Junk bonds sell off as credit spreads widen, crude oil plummets; Intelsat, Avantor down

By Paul A. Harris and Abigail W. Adams

Portland, Me., Dec. 20 – With the high-yield primary market closed since late November, all eyes are on January and the deals it will bring, especially given the current market conditions.

The European primary market is poised to outpace the domestic market, which is expected to start to the new year slow, sources said.

Meanwhile, it was another brutal day for the secondary space with losses widening as credit spreads again blew out and crude oil futures sank further below the closely watched $50 threshold.

The secondary space was active under the deteriorating conditions with several names trading down amid a broad selloff, a market source said.

High-yield ETFs hit on 52-week lows in 10x their average trading volume.

California Resources Corp.’s bellwether 8% senior notes due 2022 remained the most actively traded issue in the secondary space with the notes dropping to a 65 handle.

The energy space continued to lead the secondary market lower but the pain was felt across sectors.

Intelsat’s junk bonds dropped 1½ to 2 points; Avantor Inc.’s 9% senior notes due 2025 dropped 2½ points; Frontier Communications Corp.’s junk bonds dropped 2 to 3 points; and Staples, Inc.’s 8½% senior notes due 2025 dropped more than 3 points.

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