Morning Commentary: Junk bonds off a touch early Friday, but trader still sees better buyers

By Paul A. Harris

Portland, Ore., May 13 – High-yield bonds were a touch lower in the Friday mid-morning, according to a trader on the East Coast of the United States.

“We’re still seeing better buyers,” the trader said.

High-yield ETFs were also moderately lower. The iShares Trust - iShares iBoxx $ High Yield Corporate Bond ETF (HYG) was down 13 cents, or 0.16%, at $83.02 per share. SPDR Series Trust - SPDR Barclays High Yield Bond ETF (JNK), at $34.93 per share, was down a penny, or 0.03%.

Earnings reports from companies in the health care and retail sectors had the requisite issues in motion, the trader said.

The J.C. Penney Corp., Inc. 8 1/8% senior notes due Oct. 1, 2019 were holding in fine at 99 bid, unchanged on the morning. They had been as low as 97¾ bid, the trader said.

Bonds of Valeant Pharmaceuticals International Inc. were also active, the trader said.

Thursday issues

Among bonds that priced on Thursday, the Ryerson Holding Corp. 11% senior secured notes due May 15, 2022 (Caa1/B-) were performing very well on Friday morning, at 102½ bid, 103 offered.

They had traded as high as 103 bid on the break, sources said.

The deal priced inside of price talk.

One account commandeered significant covenant changes and took down at least $100 million of the deal, sources say.

Also Performance Food Group, Inc.’s 5½% senior notes due June 1, 2024 (B2/BB-) were 101½ bid (“if not higher”) on Friday morning, the trader said.

The $350 million issue, which priced at par on Thursday, did really well, the source added.

© 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.