Morning Commentary: Entegris on deck; secondary opens sharply lower; Intertape flat

By Abigail W. Adams

Portland, Me., June 16 – It was a brutal open on Thursday as the market further digested the Federal Reserve’s 75 basis point rate hike and comments from Federal Reserve chair Jerome Powell.

The post-announcement rally which drove the junk market up ˝ to 5/8 point on Wednesday descended into selling pressure on Thursday with the market down ˝ to 1 point.

“This is more what I expected,” a source said. Many sources were puzzled by the market’s strength on Wednesday.

Despite the weak market conditions, the domestic high-yield primary market raised its head with one new offering on deck.

Entegris Inc. plans to price $895 million of eight-year non-call three-year senior notes (expected Ba2/BB/BB) in a Thursday drive-by.

Initial guidance has the deal coming with a 5.95% coupon and a discounted offer price of 90.1 to 91.5 for a yield in the 7˝% area, according to a market source.

The deal is the second of the week with Iris Holdings Inc. pricing $400 million 6.5-year senior notes (Caa2/CCC+) backing the buyout of Intertape Polymer Group Inc. on Wednesday with a coupon of 10% and an initial offer price of 82 to yield 14.361%, according to a market source.

Pricing came in line with coupon talk and wide of official talk for an issue price of 83 to 85 with a yield of 13˝% to 14%.

Original guidance was for an offer price in the low 90s for a yield in the high-11% to low-12% area.

The 10% notes were marked at 81 bid, 82 offered early Thursday.

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