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New high-yield bonds eyed, taking attention from distressed; Frontier continues to be weak; Murray mixed
By Stephanie N. Rotondo
Seattle, Aug. 16 – The distressed debt arena yet again took a backseat to the secondary high-yield bond market on Wednesday, as the day was “all new issue driven again,” a trader said.
The focus was centered on Tesla Inc.’s $1.8 billion of 5.3% senior notes due 2025, Staples Inc.’s $1 billion of 8½% notes due 2025 and Trinseo’s $500 million of 5 3/8% notes due 2025.
The ClubCorp Holdings Inc./Constellation Merger Sub Inc. $425 million issue of 8½% notes due 2025 also made an appearance.
But away from new issues, trading was a little more scattered, with little to no fresh news to cause any major swings or surges in activity.
In the telecom sector, Frontier Communications Corp.’s bonds “continued to be sort of weak,” a trader said.
The trader pegged the 11% notes due 2025 with an 86 handle. He also said the 10½% notes due 2022 “dipped below 90,” hitting levels around 89½.
As for Windstream Corp., its 7½% notes due 2023 rose 1½ points to 79.
In the energy arena, Murray Energy Corp. continued to be topical in the wake of the company’s earnings release on Tuesday. But traders gave mixed reviews of the company’s debt in midweek trading.
At one desk, a trader said the 11¼% notes due 2021 “bounced” half a point to 71. At another desk, however, the paper was deemed “a little bit weaker again,” trading in a 70 to 71 context.
Because the St. Clairsville, Ohio-based company is private, the earnings were not readily available. Market sources did remark that the figures were less than stellar.
Among distressed preferreds, Fannie Mae and Freddie Mac paper was weaker on the day, though with no fresh news to act as catalyst.
Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) slipped 2 cents to $6.74. Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) declined 7 cents, or 1.09%, to $6.38.
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