Morning Commentary: XPO Logistics bonds continue ascent in quiet but well-bid-for junk market

By Paul A. Harris

Portland, Ore., Aug. 19 – The high-yield market was quiet but well bid for Tuesday morning, according to a trader on the East Coast of the United States.

In the secondary market the recently priced XPO Logistics, Inc. 7 7/8% senior notes due Sept. 21, 2019 (B1/B-) were 103½ bid, 104 offered, up a quarter of a point since Monday, the trader said.

The deal came at par in a $500 million issue last Thursday.

Also performing well in the secondary are the NCSG Crane & Heavy Haul Corp. 9½% senior secured notes due Aug. 15, 2019 (B3/B-). The deal was trading at 102¼ bid, 103¼ offered on Tuesday, up from 102 bid, 103 offered on Friday.

The downsized $305 million – from $310 million – deal priced at par on Aug. 8.

Meanwhile the primary market remained dormant on Tuesday morning, with telephone calls shunted to voicemail and e-mail messages unanswered.

A big September could be in store, sources say.

Issuance could hit $40 billion, a monthly total amount that has only been topped just three times in the history of the market (two of those mega-months were the previous two Septembers).

Meanwhile, dedicated high-yield funds saw $515 million of inflows on Friday, the most recent day for which the trader had information.

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