Morning Commentary: Murray Energy bonds unchanged following lender presentation; primary quiet

By Paul A. Harris

Portland, Ore., Aug. 24 – High-yield bonds were unchanged on Thursday, according to a trader in New York, who reported seeing better bidders.

Accounts continue to seem to have cash to put to work, the trader said.

High-yield ETFs were flat to slightly higher. The SPDR Blmbg Barclays High Yield Bd ETF (JNK) was up 3 cents, or 0.08%, at $37.03 per share.

The primary market remained quiet on Thursday and is expected to remain quiet until after the Labor Day holiday weekend, which gets underway following the Sept. 1 close.

Bonds of Murray Energy Corp. were unchanged Thursday morning following a Wednesday presentation to lenders that was thought to have gone well, the trader said.

The Murray Energy 11¼% senior secured second-lien notes due April 15, 2021 continued to trade in the low 60s at 60 bid, 61 offered, the source said.

A buyside source saw them at 60¼ bid, 61¼ offered.

Early Wednesday the bonds traded at 67 but fell when the U.S. Department of Energy declined to intervene in order to keep the coal fired power plants of bankrupt FirstEnergy Solutions operating.

FirstEnergy is a key customer of Murray Energy.

However the lender presentation may have stanched the bleeding, somewhat.

The 11¼% notes traded at 60 7/8 on Thursday morning, whereas the final Wednesday trade was 60½, the buysider said, adding that Thursday morning trading was two-way.

Recent issues

It continues to be good news/bad news among recent issues, sources say.

Some of the recently priced issues continue to trade well.

These include the Big River Steel LLC 7¼% senior notes due 2025 (B3/B), trading at 103 3/8 bid, 104 3/8 offered.

The $600 million issue priced at par on Aug. 15.

Elsewhere, the Restaurant Brands International Inc. 5% second-lien senior secured notes due 2025 (B3/B-) were 101½ bid, 103 offered on Wednesday.

The $1.3 billion issue priced at par on Aug. 8.

While the secondary market performance of the Tesla, Inc. 5.3% senior notes due 2025 (B3/B-) has been poor, the bonds appear to have seen a modicum of improvement recently, sources said on Thursday.

The Tesla 5.3% notes were 97 7/8 bid on Thursday, whereas they were 97¼ bid earlier in the week.

The buyside source had the Tesla paper at 98¼ bid, 98 5/8 offered.

The deal priced at par in an upsized $1.8 billion issue (from $1.5 billion) on Aug. 10.

However the Staples Inc. 8½% senior notes due Sept. 15, 2025 (B3/B-) continue to decline in the secondary market.

The Staples 8½% notes, which priced at par in a downsized $1 billion issue on Aug. 14, were 96¾ bid, 97¼ on Thursday.

Earlier in the week they were seen at 97¼ bid, 97¾ offered.

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