Primary stilled, secondary lower as Brexit shock takes toll; Sun Products jumps on company sale

By Paul Deckelman and Paul A. Harris

New York, June 24 – The high-yield market fell in line with financial markets worldwide on Friday, moving lower on the surprising outcome of Britain’s long-awaited Brexit referendum, asking citizens whether they wanted to see their nation leave the European Union, thus severing political and financial ties dating back to the early 1970s.

Those voters shocked the United Kingdom’s political and financial establishment by voting “Yes” to a dissolution, setting in motion a disengagement process that will consume much of the next several years.

That widely unexpected outcome caused financial markets to react with shock, particularly equity markets in Asia, in Europe and in the United States.

The high-yield market took its cue from the other markets and also moved lower, with many issues down multiple points.

However, unlike the free-falling equities, the junk market’s retreat was considerably more orderly – in fact, many high-yield credits came off the lows they hit in early trading to end only somewhat lower.

Major downsiders included such familiar names as Sprint Corp., Freeport-McMoRan Copper & Gold, Inc. and Chesapeake Energy Corp.

Credits posting gains were few and far between – but one name which stood out was Sun Products Corp., whose bonds shot up solidly on the news that the maker of detergents and other consumer products had agreed to be acquired by German multinational company Henkel AG & Co., KGaA in a transaction valued at about $3.6 billion, including assumed debt.

© 2015 Prospect News.
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