Morning Commentary: Oil, Chinese data spark rally; Neiman bonds dip; AmeriGas, Concho on deck

By Paul A. Harris

Portland, Ore., Dec. 13 – The recent rally in oil prices and a positive Tuesday report from the National Bureau of Statistics of China sparked a rally in the global capital markets, sources say.

The high-yield market was up 1/8 point at mid-morning, according to a portfolio manager, who added that indexes were up and futures were up as well.

High-yield ETFs were higher at mid-morning.

The iShares iBoxx $ High Yield Corporate Bd (HYG) was up 0.22%, or 19 cents, at $86.56 per share. The SPDR Barclays High Yield Bond ETF (JNK) was also 0.22% higher, up 8 cents at $36.50 per share.

Oil prices were giving up some ground at mid-morning.

The barrel price of West Texas Intermediate crude for January 2017 delivery was down 33 cents, or 0.62%, at $52.50.

However energy stocks are lately vast outperformers in the high-yield index, sources say.

Among recently priced energy paper, the Chesapeake Energy Corp. 8% senior notes due Jan. 15, 2025 (Caa3/CCC-) were 102½ bid on Tuesday morning. The $1 billion issue came at 98.522 to yield 8¼% a week ago.

However the Antero Resources Corp. 5% senior notes due March 1, 2025 (Ba3/BB) were hanging right around their issue price on Tuesday, the trader said.

The $600 million issue priced at par last Wednesday.

Away from the energy sector, bonds of Dallas-based luxury retailer Neiman Marcus Group Ltd. were lower on earnings.

The Mariposa Borrower, Inc./Mariposa Merger Sub LLC (Neiman Marcus Group) 8% senior notes due Oct. 15, 2021 were 75 bid on Tuesday, down from 79 7/8 bid on Monday, the trader said.

Neiman Marcus reported a 7.4% decrease in total revenues for the fiscal quarter ended Oct. 29, 2016. The company reported a net loss of $23.5 million.

AmeriGas, Concho on deck

Energy names are out front in the primary market, as well.

Two energy drive-by deals were announced on Tuesday.

AmeriGas Partners, LP plans to price a $550 million offering of 8.5-year senior bullet notes (expected ratings Ba3//BB) Tuesday afternoon.

Initial guidance has the public debt refinancing deal coming with a yield in the 5¾% area, a trader said.

Wells Fargo Securities LLC is the left bookrunner.

Concho Resources Inc. plans to price a $600 million offering of eight-year senior notes in a quick-to-market Tuesday transaction.

Initial guidance has the debt refinancing deal shaping up with a yield in the 4¾% area.

BofA Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo are the joint bookrunners.

AmeriGas and Concho join American Midstream Partners, LP, which expects to price a $300 million offering of five-year senior notes (expected ratings Caa1/B) on Tuesday trailing a high-yield roadshow.

The Wells Fargo deal was talked to yield 8¼% to 8½% on Monday.

And look for a sizable energy deal to show up on Thursday, a syndicate banker advised.

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