Treehouse Foods drives by, moves up; junk rebounds on oil price surge; funds lose $2 billion

By Paul Deckelman and Paul A. Harris

New York, Jan. 21 – The high-yield primary sphere came back to life on Thursday, seeing its first new-deal pricing in 10 calendar days as Treehouse Foods, Inc. came to market with a quickly shopped $775 million offering of eight-year notes – the biggest junk bond deal so far this year.

Traders said the new bonds firmed in initial aftermarket dealings late in the session.

Traders also said that the secondary realm – after being roundly beaten down on Wednesday amid lower oil prices and a broad retreat in the equity markets – mounted an impressive turnaround on Thursday, helped by improvements in both stocks and, especially, oil.

A 4% rise in crude prices helped lift the recently hard-hit bonds of exploration and production companies such as Whiting Petroleum Corp., Oasis Petroleum Inc., WPX Energy Inc. and Genesis Energy, LP, among others.

Away from the energy names, Sprint Corp.’s bonds were seen higher across the board, in contrast to Wednesday’s selloff.

Statistical measures of junk market performance turned higher on Thursday – their first such unified upturn since Jan. 5. Since then, the market gauges have alternated between being mixed on the day or lower all around.

But another numerical indicator – flows of investor cash into or out of high-yield mutual funds and exchange-traded funds – posted its third consecutive net outflow this week as $2 billion more left those funds than came into them.

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