Morning Commentary: Junk primary quiet; secondary gains continue; oil patch on the rise

By Abigail W. Adams

Portland, Me., Nov. 4 – The domestic high-yield primary market remained dormant on Wednesday despite the strong tone to the market.

With control of the White House and Congress still up in the air, potential issuers were on the sideline, a source said.

“No results are keeping guys at bay,” a source said. “I’m sure there are a lot of pent up deals ready to be unleashed, but they’re waiting to get rid of the uncertainty.”

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

It’s been radio silence on the deal since last week, and several sources expect the offering to be pulled.

However, there’s been no official announcement about the offering being withdrawn.

If the market tone remains strong, there is still the potential for the deal to get done, a source said.

While the primary market remained on the sidelines, the secondary space continued its rally with the market opening up another ¼ point, a source said.

There were several offers-wanted-in-competition lists circulating with the overall market better bid, a source said.

The oil patch remained on the rise with WTI crude oil futures continuing to rally.

Occidental Petroleum Corp.’s senior notes remained on the rise with the capital structure up another 2 points to 3 points.

The 8 7/8% senior notes due 2030 continued to recover from last week’s sell-off with the notes jumping to a 103-handle in early trading.

The notes closed the previous session at par 5/8.

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