Morning Commentary: Junk firms as players eye holidays; funds see $615 million inflows

By Paul A. Harris

Portland, Ore., Dec. 21 – Junk was ¼ point to 3/8 of a point better on Thursday morning, according to a bond trader in New York.

With the year-end holidays approaching, secondaries were grinding to a halt, the source said.

Although investors have too much cash to put to work, buyers were not chasing offers, the trader said.

The GTCR W-2 Merger Sub LLC (Worldpay) 7½% senior secured notes due January 2031, a large, liquid, post-Labor Day issue, was 105 bid, 105¼ offered in odd-lot trading after changing hands at 104¾ on Wednesday.

The $2.175 billion deal priced at par in mid-September.

On the heels of the largest amount of December issuance in three years, the primary market sat quiet on Thursday morning, as expected.

However, January could take up where December left off, with high volume in the new issue market, sources say.

Fund flows

The dedicated high-yield bond funds saw $615 million of net daily cash inflows on Wednesday, according to a market source.

High-yield ETFs saw $601 million of inflows on the day.

Actively managed high-yield funds saw $14 million of inflows on Wednesday, the source said.

As the market awaits a Thursday afternoon report on the weekly cash flows of the various asset classes from fund-tracker Refinitiv Lipper, the combined junk funds are tracking $1.375 billion of net inflows for the week to Wednesday’s close, according to the market source.

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