Morning Commentary: Icahn offers $500 million; busy September for junk issuance eyed

By Cristal Cody

Tupelo, Miss., Sept. 3 – Icahn Enterprises LP and Icahn Enterprises Finance Corp. are on deck in the high-yield primary market Tuesday with a $500 million Rule 144A and Regulation S private placement offering of five-year notes.

The deal kicks off what is expected to be a busy September in the junk bond market.

About $20 billion of issuance is forecast for the month, compared to $23 billion of high-yield supply in September 2018 and $40 billion of volume in both September 2017 and September 2016, according to a BofA Merrill Lynch global research note released on Tuesday.

The primary market slowed in late August with $10 billion of new issues reported over the month, the slowest August since 2015, according to the report.

Volume this month is projected to be offset by $15 billion in calls/maturities and $7.3 billion in coupons, both close to recent averages, according to the BofA Merrill Lynch report.

The first week of September carries $2 billion in coupons and $4.4 billion in redemptions.

The high-yield market saw a wide spread range over the summer, easing from 389 basis points in late July to 450 bps by mid-August before tightening to 409 bps by the end of the month, the BofA Merrill Lynch report said.

On Tuesday, the high-yield market opened down 1/8 point, a market source said.

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