Morning Commentary: Equinix brings €750 million notes; Tenet bonds up 2 points on earnings

By Paul A. Harris

Portland, Ore., Feb. 27 – High-yield bonds were trading flat on Tuesday amid mixed data points, a bond trader said.

The health care sector was an outperformer on the morning, the source added.

Bonds of Tenet Healthcare Corp. were up 2 points following an earnings report stating that the company’s fourth-quarter 2017 revenue came in above expectations.

Tenet also raised its outlook for 2018.

With an improvement in the tone of the market that began late last week recent issues improved slightly, the trader said.

Sprint Corp.’s 7 5/8% senior bullet notes due March 2026 (B3//B+) were 99 5/8 bid, par 1/8 offered on Tuesday. Those bonds were 99˝ bid, par offered late last week.

The par-pricing deal came one week ago, upsized to $1.5 billion from $1 billion.

The majority of last week's deals came in “rich” executions that have tended to impede their performances in the secondary market, sources say.

Equinix offers €750 million

In an otherwise quiet primary market Equinix, Inc. was scheduled to shop a €750 million offering of six-year senior notes (expected ratings B1/BB+/BB) on a Tuesday conference call.

The deal is expected to price on Wednesday.

Joint global coordinator and joint bookrunner HSBC will bill and deliver. Barclays and ING are also joint global coordinators and joint active bookrunners.

BofA Merrill Lynch, Citigroup, Goldman Sachs, JPMorgan, MUFG, RBC, TD and Wells Fargo are joint bookrunners.

The Redwood City, Calif.-based provider of data management services plans to use the proceeds for general corporate purposes, which may include capital expenditures and working capital, and for potential acquisitions and strategic transactions.

Mixed Monday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Monday, according to the trader.

High-yield ETFs saw a healthy $428 million of inflows on the day.

However actively managed funds sustained $27 million of outflows on Monday, the trader said.

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