Primary market becalmed, new deals steady; secondary quiet; prison names continue rebound

By Paul Deckelman and Paul A. Harris

New York, Aug. 22 – The junk bond market’s traditional mid-summer lull was in full force on Monday as the new week began.

Syndicate sources reported no activity in the primary arena, a condition that many of them believe will continue for the remainder of August and on into the first days of September, leading up to the Labor Day holiday weekend.

Secondary market participants meanwhile said that recently priced new issues such as those from Tallgrass Energy Partners, LP, Diamond Resorts International, Inc. and Big Tex Trailers were holding steady around the levels at which they had traded last week following their respective pricings, but on limited volume.

Limited volume seemed to be the watchword of the overall market – even for the bonds of private prison operators Corrections Corp. of America and GEO Group, Inc. They continued to rise on Monday, extending a rebound which had begun on Friday following Thursday’s swoon on the news that the U.S. Justice Department will begin phasing out the use of privately run corrections facilities such as those run by the two companies.

Elsewhere, a sharp drop in oil prices failed to have much impact on the bonds of energy companies such as California Resources Corp. and Chesapeake Energy Corp.

Statistical market performance measures were mixed for a second consecutive session on Monday. They had turned mixed on Friday after having been higher over the two sessions before that.

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