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Morning Commentary: Junk continues October rally; Citrix/Tibco 6½% notes sharply higher
By Paul A. Harris
Portland, Ore., Oct. 4 – Catching a tailwind from hard-rallying equities around the globe, the high-yield bond market continued to rally on Tuesday, according to a trader in New York.
“Every bond is bid for,” said the trader, “... including the bonds no one wanted last week.”
With the high-yield index up 1 1/8 points and cash bonds up a point, offers-wanted-in-competition (OWIC) lists were outnumbering bids-wanted-in-competition (BWIC) lists 10-to-one, the source said.
The Citrix Systems Inc./Tibco Software Inc. 6½% senior secured notes due March 2029 (B2/B) were up half a point to as much as 2 points on the morning, said the trader, spotting that paper at 87 bid, 87¼ offered.
The massive $4 billion buyout deal priced late last month at 83.561 (initial guidance was 90), coming not only with a huge discount but also with sweeping concessions augmenting protection for investors.
Elsewhere the Ford Motor Co. 6.1% senior green notes due August 2032 (Ba2/BB+) were up half a point to 1 full point, at 91¼ bid, 91¾ offered, the trader said.
That follows a substantial rally in those Ford green bonds on Monday, in which they saw as much as 2 points of price improvement, according to market sources.
Late last week they were 88½ offered.
The Ford 6.1% green notes came at par on Aug. 16 in a $1.75 billion high-grade-style execution.
Meanwhile a regeneration of the primary market, in earnest, may have to wait until the present capital markets rally proves a little more durable, the trader said.
New issue news remained sparse on Tuesday.
Enerflex Ltd. was scheduled to kick off its $625 million offering of five-year senior secured first-lien, second out notes (expected ratings B2/BB-/BB-).
And in the euro-denominated market, Madrid-based fashion retailer Tendam Brands SAU announced plans to sell €300 million of 5.5-year senior secured floating-rate notes.
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