Berry Plastics lags issue price; Informatica, Medical Properties ready roadshows; cash flows mixed

By Paul A. Harris

Portland, Ore., May 24 – High-yield bonds opened the abbreviated pre-Memorial Day Friday session a touch lower in a market characterized by extremely low liquidity, sources said.

The high yield CDX was just above 107 bid Friday morning, versus 107 1/8 bid at Thursday’s close, according to a trader.

Liquidity is low, sources said.

“Half of the people are gone now and the other half will be gone by noon,” a portfolio manager remarked.

Although Federal Reserve president Janet Yellen was scheduled to speak Friday, it does not appear that there will be a lot of market participants hanging around to hear what she has to say, a trader said.

Among recent issues, Berry Plastics Corp.’s 5 1/8% second priority senior secured notes due July 15, 2023 (B3/B-) were lagging their new issue price Friday morning, changing hands at 99 1/8 bid, 99 5/8 offered.

The $700 million deal came at par on Thursday.

The week ahead

Among issuers expected to bring offerings in the post-Memorial Day week, there appeared to be solid information on at least two at mid-morning Friday, sources said.

Informatica Corp. is expected to start the roadshow for a $750 million offering of eight-year notes on Tuesday.

Goldman Sachs & Co. will lead the deal, the source said.

Proceeds will be used to help fund the buyout of the Redwood City, Calif.-based enterprise software company by Permira funds and Canada Pension Plan Investment Board for $48.75 in cash per share. The transaction is valued at $5.3 billion.

And split-rated Medical Properties Trust, Inc. (Ba1/BBB-) plans to begin a series of meetings with fixed-income investors on Tuesday ahead of a possible euro-denominated debt offering, pending market conditions.

The meetings are being arranged by Goldman Sachs, Credit Agricole CIB and Credit Suisse.

Thursday flows mixed

The daily cash flows for dedicated high-yield funds were mixed on Thursday, according to a market source.

High-yield ETFs saw $204 million of outflows on the day. Actively managed funds saw $10 million of inflows on Thursday.

Meanwhile dedicated bank loan funds saw $10 million of daily inflows on Thursday.

This was the fifth consecutive positive daily flow for bank loan funds, breaking a long streak of mixed and negative flows, the source noted. He added that with the 10-year Treasury above 2.2% and a central bank that won’t remain patient indefinitely with respect to short term rates people may be finding floating-rate assets more and more attractive.

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