Morning Commentary: Junk opens a touch softer; ETFs see big Monday outflow; primary quiet

By Paul A. Harris

Portland, Ore., June 9 – Junk was a touch softer on Tuesday morning, according to an investor.

“It’s quiet, as it was yesterday,” said that investor, adding that there was nothing dramatic to report in the way of trading.

The cash flows of the dedicated high-yield bond funds were mixed on Monday, with high-yield ETFs seeing substantial outflows, the source said.

The ETFs saw $704 million of outflows on Monday.

Actively managed funds saw $5 million of inflows.

There were a handful of bid-wanted-in-competition (BWIC) solicitations, amounting to $140 million, in the market Tuesday morning, the investor said.

Meanwhile dedicated bank loan funds saw $45 million of inflows on Monday.

Quiet in the primary

The new issue market did not generate any news on Tuesday morning.

However the Monday session saw a substantial buildup of the active forward calendar.

Sealed Air Corp. began marketing an $850 million equivalent amount of senior notes (B1/BB) in two bullet tranches on Monday.

The debt deal includes dollar-denominated notes due September 2025, with early guidance of 5 3/8% to 5½%, and euro-denominated notes due September 2023 with early guidance of 4% to 4½%.

ATS Automation Tooling Systems Inc. kicked off a $250 million offering of eight-year senior notes (B2/B+) on Monday.

The debt refinancing and general corporate purposes deal, which is in the market with unofficial talk in the 6½% area, is expected to price Friday.

Carmike Cinemas, Inc. began a roadshow on Monday for a $230 million offering of eight-year senior secured notes (B1/BB).

The debt refinancing deal, which is expected to price during the middle part of the present week, is being whispered with a 6% to 6Ό% yield.

Meanwhile, in the European market, apparel and footwear retailer New Look was set to start a roadshow on Tuesday for a £1.2 billion equivalent four-part offering of high-yield notes, including £1 billion equivalent of senior secured notes due 2022 (B2/B), which are coming in tranches of sterling- and euro-denominated fixed-rate notes as well as a tranche of euro-denominated floating-rate notes, and £200 million of senior unsecured fixed-rate notes due 2023 (Caa2/CCC+).

And Grupo Antolin Dutch BV began a roadshow on Monday for a €400 million offering of seven-year senior secured notes.

The Spain-based supplier of automotive interior components plans to use the proceeds to help finance the purchase of Aurora, Ont.-based automotive supplier Magna Interiors.

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