Morning Commentary: New Cox Media bonds rise sharply; oil names rally; funds see inflows

By Paul A. Harris

Portland, Ore., Dec. 13 – High-yield bonds opened Friday 1/8 point higher but were slightly off their highs by mid-morning, according to a New York-based bond trader.

High-yield ETF share prices edged into positive territory along with the stock indexes at mid-morning. The iShares iBoxx $ High Yield Corporate Bd (HYG) was up 0.1%, or 9 cents, at $87.61 per share.

Among recent issues, the Terrier Media Buyer, Inc./Cox Media Group 8 7/8% senior notes due December 2027 (Caa1/CCC+) were sharply higher in fairly active Friday trading, at 103¼ bid, 103¾ offered, the trader said.

The downsized $1,015,000,000 issue (from $1,065,000,000) priced at par on Thursday in a deal that ended up modestly oversubscribed after the issuer brought a load of extra rate (early talk was in the low 8% range) and came across with covenant changes, at which point the Cox 2027 paper must have begun to appear cheap, the trader surmised.

Elsewhere, amid a raft of positive (or at least hopeful) financial headlines, there has been modest or better improvement in the oil patch.

The barrel price of West Texas Intermediate crude oil for January 2020 delivery was up 0.73%, or 43 cents, on the morning, trading at $59.61. Along a slightly more extended timeline, oil prices are up 8% so far in December.

Bonds of the oil producers reflect this improvement, the trader said.

The Denbury Resources Inc. 9¼% senior secured second-lien notes due March 2022 were up a whopping 6 points on Friday at 90 bid, the trader said, adding that those bonds were 77½ bid at the beginning of August.

The new issue market was quiet on Friday morning.

Earlier in the week market sources were forecasting that Friday's close would bring about the conclusion of 2019 new issue business.

Later in the week, however, soaring stock prices and an improving outlook on meaningful trade agreements among the United States and some of its trading partners prompted some high-yield market watchers to pronounce that conditions are presently ideal, and opportunistic issuers might easily come with drive-by deals during the Dec. 16 week.

Thursday inflows eyed

The dedicated high-yield bond funds saw $480 million of daily net inflows on Thursday, according to a market source.

High-yield ETFs saw $405 million of inflows on the day.

Actively managed high-yield funds saw $75 million of inflows on Thursday, the source said.

News of Thursday’s daily cash flows trails a Thursday afternoon report that the dedicated junk funds saw $939 million of net inflows in the week to the Wednesday, Dec. 11 close, according to Lipper US Fund Flows.

© 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.