Morning Commentary: Bombardier bonds higher in quiet Friday trading; Fresh Market sets roadshow

By Paul A. Harris

Portland, Ore., April 15 – The Friday session in the high-yield bond market got off to a quiet start, sources said.

High-yield ETFs were lower. The iShares iBoxx $ High Yield Corporate Bd (HYG) was down 20 cents, or 0.24%, at $82.43 per share. SPDR Barclays High Yield Bond ETF (JNK), at $34.54 per share, was down 9 cents, or 0.26%.

Micron above issue price

There was activity in the new Micron Technology, Inc. senior secured notes due Sept. 15, 2023 (Baa2/BBB-), traders said.

One trader had the bond, which priced at par in an upsized $1.25 billion issue on Thursday, trading at par ½ bid, par ¾ offered.

Another had the Micron 7½% notes at par 3/8 bid, par ¾ offered.

Although the deal, which was upsized from $1 billion, has investment-grade ratings and is coming with a covenant package that is basically investment-grade style, the bonds will be traded off of the high-yield desk, sources said.

Fresh Market sets roadshow

In the primary, the Fresh Market plans to start a roadshow and host an investor conference call on Monday for an $800 million offering of seven-year first-priority senior secured notes backing the buyout of the company by Apollo.

Joint bookrunner Barclays will bill and deliver. RBC, Jefferies, Macquarie and UBS are also joint bookrunners.

The issuing entity will be Pomegranate Merger Sub, Inc. prior to the closing of the acquisition, whereupon it will change to the Fresh Market, Inc.

Elsewhere NBTY Inc. announced that it plans to sell $1,075,000,000 of senior notes due 2021.

Barclays will lead the debt refinancing deal, a market source said.

NBTY will also put in place new term loan debt via BofA Merrill Lynch and Barclays, the source added. The bank debt was scheduled to launch on Friday at a bank meeting in London, with a New York bank meeting to follow on Monday (see related story in this issue).

Bombardier climbs

The bonds of Bombardier Inc. were better Friday morning on reports that the company is nearing an agreement with Delta Air Lines for a large order of new aircraft.

Near-maturity Bombardier bonds were up 2 points to 3 points on the reports, while longer maturity paper was up 4 points to 5 points, a trader said.

The Bombardier 6 1/8% senior notes due May 15, 2023 were 84 bid, 85 offered, up 4 points in the mid-morning.

Daily inflows on Thursday

The cash flows of the dedicated high-yield bond funds were positive on Thursday, a trader said.

High-yield ETFs saw $275 million of inflows on the day.

Actively managed funds saw $80 million of inflows on Thursday.

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