Junk secondary lifted on Fed announcement; Carvana claws back; Charter gains; Uber mixed

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 4 – There was no primary market news on Wednesday, as the Federal Reserve Bank's Federal Open Market Committee fulfilled the market's expectation by raising the benchmark Fed Funds Rate by 0.5%, the biggest increase in over two decades.

Meanwhile, it was another day of head-spinning volatility with the secondary space weak early in the session as the market awaited the Fed’s announcement.

“Then Powell began to talk,” a source said.

Buyers returned to risk assets in full force after Federal Reserve chair Jerome Powell assured of no 75 bps rate increase, although the committee planned more 50 bps rate increases at future meetings.

Several badly battered bonds in the BB and CCC index continued to improve as recession jitters waned.

Carvana Co.’s 10¼% senior notes due May 2030 (Caa2/CCC) remained in focus with the notes continuing to claw back after steep losses during initial days in the market.

Charter subsidiary CCO Holdings LLC’s junk bonds (B1/BB-) were also on the rise in active trading.

However, Uber Technologies, Inc.’s junk bonds were mixed post-earnings with its short-duration notes on the rise while its low-coupon, longer-duration notes were largely unchanged.

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