L Brands, Hertz trade down; HCA, BMC Software trade above par; funds add $344 million

By Paul A. Harris and Abigail W. Adams

Portland, Me., Aug. 23 – The high-yield primary market remained dormant on Thursday with all eyes on September for an anticipated sizable pipeline of deals.

With no new deal activity, the secondary space was “dead,” a market source said. Trading volume remained light with few notable movers in the space.

L Brands Inc.’s junk bonds were trading down on Thursday after the company slashed its forward guidance and reported sagging sales for one of its brands.

Hertz Corp.’s junk bonds also saw some selling pressure on Thursday after a Morgan Stanley equity report about the company’s stock.

While the company’s 7 5/8% senior notes due 2022 dropped about 1 point, they are expected to return to their previous levels.

Two recent deals that initially lagged their issue price after breaking for trade in early August have improved in recent days.

HCA Inc.’s newly priced two tranche offering of senior bullet notes (Ba2/BB-) and BMC Software’s 9¾% senior notes due 2026 (Caa2/CCC+) are now trading at or above par.

Meanwhile, high-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – continued their streak of inflows for the week ended Aug. 22, adding $344 million, according to fund-flow statistics generated by AMG Data Services Inc.

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