Junk steadies after opening 2016 with loss; Chesapeake gains, primary calm, but M&A deals expected

By Paul Deckelman and Paul A. Harris

New York, Jan. 5 – After having stumbled right out of the gate during the first session of the new year on Monday, the high yield market seemed to find its footing on Tuesday.

Traders said the market – helped by a steadying trend in equities after Monday’s stock slide – built upon the mildly positive momentum that had been seen late in Monday’s session and finished Tuesday unchanged to higher in spots.

One of the most notable of those spots was Chesapeake Energy Corp., whose recently issued seven-year secured notes jumped by several points and were the most actively traded credit in Junkbondland.

However, even its existing unsecured notes were points better on the day, though on considerably less volume than the secured notes generated.

Chesapeake’s paper firmed despite world crude oil prices having fallen back for a second straight session on Tuesday.

That hurt other energy credits not armed with the Chesapeake bonds’ particularly favorable circumstances, notably Eclipse Resources Corp., whose bonds lost several points in active trading.

Away from the energy sphere, there were active dealings, all to the upside, in healthcare oriented names such as Community Health Systems Inc. and Valeant Pharmaceuticals International Inc.

The primary market meantime remained silent, with no pricings expected or seen – the last prior pricing, in fact, took place all the way back on Dec. 11.

However, market sources were on Tuesday expressing confidence that things in the new-deal sphere would be picking up soon.

Statistical measures of junk market performance turned higher across the board on Tuesday, rebounding from Monday’s all-around lower session. It was the second higher session in the last three trading days, including Thursday – the final session of 2015, before Friday’s market close.

With the market measures having been mixed or higher during the preceding few sessions before that, Monday’s lower session had been its first losing day since back on Dec. 18.

© 2015 Prospect News.
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