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Morning Commentary: Junk primary market dormant; California Resources, Altice active
By Abigail W. Adams
Portland, Me., Nov. 26 – The domestic primary market remained dormant early in Monday’s session with no new deals launching and nothing on the forward calendar.
While new deal activity continued to be sidelined by the volatility that roiled markets throughout late October and November, the secondary space opened Monday firm with equities in the green and crude oil futures rebounding.
The market was up about ¼ point, a market source said.
With crude oil futures jumping more than 3% early Monday, energy names were in focus.
California Resources Corp.’s 8% senior secured second-lien notes due December 2022 were the most actively traded issue in the secondary space.
The notes were up ½ point to 79¾, sources said.
Calpine Corp.’s 5¾% senior notes due 2025 were also buoyed by rising crude oil futures. The notes were up 5/8 point, a market source said. They were trading around 91½.
The barrel price of WTI crude oil for January delivery was up to $52.07 early Monday, an increase of $1.64 or 3.25%.
In the telecommunications sector, Altice SA’s 7¾% senior notes due 2022 continued to see active trading on Monday with the notes coming in from their gains following Altice Europe’s earnings report last week.
The notes were down ¼ point, a market source said. They were trading around 89½. The notes initially bounced after Altice Europe reported third-quarter earnings on Wednesday.
Altice Europe reported a 10.4% decrease in adjusted EBITDA in the third quarter and a 6.1% decrease in revenue, Reuters reported.
However, the company also reported an increase in customers in France with future growth anticipated.
Meanwhile, high-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – saw outflows of $2.191 billion for the week ended Nov. 21, according to fund-flow statistics generated by AMG Data Services Inc.
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