Steel Dynamics, Linn lead in second straight huge primary session; funds lose $198 million

By Paul Deckelman and Paul A. Harris

New York, Sept. 4 – There was just no stopping the resurgent high-yield primary market on Thursday. Syndicate sources reported that $4.98 billion face amount of new dollar-denominated, fully junk-rated paper had priced, on top of Wednesday’s $5.84 billion of junk transactions that got done.

All told, Thursday’s issuance came to market in nine deals totaling 11 tranches.

All of the day’s activity came in same-day, quickly marketed drive-by deals except for an upsized $850 million offering from Ultra Petroleum Corp., which had been announced earlier in the week.

As had been the case on Wednesday, much of the day’s volume came from a couple of two-part megadeals.

Steel Dynamics, Inc. had the biggest deal of the day, a $1.2 billion offering of seven-year and 10-year notes.

Linn Energy LLC did a $1.1 billion two-parter split into five-year and seven-year notes.

Traders meanwhile said that there was heavy volume in several of the deals that priced on Wednesday, notably including the two-part offerings from T-Mobile US, Inc., Frontier Communications Corp. and Gannett Co., Inc. and WPX Energy, Inc.’s one-tranche deal.

Statistical market performance indicators were lower across the board for a second straight session on Thursday.

And flows of cash in to or out of high-yield mutual funds and exchange-traded funds were seen having suffered a moderate outflow in the latest week after having been on the upside for three straight weeks before that.

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