Morning Commentary: Junk primary closes week quietly; New Home notes at a premium

By Abigail W. Adams

Portland, Me., March 28 – The domestic high-yield primary market stood poised for a quiet close to the holiday-truncated week after a flurry of activity over the past three sessions.

While the active forward calendar was empty heading into the long weekend, the active pace of issuance is expected to continue as issuers address their refinancing needs while credit spreads remain near their tights of the year, sources said.

Meanwhile, the cash bond market was either side of unchanged early Thursday after a largely sideways week.

While unchanged on Thursday, the secondary space is closing the first quarter of 2024 on firm footing with buyers active at quarter’s end with widespread expectations for rate cuts to begin in June, a source said.

New issues remained the market’s focus and area where money is being put to work with all-in yields at historic heights despite the tight credit spreads.

The new issues to price over the past week continued to put in solid aftermarket performances with all trading at a premium to issue price.

New Home Co. Inc.’s 9¼% senior notes due 2029 (B2/B-) were no exception with the notes holding the strong gains made on the break.

The 9¼% notes continued to trade in the par ½ to 101 context early Thursday, a source said.

New Home priced the $300 million issue of the 9¼% notes at par on Wednesday.

The coupon came on top of talk.

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