| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers Review > Headlines for 2015 > News item |
Morning Commentary: Junk opens weaker; California Resources bonds drop on news of exchange offer
By Paul A. Harris
Portland, Ore., Nov. 12 – High-yield bonds were weaker in early Thursday trading, with the CDX HY 25 index down more than a quarter of a point heading into mid-morning on the East Coast of the United States, according to a trader in New York.
High-yield ETFs were in negative territory on the day.
The iShares iBoxx $ High Yield Corporate Bd (HYG) was 15 cents lower, at $83.65 per share, heading into mid-morning.
SPDR Barclays High Yield Bond ETF (JNK), at $35.67 per share, was down a dime.
California Resources down
Energy companies remained under pressure on Thursday, with the barrel price of West Texas Intermediate crude oil down 67 cents at $42.26, the trader said.
The bonds of California Resources Corp. were lower on news that the company began an exchange offer for up to $1 billion of three series of its outstanding senior notes for new second-lien paper – an action that will prime those holders of the senior notes left out of the exchange.
The California Resources 6% notes due November 2024, which have served as a sector benchmark since the magnitude of the crude oil crash started to become apparent in late 2014, were 64¾ bid, 65¾ offered heading into mid-morning on Thursday, down a couple of points, the trader said.
California Resources is offering to swap out its $1 billion of 5% senior notes due 2020, $1.75 billion of 5½% senior notes due 2021 and $2.25 billion of 6% senior notes due 2024.
In exchange, the company is offering newly issued 8% second-lien notes due 2022.
The total exchange value will be $800 for each $1,000 principal amount of notes tendered.
Sensata on deck
Activity in the primary market was muted on Thursday morning, with one new deal announced.
Sensata Technologies Holding NV plans to price $750 million of 10.25-year senior notes on Thursday.
BofA Merrill Lynch, Barclays, Morgan Stanley, Goldman Sachs, Mizuho and RBS are joint bookrunners for the acquisition financing (see related story in this issue).
© 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.