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Morning Commentary: Junk improves with equities; NFP brings $300 million drive-by
By Paul A. Harris
Portland, Ore., Aug. 8 – The high-yield bond market saw 1/8 point to ¼ point of improvement in line with a positive open in the stock market on Monday, according to a bond trader based in New York.
With the S&P 500 stock index up 0.83% at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was up 0.62%, or 48 cents, at $78.52.
The recently minted CCO Holdings, LLC/CCO Holdings Capital Corp. (Charter Communications, Inc.) 6 3/8% senior notes due 2029 (B1/BB-) returned to positive territory on Monday, trading at par ¼ bid, par ¾ offered, up around ¼ point on the morning, the trader said.
Those bonds were wrapped around 99½ late last week, the source added.
The upsized $1.5 billion deal (from $1 billion) came at par last Thursday.
Another recent deal, the Advisor Group Holdings, Inc. 8 5/8% senior secured notes due 2027 (B2/B-/B), maintained a solid premium to its issue price at 101¾ bid, 102¼, unchanged from Friday.
The upsized $500 million issue (from $475 million) also came last Thursday at par.
Away from recent issues, the bonds of AMC Entertainment Holdings Inc. were up a point on expectations that the company will use a special dividend on its AMC preferred equity units to address its estimated $5.5 billion debt burden, the trader said.
In its earnings report last week, the Kansas City-based motion picture exhibitor said that its revenues improved, and its pandemic-related losses had narrowed.
In the new issue market, NFP Corp. plans to price a $300 million offering of eight-year senior secured notes (B1/B) in a Monday drive-by.
Initial guidance has the notes coming to yield in the 8% area.
Away from that quick-to-market deal the active forward calendar is empty, with $12 billion to $15 billion of expected summer new issue business believed to have been put on hold until after Labor Day.
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