Morning Commentary: Junk opens week unchanged as 2023 finish comes into view

By Paul A. Harris

Portland, Ore., Dec. 18 – The high-yield bond market opened unchanged on Monday, sources said.

With the Dow Jones industrial average up 0.03% at midmorning the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was down 0.1%, or eight cents, at $76.85.

The GTCR W-2 Merger Sub LLC (Worldpay) 7 ½% senior secured notes due January 2031, a large, liquid, post-Labor Day issue, was unchanged on the morning at 104 5/8 bid, 104 ¾% offered, according to a bond trader.

The $2.175 billion deal priced at par in mid-September.

Among recent issues, the Icahn Enterprises LP and Icahn Enterprises Finance Corp. (IEP) 9 ¾% senior bullet notes due Jan. 15, 2029 (Ba3/BB) changed hands in an odd-lot trade at 101 1/8, unchanged on the morning, the trader said.

The issue size increased to $700 million from $500 million with the placement of a $200 million add-on that came in a Friday drive-by at 100.625.

The original $500 million priced on Dec. 12, 2023.

The primary market remained quiet on Monday, although a syndicate banker disclosed that a Monday deal-launch had been (and possibly might still be) under discussion.

“If it doesn’t show up on the screens today it’s almost certainly next year’s business,” the official said, forecasting that 2023 high-yield issuance is probably now concluded.

January issuance will be robust, with a long line of issuers already beginning to line up, the banker said, adding that the Jan. 8 week promises to be a big one in the primary market.

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