Midday Commentary: Junk flat to softer Friday morning on light volume; Foresight Energy on deck

By Paul A. Harris

Portland, Ore., Aug. 16 - Although the autumnal equinox is still five weeks away, it's a late summer Friday in the high-yield market.

Friday morning's low trading volumes indicate as much, a trader said.

Junk was flat to slightly softer on Friday morning.

"When volumes are this low anything that does happen moves the needle," the trader explained.

"It might just be one or two ETFs selling a few bonds."

ACI Worldwide performing well

Amid the three deals that priced on Thursday, ACI Worldwide, Inc.'s sale of new 6 3/8% senior notes due 2020 (B2/BB-) went well, the trader remarked.

The notes, which came at par in a $300 million deal, were 102 1/8 bid on Friday morning.

Elsewhere there was little or no activity apparent in Shingle Springs Tribal Gaming Authority's new 9¾% senior notes due 2021 (B3/CCC+), said the trader, adding that the par-pricing notes were par 1/8 bid late Thursday, but no fresher levels appeared to be available.

The $260 million issue was downsized from $275 million after having previously been upsized from $250 million.

And some earlier deals are off their Thursday highs, the source added.

The Access Midstream Partners, LP add-on to the 5 7/8% senior notes due April 15, 2021 (Ba3/BB/) were 101 7/8 bid on Friday, down from 102¼ bid on Thursday.

The $400 million tap priced at 101.5 to yield 5.503% on Wednesday.

Foresight Energy on deck

The primary market sat becalmed on Friday morning, with just one deal known to be on deck.

Foresight Energy LLC and Foresight Energy Finance Corp. upsized their offering of eight-year senior notes (expected ratings Caa1/CCC+) to $600 million from $500 million on Thursday and talked the notes with a 7 7/8% coupon at a discount to yield 8%.

Morgan Stanley, Citigroup, Barclays, Deutsche Bank, Goldman Sachs, JPMorgan and UBS are the joint bookrunners.

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