U.S. Steel, Diamond Offshore, Penske price; new Penske bonds jump; Hertz rebounds

By Paul Deckelman and Paul A. Harris

New York, Aug. 1 – August in Junkbondland began with a roar on Tuesday, as a trio of issuers brought $1.55 billion of new U.S. dollar-denominated high-yield paper to market.

United States Steel Corp. had the big deal of the day, pricing $750 million of 10-year notes.

Primaryside sources meantime heard that its sector peers such as AK Steel and Big River Steel LLC might soon be doing junk deals themselves.

Energy driller Diamond Offshore Drilling, Inc. brought a $500 million issue of eight-year notes to market.

And the session’s sole quickly shopped transaction came from car-seller Penske Automotive Group, Inc., which priced $300 million of three-year subordinated notes.

The new Penske paper was heard by traders to have firmed smartly when it hit the aftermarket after pricing.

Monday’s new deal from Cliffs Natural Resources, Inc. and Friday’s offering from United Rentals, Inc., were among the day’s most actively traded credits.

Away from the new deals, traders saw Hertz Corp. paper – which had gotten clobbered in Monday’s action – regaining some of their lost ground on Tuesday.

Statistical market performance measures turned higher across the board on Tuesday after having been mixed over the previous two sessions. They had turned mixed on Friday after having moved lower on Thursday for the first time since July 6.

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