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Morning Commentary: Junk catches a bid; CenturyLink up after earnings report; primary quiet
By Paul A. Harris
Portland, Ore., Feb. 15 – High-yield bonds caught a bid on Thursday, a trader said, marking the market perhaps ¼ point higher in the early going.
High-yield ETFs were higher at mid-morning.
The SPDR Blmbg Barclays High Yield Bd ETF (JNK) was up 0.3%, or 11 cents, at $35.99 per share.
The bonds of CenturyLink, Inc. traded higher after the company reported that its fourth-quarter revenues grew 24% year-over-year, boosted by positive numbers related to CenturyLink's acquisition of Level 3 Communications.
The CenturyLink 7½% series Y senior notes due April 2024 were par bid, par ¼ offered at mid-morning, according to a trader, who added that they had been as good as par ¼ bid, par ½ offered earlier in the session.
Those bonds were trading in the high 90s earlier in the week, the trader said.
The distressed bonds of Frontier Communications Corp. were up 2 points in active trading on Thursday, with the Frontier 10½% senior notes due September 2022 trading at 81¾ bid, 82 offered.
Those bonds traded at 79¾ on Wednesday night, the trader said.
Among recent issues the Jones Energy Holdings, LLC 9¼% senior secured first-lien notes due March 2023 (B2//B) were up ¼ point on Thursday morning at 98¾ bid, 99 offered.
The $450 million deal, which underwent epic transformation amid rugged conditions in the primary market (pricing concessions, document revisions, covenant tweaks) priced at 97.526 to yield 9 7/8% last Monday, the most recent issue to clear the market.
Meanwhile the primary market remained sidelined on Thursday morning but should reactivate if the capital markets continue to stabilize, a trader said.
There is a modest pipeline of three to five deals, none of them big, a syndicate banker said.
All of them are market-sensitive, the banker added.
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