DBS Corp. (DISH Network Corp.) 5 1/8% senior notes due June 2029 were up 7/8 of a point at 88½ bid, 89½ offered.

DISH's 7 3/8% senior notes due July 2028 had also undergone improvement, and were 98½ bid, 99½ offered at mid-morning, the trader said.

The Altice France SA dollar-denominated 5½% senior notes due October 2029 were up a point to 1¼ points.

Investors remain wary of credits with direct economic exposure to the coronavirus pandemic, as its latest conveyance, the Omicron mutant, continues to generate headlines, the trader said.

The Royal Caribbean Cruises Ltd. 5½% senior notes due April 2028, a bullet, were unchanged on the morning.

Tuesday outflows

The dedicated high-yield bond funds sustained $528 million of net outflows on Tuesday, according to a market source.

Actively managed high-yield funds saw $305 million of outflows on the day.

High-yield ETFs sustained $223 million of outflows on Tuesday, the source said.

With only Wednesday's daily fund flow numbers remaining to go into the tally, the junk funds were poised to sustain their biggest weekly outflows since May, according to the market source.

Those fund flow numbers are expected to be reported on Thursday by Refinitiv Lipper.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.