Microsemi brings year’s first syndicated new deal; market lower, funds lose $809 million

By Paul Deckelman and Paul A. Harris

New York, Jan. 7 – The high yield primary market saw its first syndicated junk bond deal get done on Thursday after spending nearly a month on the sidelines, syndicate sources said. Semiconductor company Microsemi Corp. drove by with a $450 million issue of 7.25-year notes.

Although the ice has finally been broken, the sources were cautious about predicting when the next transaction might get done amid current financial market volatility.

Existing issues, meantime, were seen mostly on the downside, in line with continued weakness in the stock and crude oil markets.

The latter – trading at their lowest levels in 12 years – continued to weigh on junk energy names like Halcón Resources Corp., Chesapeake Energy Corp. and Energy Transfer Equity, LP.

Away from the beleaguered oil and natural gas sector, weakness was seen in such varied names as Community Health Systems, Inc., Frontier Energy Inc. and Valeant Pharmaceuticals International, Inc.

Statistical measures of junk market performance remained lower across the board on Thursday, their second consecutive weaker session, after having been higher all around on Tuesday; it was the third lower session in the last four trading days.

Another numerical gauge – flows of cash for high-yield mutual funds and exchange-traded funds, which are considered a reliable barometer of overall junk market liquidity trends – started the new year off on a negative note. The funds posted their fourth net outflow in the last five weeks, as $809.1 million more left those funds than came into them.

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