Junk floodgates open, $2.5 billion joins calendar; LifePoint under water; Strathcona jumps

By Paul A. Harris and Abigail W. Adams

Portland, Me., Aug. 1 – The month of August began at a purposeful pace in the junk bond new issue market on Tuesday.

The session had $2.5 billion of business announced or unambiguously telegraphed.

Meanwhile, it was a soft day in the secondary space with the market coming in from recent heights.

The cash bond market gave back about ¼ point as market players evaluated a host of macro data and earnings.

The latest JOLTS report showed the lowest amount of job openings in more than two years, although it also reflected the lowest rate of layoffs for the year with unemployment remaining near historic lows.

The release of the report coincided with the latest ISM Manufacturing report, a measure of factory activity, which again contracted.

While market optimism about a soft landing propelled levels to recent heights, some have been questioning the narrative, a source said.

In specific issues, LifePoint Health Inc.’s 9 7/8% senior secured notes due 2030 (B2/B) played to heavy demand during bookbuilding, but sank below their issue price under Tuesday’s heavy market conditions.

However, Strathcona Resources Ltd.’s 6 7/8% senior notes due 2026 (B3/BB-/B+) outperformed the market with the notes making large gains on news it was acquiring Pipestone Energy Corp.

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