High yield: June primary starts up with $2.02 billion, executions solid

By Paul A. Harris and Cristal Cody

Portland, Ore., June 1 – The month of June got off to a moderately busy start in the high-yield new issue market.

Three drive-by issuers, bringing single tranches, raised $2.02 billion.

Two of the three deals upsized.

Executions were solid, with two deals pricing at the tight ends of talk, while the other priced in the middle of talk.

There were also buildups in the Yankee and European active forward calendar (see related stories in this issue).

June figures to be a comparatively busy month in the European market, with as much as €10 billion expected to come in the run-up to July, a London-based source said.

Secondary review

Following Cinemark USA, Inc.’s recent issue, the company’s existing 5 7/8% notes due 2026 (B) traded Tuesday afternoon at 104¼ bid in strong volume, up about ¾ point from the same session a week ago, a source said.

The notes were not active on Friday in secondary trading.

In other secondary trading, Charter Communications Operating LLC’s bonds have been heavily traded over the past week, a market source said.

Charter’s 3.9% notes due 2052 (Ba1/BBB-) edged up about ¼ point on Tuesday to the 96¾ bid area in trading after improving Friday ¼ point on nearly $8 million of volume.

$499 million Friday outflows

The dedicated high-yield bond markets sustained $499 million of net outflows on Friday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs had $459 million of outflows on the day.

Actively managed high-yield funds sustained $40 million of outflows on the day, the source said.

It was the 12th consecutive outflow from the actively managed funds, but the lightest outflow in that series, according to a Prospect News analysis of the data.

That stretch of redemptions, now totaling $4.4 billion, is the biggest that the actively managed funds have seen since March 2020, the market source said.

Indexes mixed

Indexes were mixed on Tuesday following the long holiday weekend.

The KDP High Yield Daily index climbed 4 points to close at 69.57 with a yield of 3.88%.

On Friday, the index was up 3 points to close at 69.53 with the yield at 3.89%.

The index posted a gain of 8 points for the week ahead of the holiday.

The CDX High Yield 30 index increased Tuesday to 109.79 from 109.69 on Friday.

The index posted a cumulative gain of 29 bps last week.

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