Morning Commentary: Junk becoming heavy on relatively high volume; Labeyrie on deck

By Paul A. Harris

Portland, Ore., Feb. 3 – The high-yield market was becoming heavy on relatively high volume, according to a junk bond trader, who added that some names were down ½ point while others were down a point heading into the New York mid-morning.

High-yield ETFs were substantially lower. The iShares iBoxx $ High Yield Corporate Bd (HYG) was down 19 cents, or 0.25%, at $77.68 per share heading into the mid-morning. SPDR Barclays High Yield Bond ETF (JNK), at $32.45 per share, was off a dime, or 0.32%.

The ETFs saw big outflows of $594 million on Tuesday, according to a portfolio manager.

However actively managed high-yield funds were positive on the day, seeing $35 million of inflows.

Labeyrie on deck

Although a substantial calendar has built up since the end of January, primary market activity was muted on Wednesday morning.

Labeyrie Fine Foods SAS talked a proposed €80 million add-on to its 5 5/8% senior secured notes due March 15, 2021 (/expected B/expected B+) to price at 99.5, plus or minus 0.25 point.

Books were scheduled to close earlier Wednesday.

Global coordinator BNP Paribas bill and deliver. Deutsche Bank is also a global coordinator. Credit Agricole, HSBC and Natixis are joint bookrunners.

The Cam, France-based specialty foods company plans to use the proceeds to fund acquisitions (see related story in this issue).

Meanwhile there are 10 tranches from eight issuers presently on the active calendar.

The market awaits official price talk and timing updates on all of this business, a portfolio manager said on Wednesday morning.

The deals include Endurance International Group Holdings Inc.’s $350 million (initial guidance 10½% to 11%), Vizient, Inc.’s $400 million, Manitowoc Food Service, Inc.’s $425 million (initial guidance 10%), Manitowoc Cranes’ $250 million (initial guidance 10½% to 11%), Acadia Healthcare Co. Inc.’s $390 million, Moby SpA’s €300 million, WFS Global Holding SAS’s €240 million and LeasePlan Corp. NV’s €1.55 billion equivalent in three tranches.

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