Morning Commentary: Clear Channel Outdoor bonds rocket in secondary; Match notes on tap

By Paul A. Harris

Portland, Ore., Feb. 8 – Following Thursday's $6.24 billion burst of issuance, the biggest session in the high-yield primary market in the year to date, activity in the Friday new issue market was muted.

Match Group Inc. plans to price a $300 million offering of 10-year senior notes in a Friday drive-by.

Initial guidance has the debt refinancing deal shaping up to yield 6%.

BofA Merrill Lynch is leading the offering.

At mid-morning Friday there was only one other offer in the market, sources said.

Getty Images Inc. is on the road with a $400 million offering of eight-year senior notes (CCC+) set to price in the middle part of the Feb. 11 week.

Initial price talk has the deal coming to yield in the 10½% area.

Although the red hot new issue market has now plowed through some of the most conspicuous merger and acquisitions transactions in the pipeline that began piling up during late December’s freeze in the debt capital markets, there will continue to be opportunistic passes at the market as high-yield companies address near- and intermediate-term maturities, sources say.

Clear Channel 102½ bid

Bonds priced Thursday by Clear Channel Outdoor Holdings, Inc. went soaring into the secondary market and appeared to be holding their premium Friday morning, a New York-based trader said.

The Clear Channel Worldwide Holdings Inc. 9¼% senior subordinated notes due February 2024 (Caa1/CCC+/CCC+) were 102½ bid, in moderate trading, the source said.

The upsized $2,235,000,000 (from $2.2 billion) deal priced at par, in the middle of tightened talk, playing to $7 billion of orders.

Meanwhile in Thursday's other megadeal, $3.75 billion across three tranches from CommScope Inc., two tranches of secured paper (Ba1/BB) totaling $2.75 billion with five-year and seven-year maturities were wrapped around par on Friday morning after having priced at par on Thursday.

However, the CommScope unsecured tranche, $1 billion of senior notes due March 2027 (B1/B+), was trading at a slight premium on Friday, up ¼ point to ½ point, the trader said.

Given the Friday trading levels of the Clear Channel Outdoor subordinated notes and the CommScope unsecured paper, the buyside’s early 2019 aversion to subordinated and unsecured junk bonds appears to have dissipated for the time being.

Away from recent issues, with equities well into the red on Friday morning, high-yield ETFs were lower. The iShares iBoxx $ High Yield Corporate Bd (HYG) was down 0.23%, or 19 cents, at $84.62 per share.

Mixed Thursday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Thursday, according to a trader.

High-yield ETFs sustained $269 million of outflows on the day.

However actively managed high-yield funds saw $105 million of inflows on Thursday, the trader said.

News of Thursday's daily flows follows a report that the combined junk funds saw $3.86 billion of net inflows in the week to Wednesday's close, according to a report from Lipper US Fund Flows.

That's the biggest weekly inflow since the week ended July 13, 2016, which saw $4.4 billion of inflows, a trader said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.