Morning Commentary: United Rentals draws crowd; junk ETFs see big Thursday inflows

By Paul A. Harris

Portland, Ore., July 31 – On an otherwise quiet late July Friday in the dollar-denominated high-yield primary market, United Rentals (North America), Inc. came with a $1.1 billion offering of senior notes due Feb. 15, 2031 (Ba3/BB-).

Early guidance is in the low 4% area, according to a bond trader, who added that the order book stood at around $1.5 billion at Friday mid-morning, which could allow the Stamford, Conn.-based equipment rental giant to get the deal done as low as 4%.

Official timing from the dealer remained pending at mid-morning; however, the market expects a Friday drive-by execution.

In Europe, Italy-based financial services company doValue SpA was scheduled to close the books on its €265 million offering of five-year senior secured notes (BB/BB) earlier Friday.

Talk specifying a 5% coupon at a discount to yield in the 5¼% area surfaced Thursday.

With U.S. stock indexes trading in the red at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was down 0.25%, or 21 cents, at $85.02.

Among recent issues, the G-III Apparel Group Ltd. 7 7/8% senior secured notes due August 2025 (Ba3/BB) were par ¾ bid, 101¼ offered on Friday morning, a trader said.

The upsized $400 million issue (from $350 million) priced at par on Thursday, the upsize costing the company a one-notch downgrade from S&P, to BB from BB+.

And the NFP Corp. 6 7/8% senior notes due August 2028 (Caa2/CCC+) were a little weaker Friday morning at par ¼ bid, par ¾ offered, according to the trader, who added that the paper eased from earlier levels of 101 bid, 101¼ offered.

The upsized $1.25 billion issue (from $950 million) priced on Thursday at par.

Big Thursday inflows

High-yield ETFs saw a massive $1.57 billion of daily inflows on Thursday, according to a market source.

Actively managed high-yield funds also saw hefty inflows of $205 million on the day, bringing the combined funds' take to $1.77 billion on the day, the source said.

News of Thursday’s daily flows trails a Thursday afternoon report that the combined funds saw $295 million of net inflows for the week to Wednesday's close, according to the Refinitiv Lipper Fund Flow Report Newsline.

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