Morning Commentary: New paper from Callon active; new deal volume to pick up next week

By Abigail W. Adams

Portland, Me., June 1 – The only new dollar-denominated high-yield bond to price in the past week remained active in the secondary space early in Friday’s session.

Callon Petroleum Co.’s newly priced 6 3/8% senior notes due 2026 (B3/B+) were largely unchanged in active trading with the notes wrapped around par, a market source said.

Callon priced an upsized $400 million offering of eight-year senior notes (B3/B+) at par to yield 6 3/8% in a Thursday drive-by.

Pricing came at the tight end of talk for a yield of 6 3/8% to 6½%, according to a market source. Initial guidance was whispered in the 6½% area.

While both the domestic and European primary market was quiet over the past week, the new deal pipeline is expected to pick back up next week, market sources said.

While political instability in Spain and Italy roiled the markets over the past week and prevented the European primary market from doing much business, that may change next week, a London-based source said.

“If we can close the week on a positive note, next week we’ll be back on track with new deals,” a market source said.

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