Morning Commentary: HY secondary quiet, but firm; Carnival rebounds

By Abigail W. Adams

Portland, Me., June 24 – The domestic high-yield primary sector continued its dormant state on Friday despite continued improvement in market tone.

The secondary space was again firm at the open with the cash bond market gaining about 1/8 point as equities continued to rally and Treasuries stabilized with the market dialing back its rate-hike predictions.

While firmer, there remained “a ton of uncertainty,” in the market, a source said, especially with second-quarter earnings around the corner.

Earnings results may put a further damper on risk appetite, a source said.

However, that was not the case for Carnival Corp. which saw its senior notes rebound after dropping ahead of what was expected to be a dire second-quarter business update.

Carnival’s 6% senior notes due 2029 were active on an otherwise quiet morning with the notes gaining 3 points to rise to a 77-handle, a source said.

The yield on the notes, which closed the previous session at 11.6%, was 10 7/8%, early Friday.

The cruise line operator’s most recently priced 10˝% senior notes due 2030 also rose in active trading.

The notes gained 2˝ points and were changing hands in the 92˝ to 93 context in heavy volume early in the session.

The yield on the notes was about 12%.

Carnival’s capital structure was under pressure on Thursday with the market expecting a dire earnings update.

However, Carnival surprised the market and reported an increase in revenue, occupancy and booking volumes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.