| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers V > Headlines for Valeant Pharmaceuticals International Inc. > News item |
Morning Commentary: Junk market sags in early Tuesday trading; IntelSat, PetSmart bonds sell off
By Paul A. Harris
Portland, Ore., Feb. 23 – Junk opened unchanged on Tuesday but was trading lower at mid-morning, according to a trader based in New York.
There was some small buying on the part of ETFs, early on, the source added.
High-yield ETFs were lower on the day. The iShares iBoxx $ High Yield Corporate Bd (HYG) was down 52 cents, or 0.66%, at $77.79 per share at mid-morning. SPDR Barclays High Yield Bond ETF (JNK), at $32.48 per share, was down 22 cents, or 0.69%.
PetSmart drops on report
Bonds of PetSmart, Inc. sold off on Tuesday after Moody’s Investors Service put out a report stating that the company’s $800 million dividend to shareholders using balance sheet cash is a credit negative.
Bonds were down 2 points at mid-morning, which represented a certain amount of recovery, as they had been down 3 points to 4 points earlier, the trader said.
The PetSmart (Argos Merger Sub Inc.) 7 1/8% senior notes due March 1, 2023 were at par ¾ bid, 101¾ offered on Tuesday. They were at 104 bid on Monday, the trader added.
The PetSmart dividend “signals a more aggressive financial policy since a portion of operating cash is being used to fund distributions rather than for debt reduction,” Moody's said.
“The company’s B1 corporate family rating and stable outlook are not affected at this time.”
Elsewhere the bonds of Intelsat SA continued to sell off on Tuesday, as the company released guidance for fiscal year 2016 that was below analysts’ guidance. The entire IntelSat structure was down 6½ points to 7 points, the trader said.
However the bonds of Valeant Pharmaceuticals International Inc. were 4 points to 5 points off Monday’s lows on news that the company will hold a Feb. 29 conference call to discuss a possible restatement of its 2015 fourth-quarter earnings.
© 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.