Junk bonds fall on hawkish Fed; Vericast gains on acquisition buzz; Open Text under pressure

By Paul A. Harris and Abigail W. Adams

Portland, Me., Aug. 26 – The second-to-last pre-Labor Day Friday in the 2022 junk bond market saw the new issue bourse remain idle, as expected.

Selling pressure returned in full force to the secondary space after Powell’s hawkish Jackson Hole speech.

Rate risk and recession fear drove the cash bond market down 1 to 1½ points following the speech.

While the secondary space saw its second consecutive weekly loss on Friday, trading volume was extremely thin during Friday’s session, a source said.

Large, liquid issues and topical news were the drivers of the little trading activity that did occur.

While the broader market was under pressure, Vericast Corp.’s 11% first-lien notes due 2026 (Caa1/B-) made large gains as buzz swept through the market about a potential acquisition of the marketing company.

However, news of Open Text Corp.’s $6 billion acquisition of Micro Focus drove its 4 1/8% senior notes due 2031 (Ba2/BB) down more than 4 points.

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