Morning Commentary: California Resources bonds soar in secondary, ETFs loom large in outflows

By Paul A. Harris

Portland, Ore., Sept. 12 – The California Resources Corp. senior notes (Ba1/BB/) that all priced at par Thursday in three bullet tranches – a whopping $5 billion overall total – rocketed higher in the secondary market, a trader said on Friday morning.

The 5% notes due Jan. 15, 2020, which came in a tranche sized of $1 billion, were 102.25 bid, the trader said.

The 5½% notes due Sept. 15, 2021, which came in a tranche sized of $1.75 billion, were 103.25 bid.

And the 6% notes due Nov. 15, 2024, which came in a $2.25 billion tranche, were 103.5 bid.

The notes in each tranche priced at the wide ends of yield talk that had come in by 25 basis points.

That talk had backed up by 25 bps during the time the deal was in the market, sources said.

Hence the notes all ultimately came at 50 bps concessions relative to the tight ends of initial yield guidance.

ETFs see most outflows

Exchange traded funds sustained 58% of the $766 million of outflows that hit dedicated high-yield funds for the week to Wednesday’s close, the trader said, referring to numbers reported Thursday by Lipper-AMG.

ETFs represented 37% of the previous week’s $198 million outflow, the source added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.