Dollar junk primary continues slumber; DISH rises, Hughes Satellite falls on merger talk

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 6 – The dollar-denominated junk primary market remained dormant on Thursday and is apt to end up getting skunked for the holiday-abbreviated week, sources said.

With only a summer Friday remaining ahead of the weekend, the market is indeed likely to put up a goose egg for the week, a syndicate banker conceded. The banker added that the week ahead is quite likely to see a reactivation of new issue business in the dollar-denominated market.

As U.S. investors demonstrated risk aversion on Thursday, on the heels of financial data indicating that there are inflationary pressures that remain to be dealt with by the Fed, it was a different story in the euro-denominated market.

The euro session saw a trio of single-tranche issuers – Amara Nzero, Avis Budget Finance plc and Profine – price an overall total of €1.05 billion.

Meanwhile, it was a heavy day in the secondary space with selling pressure setting in on the heels of blockbuster employment reports.

News reports that Charlie Ergen, co-chair of DISH Network Corp. and EchoStar Corp., was considering a merger of the two entities sparked renewed buying interest in DISH’s junk bonds, which climbed 1 to 2½ points in heavy volume.

However, the news also sparked selling in EchoStar subsidiary Hughes Satellite Systems Corp.’s secured and unsecured notes, which fell 2 and 4 points, respectively.

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