Morning Commentary: Junk opens weaker; DISH outperforms on ‘Amazon’ buzz; primary quiet

By Paul A. Harris

Portland, Ore., May 17 – The high-yield bond market opened slightly weaker on Wednesday on the back of weakness in the stock market, according to a bond trader.

Bonds were down ¼ to ½ point.

The CDX HY 28 index was 40 cents lower at midmorning.

SPDR Blmbg Barclays High Yield Bd ETF (JNK) was a dime lower (down 0.26%) at $37.13 per share.

The bonds of DISH DBS Corp. were outperforming the market on a Satellite Business News story that Amazon.com is in talks with the Englewood, Colo.-based direct-broadcast satellite service provider, possibly with a view to become a “foundational customer” on a wireless network that DISH is believed to be developing, the trader said.

The DISH DBS 7¾% senior notes due July 1, 2026 were up 0.5 point at 115¼ bid, the traders said, adding that DISH stock was also up early Wednesday but appeared to fade with the rest of the stock market.

The Dow Jones industrial average was down 1.35% at midmorning.

Quiet primary

The primary market was largely quiet at midmorning, with the stage set to have a modest calendar of deals clear late in the week, in keeping with the manner in which the new deal market has been operating throughout most of the spring.

There was a trickle of new issue news out of Europe.

Iron Mountain Inc. is circulating initial price talk on its €300 million offering of senior notes due January 2025 (Ba3/BB-) in the 3½% area.

There is an expectation in the market that it could come tighter, according to a trader.

The deal is expected to price on Thursday.

Joint global coordinator Barclays will bill and deliver. Credit Agricole is also a joint global coordinator.

Meanwhile the Premier Foods plc £210 million offering of five-year senior secured floating-rate notes appears poised to price on Wednesday, according to a stabilization notice that appeared early in the New York morning.

BNP Paribas will bill and deliver for that debt refinancing deal.

Looking at the dollar-denominated calendar, Great Lakes Dredge & Dock Corp. is in the market with $325 million of five-year notes expected to price on Thursday. Initial guidance is in the 7½% area.

First Cash, Inc. is marketing $300 million of seven-year notes, which are expected to price this week. Initial guidance is 5¼%.

Suncoke Energy Partners, LP plans to sell $675 million of eight-year senior notes, which are being guided in the high 6% to low 7% yield range.

And Delek Logistics Partners plans to sell $250 million of eight-year notes. Early guidance is 6¾% to 7%, according to a trader, who added that the deal is expected to price on Thursday.

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