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Morning Commentary: Netflix bounces off lows; VistaJet brings $440 million notes
By Paul A. Harris
Portland, Ore., April 20 – As Treasury yields retreated, the high-yield bond market opened ¼ point better on Wednesday, according to a bond trader in New York.
With the S&P 500 index up 0.45% at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was up 0.47%, or 38 cents, at $80.42.
The bonds of Netflix, Inc. dropped 1½ points overnight on news that the streaming service lost 200,000 subscribers in the first quarter of the year, as revenues slowed.
However, the bonds recovered some of the lost ground by mid-morning on Wednesday, according to a sellside source, who spotted the Netflix 4 3/8% senior notes due November 2026 at 101¼ and the 4 7/8% senior notes due June 2030 at 102.
The Netflix share price was down 37% at mid-morning.
Vermilion Energy Inc.'s 6 7/8% senior notes due May 2030 (B3/BB-/BB-), the most recent issue to clear the market, traded to a premium by Tuesday morning, up ¾ of a point, and was wrapped around par, a trader said.
The oversubscribed $400 million issue priced at 99.241 to yield 7% on Tuesday.
The morning brought one new deal announcement.
VistaJet (VistaJet Malta Finance plc/XO Management Holding, Inc.) expects to price a $440 million offering of seven-year senior notes on Thursday.
The notes, which come in support of VistaJet's acquisition of Air Hamburg, are in the market with initial guidance in the mid-8% area.
Tuesday outflows
The dedicated high-yield bond funds sustained $694 million of net outflows on Tuesday, according to a market source.
High-yield ETFs saw $418 million of outflows on the day.
Actively managed high-yield funds sustained $276 million of outflows on Tuesday, the source said.
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