XPO Logistics in focus, drops on short-seller report; Frontier under pressure

By Paul A. Harris and Abigail W. Adams

Portland, Me., Dec. 13 – The domestic primary market remained dormant on Thursday with December poised to be the first December with no new deal activity in at least a decade.

Meanwhile, the high-yield secondary space continued to firm on Thursday, staging a mid-month rally that may push returns from the red to the black before the year comes to a close.

While several names were seen sharply higher, trading volume remained light with activity driven by end-of-year cleanup and adjustments, sources said.

XPO Logistics, Inc.’s junk bonds were in focus in the secondary space with the notes trading down after the release of a short-seller report that questioned the company’s accounting practices.

Refinitiv’s junk bonds, which were issued in a closely watched LBO financing deal, were trading lower in high-volume activity.

Frontier Communications Corp.’s junk bonds were under pressure with the soon-to-mature 7 1/8% senior notes due March 15, 2019 dropping as much as 4 points in intraday trading.

Meanwhile, high-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – saw outflows of $2.06 billion for the week ended Dec. 12, according to fund-flow statistics generated by AMG Data Services Inc.

The week marked the fourth consecutive week of substantial outflows further widening the gap in what has been a record-setting year for outflows.

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