High yield off 1/8 with negative sentiment; CrownRock on deck

By Paul A. Harris

Portland, Ore., April 5 - Cash bonds were off by about 1/8 point in the high-yield market early Friday, as the poor U.S. jobs numbers generated negative sentiment driven in the capital markets in Europe and the United States, a trader said.

Recent issues are holding in, however, the trader added, noting that cash flows into the high-yield asset class, although they have moderated, remain positive; junk saw $32 million of inflows for the week to Wednesday, with $50 million flowing into high-yield mutual funds, while high-yield exchange-traded funds saw $18 million of outflows.

Looking at Thursday's deals, the new American Builders & Contractors Supply Co. Inc. (ABC Supply) 5 5/8% senior notes due April 2021 (B3/B) were at 102¼ bid, 103¼ offered, the trader said, noting that the deal is off its highs. The bonds broke to a 103 bid on Thursday, the source notes.

The downsized $500 million issue priced at par on Thursday.

The new Bonanza Creek Energy, Inc. 6¾% notes due April 2021 (B3/B-), which also came at par on Thursday, were at 102 5/8 bid, 103 1/8 offered on Friday morning.

The notes came in a $300 million offering which was upsized from $250 million.

CrownRock on deck

On deck for Friday is CrownRock, LP and CrownRock Finance, Inc.'s upsized $400 million sale of eight-year senior notes (/CCC+/). The transaction, which has been increased from $350 million originally, is talked to yield 7% to 7¼%.

Credit Suisse and Mitsubishi UFJ Securities are the joint bookrunners.

Some observers have also been watching for terms on the deal from Scotland's KCA Deutag Finance plc.

The company roadshowed an $860 million offering of seven-year senior secured notes (B3/B) that has gone "radio silent," market sources say.

Word is that the deal has been postponed but not pulled, and could price next week in a smaller size, a London-based debt capital markets banker said, noting that the oil and gas services company is in a cyclical business and is notably leveraged.

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