Morning Commentary: LifePoint Health brings $500 million drive-by as market rallies

By Paul A. Harris

Portland, Ore., April 6 – Against a backdrop of hard-rallying equities junk opened half a point better as the April 6 week got underway, traders said.

“Everything is better,” said a New York-based trader who added that trading volume was by no means intense on Monday morning.

With the S&P 500 index up 4.6% at midmorning, the iShares iBoxx $ High Yield Corporate Bd (HYG) was up 1.96%, or $1.44, at $75 per share.

Recent issues dominated Monday morning trading, the source said.

The Ardagh Packaging Finance plc/Ardagh Holdings USA Inc. 5¼% senior secured notes due April 2025 (B1/BB/BB+) were par ¾ bid, 101 offered.

The $500 million issue priced at par in a Friday drive-by.

As humanity continued its global battle with the Covid-19 virus, the pandemic's continuing impact on certain segments of the junk-bond market was not difficult to spot, the trader said.

With college and professional sports shut down by the coronavirus, the distressed bonds of Diamond Sports Group, LLC plummeted further, as the new week got underway.

The Diamond Sports Group/Diamond Sports Finance Co. 6 5/8% notes due August 2027 were down 5 to 6 points at 50 bid, the trader said.

Diamond Sports, an indirect subsidiary of Sinclair Broadcast Group, Inc. and Walt Disney Co., acquired equity interests in 21 regional sports networks and Fox College Sports last August, in a transaction valued at $10.6 billion.

Meanwhile the new issue market was open as the April 6 week got underway.

LifePoint Health, Inc. disclosed plans to price a $500 million offering of five-year senior secured notes (expected ratings B1/B) in a Monday drive-by.

$390 million Friday inflows

The dedicated high-yield bond funds had $390 million of net inflows on Friday, according to a market source.

Actively managed high-yield funds had $675 million of inflows on the day.

However high-yield ETFs were negative on Friday, posting $285 million of outflows, the source said.

The combined funds are tracking $383 million of net inflows for the week that will conclude with Wednesday's close, according to the market source.

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