Midday Commentary: New Regency, Schaeffler notes stay strong in early secondary trading

By Paul Deckelman

New York, April 25 - Regency Energy Partners LP's new 4½% notes due 2023 moved up in early trading Thursday, a high-yield trader said, pegging the bonds at 102 bid, 102½ offered.

A second trader saw them at 101¾ bid, 102¾ offered.

The Dallas-based natural gas and natural gas liquids midstream company priced a quickly shopped $600 million of the notes at par on Wednesday. They were seen at 100¾ bid on the break but had moved up to a 1013/4-to-102 context by Wednesday's close.

Among other recently priced deals, a trader said that Schaeffler Finance BV's 4¾% senior secured notes due 2021 were at 101¾ bid, 102¼ offered on Thursday morning, although a second trader - who said that he had seen the bonds having gone out at 100 7/8 bid, 101½ offered on Wednesday - did not see any activity in them on Thursday.

The company - a subsidiary of German ball-bearing manufacturer Schaeffler AG - had priced $850 million of those notes at par in a quick-to-market deal on Tuesday, part of a larger €1.2 billion dual-currency transaction that also included €600 million of 4¼% senior secured notes due 2018.

The new dollar bonds had traded late Tuesday at bid levels between 100 3/8 and 100 7/8, improving to 100¾ to 101¼ by late Wednesday.

Traders did not see any immediate aftermarket action in Erickson Air-Crane Inc.'s new $400 million of 8¼% second-priority senior secured notes due 2020, which priced on Thursday morning.

Overall, a trader said that "the market has a firm tone."

The KDP High Yield Daily index firmed to 75.80 at mid-morning, up 1 basis point from Wednesday's close, while its yield came in by 1 bp to 5.33%.

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