Morning Commentary: Junk eases as 10-year pushes above 4½%; Delek Logistics notes on tap

By Paul A. Harris

Portland, Ore., April 12 – The junk bond market opened 1/8 of a point lower on Friday, traders said.

With 10-year Treasuries yielding slight above 4½% at mid-morning – a threshold that one trader characterized as technically and psychologically important – the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was down 0.11%, or 9 cents, at $76.32.

Notes priced Thursday by Transocean Inc. (RIG) – two tranches of priority guaranteed notes (Caa1/B-) – were softer on the morning, a trader said.

The 8¼% five-year notes and the 8½ seven-year notes were both wrapped around par on Friday morning after having priced at par on Thursday afternoon in tranches sized $900 million apiece.

The $1.8 billion RIG deal was heard to have been playing to $5.6 billion of demand across both tranches.

There was activity in the primary market as the Friday session got underway.

Delek Logistics Partners LP and subsidiary Delek Logistics Finance Corp. plan to price a $200 million add-on to their 8 5/8% senior notes due March 15, 2029 (B3/BB-) in a drive-by.

Initial price talk is in the 100.75 area.

Apart from that deal the active calendar is empty, but the week ahead is expected to be an active one in the new issue market, a trader said.

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