Morning Commentary: Amid global stock rout, junk down ½ point; Owens-Illinois paper eyed

By Paul A. Harris

Portland, Ore., Aug. 12 – Amid a rout in the global stock markets, cash bonds were half a point lower on Tuesday, according to a bond trader.

However freshly minted Owens-Brockway Glass Container Inc., Owens-Illinois, Inc.’s 5 7/8% senior notes due Aug. 15, 2023 (B1/BB-) were hanging in above their new issue price on Wednesday morning, the trader said.

The eight-year paper, which priced in a $700 million tranche at 99.219 to yield 6% on Tuesday, was 99¾ bid, par ¼ offered heading into the Wednesday midday in New York, down from par 1/8 bid, par 3/8 offered earlier in the session.

There was a lot more demand for the eight-year paper than there was for the 10-year notes, the trader commented referring to the $300 million of 6 3/8% notes due Aug. 15, 2025 (B1/BB-), which the company price at par on Tuesday.

Those notes were 99½ bid, par offered on Wednesday morning, the trader said.

Deals on deck

In the primary market there are two deals on deck.

Post Holdings, Inc. set price talk in its $1.2 billion offering of senior notes (B3/B).

The St. Louis-based ready-to-eat cereal company talked $600 million of 8.5-year notes to yield 7½% to 7¾% and talked $600 million of 10-year notes to yield 7¾% to 8%.

Books close at 3 p.m. ET on Wednesday, and the deal is set to price thereafter.

And AMAG Pharmaceuticals Inc. upsized its offering of eight-year senior notes (B3/B+) to $500 million from $450 million and talked the notes to yield 7¾% to 8%.

Books close at 1 p.m. ET on Wednesday, and the deal is set to price shortly thereafter.

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