Morning Commentary: Microsemi driving by with year’s first junk deal; quality names hold in

By Paul A. Harris

Portland, Ore., Jan. 7 – Higher quality speculative-grade bonds were hanging in amid continuing volatility in the global capital markets shortly after Thursday’s open, according to a trader.

However some triple-C names in the junk bond universe were plunging to new lows, the source added.

Another trader saw bonds down ½ point but starting to bounce back heading into mid-morning.

Against a backdrop of whipsawing stock indexes, high-yield ETFs were lower.

The iShares iBoxx $ High Yield Corporate Bd (HYG) was down 35 cents, or 0.43%, at $79.90 per share. SPDR Barclays High Yield Bond ETF, at $33.61 per share, was down 17 cents, an even half a percent lower.

In the primary, Microsemi Corp. expects to price a $450 million offering of 7.25-year senior notes (B+) in a Thursday drive-by.

It is the new year’s first new deal announcement, and upon completion would be 2016’s first syndicated issue.

Morgan Stanley & Co. LLC, MUFG and Deutsche Bank Securities Inc. are the joint bookrunners for the deal, which is to help fund the acquisition of PMC-Sierra Inc. and to refinance Microsemi and PMC debt.

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