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Downsized WPX two-parter caps $4.1 billion week, bonds trade actively; energy slide continues
By Paul Deckelman and Paul A. Harris
New York, July 17 – A $1 billion two-part bond deal that priced on Friday put a decisive exclamation point on what was essentially a comeback week for the high-yield primary market, which saw its first new offerings of dollar-denominated and fully junk-rated paper from domestic or industrialized-country issuers after a long issuance drought stretching back to the end of June.
Oil and natural gas exploration and production company WPX Energy, Inc. was heard by high-yield syndicate sources to have priced that $1 billion two-part transaction, consisting of five-year and eight-year notes, after the issue was downsized from $1.2 billion originally.
According to data compiled by Prospect News, that deal brought junk market new issuance for the week up to $4.17 billion in eight tranches – a far cry from last week, which saw exactly zero deals get done in Junkbondland amid strong investor angst over Greece, China and oil prices that kept borrowers on the sidelines.
Both tranches of the new WPX notes firmed on heavy volume when they hit the aftermarket.
Away from the new issues, traders saw many natural-resources names sliding in busy dealings – oil and gas credits like California Resources Corp. and Linn Energy LLC, coal operators such as Peabody Energy Corp. and Consol Energy Inc. and metals mining companies like Fortescue Metals Group Ltd.
Statistical measures of junk market performance were lower across the board on Friday, after having been higher all around on Thursday. Friday’s downturn was the second in the last three sessions.
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