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Morning Commentary: Junk opens unchanged; Comstock Resources, Bruin E&P deals on deck
By Paul A. Harris
Portland, Ore., July 20 – Junk opened the Friday session unchanged as equities and oil prices see-sawed in the early going, a trader said.
High-yield ETFs were slightly better at mid-morning. The iShares iBoxx $ High Yield Corporate Bd (HYG) was up a nickel, or 0.06%, at $85.63 per share.
The barrel price of West Texas Intermediate crude for August 2018 delivery was pushing seventy bucks at mid-morning at $69.68, up 22 cents or 0.23%.
Recent issues were performing well in the secondary market.
Against a backdrop of stronger energy prices, the new Magnolia Oil & Gas 6% senior notes due August 2026 (B3/BB-/BB-) were up about ¾ of a point to 1 point at par ¾ bid, 101¼ offered, the trader said.
The $400 million issue priced at par on Tuesday.
The recently price Altice France SA 8 1/8% senior secured notes due Feb. 1, 2027 (B1/B) were up 1 point to 1¾ points at 101¼ bid. The upsized $1.75 billion (from $1.25 billion) issue priced at par, also on Tuesday.
Energy names eye primary
Two energy issues appear headed for Friday executions, sources say.
Both are coming with significant concessions in attempts to cross the finish line, they add.
Bruin E&P Partners LLC is talking its $600 million offering of eight-year senior notes (B3/B+) to yield 8¼% to 8½%.
Official talk came well wide of the 7½% to 7¾% area initial price talk.
Books are scheduled to close at noon ET on Friday, and the deal is set to price thereafter.
Meanwhile Comstock Resources, Inc. came out with guidance well wide of initial price talk on its $850 million offering of eight-year senior notes (Caa1/B/B).
The deal is heard to be coming with a 10¼% coupon at a discount to yield 10¾%, versus initial guidance in the 9% area, the source said, adding that interest in the deal at the lower level was extremely thin.
Comstock is also expected to price on Friday.
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