Morning Commentary: Junk primary quiet on election day; secondary firms; Molina gains

By Abigail W. Adams

Portland, Me., Nov. 3 – The domestic high-yield primary market was quiet on Tuesday as U.S. voters lined up at the polls to cast their ballots in a high-stakes presidential election.

While markets were strong leading into the election, potential issuers were in wait-and-see-mode.

The pace of new issuance may pick up if markets respond favorably to the outcome of the election, a source said.

Franchise Group Inc.’s $650 million offering of five-year senior secured notes remains the sole deal on the forward calendar.

However, there have been no official updates on the deal, which was initially slated to price on Friday and then rumored to be pricing on Monday.

“I wouldn’t be surprised if it gets pulled,” a source said.

Meanwhile, the secondary space extended its gains with the cash bond market up another ¼ point following Monday’s rally.

ETFs were posting gains alongside the broader equity market with the iShares iBoxx $ High Yield Corporate Bd (HYG) trading up to $84.13, an increase of 0.49%, and the SPDR Bloomberg Barclays High Yield Bond index (JNK) trading up to 104.72, an increase of 0.59%, shortly before 11 a.m. ET.

Molina Healthcare Inc.’s 3 7/8% senior notes due 2030 (Ba3/BB-) were active early in the session with the notes improving after a lackluster break.

The 3 7/8% notes were changing hands in the par 3/8 to par 7/8 context early in Tuesday’s session.

They were wrapped around par after breaking for trade on Monday.

Molina priced a $650 million issue of the 3 7/8% notes at par in a Monday drive-by.

Initial guidance had the notes coming with a yield in the low to mid-4% area.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.