AerCap plans $400 million bullet in drive-by; Wynn weakens on earnings

By Paul A. Harris

Portland, Ore., Oct. 16 – The CDX HY Series 25 index was up ¼ to 3/8 point at mid-morning in quiet Friday trading, according to a trader in New York.

High-yield ETF share prices were higher.

The iShares iBoxx $ High Yield Corporate Bd (HYG) was 19 cents better, at 85.08 per share.

The SPDR Barclays High Yield Bond ETF (JNK), at 36.31 per share, was up 9 cents.

Indicators suggest that ETFs continue to attract the lion’s share of cash flowing into the high-yield asset class, the trader said.

On Thursday Lipper-AMG reported that dedicated high-yield bond funds saw $1.44 billion of inflows during the week to Wednesday’s close.

Of that amount, $1.1 billion flowed into the ETFs, the trader said.

AerCap drive-by

AerCap Holdings NV plans to price $400 million of five-year senior bullet notes (Ba2/BB+/BB+) today, following a conference call with investors.

The deal comes with pro forma guidance of 5%, according to the trader.

However with the book-size already at $2 billion, heading into mid-morning, that talk sounded cheap to the trader who looks for it to tighten to perhaps 4½% to 4¾%.

Joint bookrunner Citigroup will bill and deliver for the aircraft leasing company's general corporate purposes deal.

BofA Merrill Lynch, Credit Agricole, Morgan Stanley, Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Mizuho, RBC, UBS and Wells Fargo are also joint bookrunners (see related story in this issue).

Wynn weakens on earnings

Bonds of Wynn Resorts Ltd. were slightly weaker on Friday, after the company posted disappointing earnings, the trader said.

The Wynn Las Vegas, LLC/Wynn Las Vegas Capital Corp. 5 ½% senior notes due March 1, 2025 were at 89 bid, 90 offered at mid-morning Friday. They were at 91 bid, 91¼ offered on Thursday, nearly ½ point lower on the day.

After the close on Thursday, the company reported that its earnings fell to $87.57 million, or $0.86 per share, in the third quarter of 2015, down from $199.18 million, or $1.95 per share, in the third quarter of 2014, a 56% decline in year-over-year earnings.

Analysts expected Wynn to earn $0.88 per share.

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