Morning Commentary: Junk outperforms equities early Monday; drive-through window reopens

By Paul A. Harris

Portland, Ore., May 8 – The high-yield bond market was outperforming equities in the early going on Monday, according to a bond trader, who was marking junk 1/8 of a point better at mid-morning.

The primary market drive-by window reopened with a pair of familiar high-yield issuers parading deals expected to price before the session’s close.

Ball Corp. plans to price $1 billion of six-year senior notes (Ba1/BB+). Initial talk tightened to the high-5% area from the 6¼% area in the early going on Monday, a bond trader said.

And Northern Oil and Gas, Inc. plans to price a $450 million offering of eight-year senior notes, in the market with initial yield talk in the low-to-mid 9% area.

Among recently priced issues, the Heartland Dental, LLC/Heartland Dental Finance Corp. 10½% senior secured notes due April 2028 (B2/B) changed hands on Monday morning at par 1/8, according to the trader.

The $535 million deal priced at par on Friday and went out at par bid, par 3/8 offered, market sources said.

The Copeland (Emerald Debt Merger Sub LLC/Emerald Co-Issuer Inc.) 6 5/8% senior secured notes due December 2030 (Ba3/BB-/BB-) were 99 bid, 99½ offered on Monday morning, the trader said.

They were 99½ bid, par offered on Friday.

The bonds came Thursday at par in a $2.275 billion tranche (upsized from $2.25 billion).

Fund flows

High-yield ETFs saw big daily cash inflows of $781 million on Friday, according to a market source.

Actively managed high-yield funds were negative on the day, sustaining $191 million of outflows on Friday, the source said.

© 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.