Midday Commentary: Elan, Provident bonds outperforming amid overall weakness before holiday

By Paul A. Harris

Portland, Ore., May 24 - Freshly minted bonds from Elan Finance plc and Provident Funding Associates LP are outperforming amid overall weakness, as the high-yield market heads into the three-day Memorial Day weekend, a trader said on Friday morning.

The Elan 6¼% senior notes due June 2021 (Ba3/B+) were 101 bid, and doing well. The upsized $850 million deal came at par on Thursday.

Provident's new 6¾% senior notes due June 2021 (Ba3/B+) were 102.25 bid. The upsized $540 million deal priced on Wednesday at par.

Elsewhere recent issues tend to be treading water, the trader said.

The Century Aluminum Co. 7½% senior notes due June 2021 (B3/B) were slightly above new issue price, at 98¾ bid, on Friday morning. The $250 million issue priced at 98.532 to yield 7¾% on Thursday.

It was all quiet in the primary market, mid-morning, with no deal announcements.

Dealers were mum, as to how the week ahead appears to be shaping up, the trader said.

"Seeing as how the Barclays conference will take place, and it's a short week, nobody is claiming deals," the source added.

A $376 million weekly inflow to the high-yield funds, reported on Thursday, was "shocking" news to this source, given the overall weak tone in the market.

However, selling has been orderly, the trader said.

"Nobody is really hitting lowball bids."

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