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Morning Commentary: Better buyers push bonds up ½ point Friday morning; energy names unchanged
By Paul A. Harris
Portland, Ore., Jan. 9 – Cash bonds were up ½ point heading into the New York mid-morning on Friday, according to a trader on the East Coast of the United States.
The market had a good tone after the U.S. Labor Department reported seeing the creation of 252,000 jobs in December, with unemployment falling to 5.6%.
In the high-yield market, the health care sector has proven to be a safe haven for investors weathering blows from battered energy bonds, the trader said.
The Valeant Pharmaceuticals 6 3/8% senior notes due Oct. 15, 2020 were 104 3/8 bid on Friday morning, up from 104 bid, 105 offered on Thursday.
Even the energy sector appeared to be catching a break on Friday, the trader remarked.
The California Resources Corp. 6% senior notes due Nov. 15, 2024 (Ba1/BB) were 81 bid, 82 offered, unchanged to up a ¼ point heading into the mid-morning.
New deal action
The year’s first dollar-denominated junk deals are teed up to price before Friday’s close.
NCI Building Systems, Inc. is set to price its $250 million offering of eight-year senior notes (/B+/). The deal was talked to yield 8¼% to 8½% on Thursday.
Look for the first-time issuer to bring its deal at the tight end of that talk, the trader advised.
Credit Suisse, Citigroup, RBC and UBS are the joint bookrunners.
Meanwhile Centene Corp. showed up Friday with the first dollar-denominated drive-by of 2015.
The St. Louis-based managed care and specialty health care services provider expects to price a $200 million add-on to its 4¾% senior notes due May 15, 2022 (existing ratings Ba2/BB) on Friday trailing a mid-morning conference call with investors.
Official price talk is pending, but early guidance has the deal shaping up in the 99.5 area, according to the trader.
Citigroup, Barclays, SunTrust and Wells Fargo are the joint bookrunners.
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