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Morning Commentary: Junk calendar grows with DISH notes on tap; Ford paper weakens
By Abigail W. Adams
Portland, Me., Nov. 2 – The domestic high-yield bond primary market continued to show signs of life with another chunky offering joining the forward calendar.
DISH Network Corp. plans to price $2 billion of five-year non-call two-year senior secured notes on Friday with initial guidance for a 2-point original issue discount and a yield in the mid to high 11% area, according to a market source.
The deal joins Pegasus Merger Co.’s $1 billion offering of six-year senior secured notes backing Apollo’s buyout of Tenneco Inc. on the forward calendar, which is expected to price in the coming week.
The resurgence of new deal activity in the primary market is more one-offs than an indication the market is open for business.
The future pace of primary market activity will largely depend on the Federal Open Market Committee’s afternoon announcement and chair Jerome Powell’s press conference about the path moving forward.
If the dovish pivot the market has been expecting occurs, “it might bring some paper out,” a source said.
But that won’t be known until later in the week.
Meanwhile, the secondary space was largely unchanged ahead of the afternoon announcement.
Ford Motor Credit Co. LLC’s newly priced 7.35% senior notes due 2027 (Ba2/BB+/BB+), the deal that reopened the primary after nearly two weeks, were slightly weaker in active trading.
The notes traded as high as par to par ¼.
However, they slipped back down to their previous level and were changing hands in the 99¾ to par context early in the session, a source said.
Ford priced the $1.5 billion issue of the 7.35% notes at par in a Tuesday drive-by.
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