Yahoo Finance High-Yield Bond Issuance Rose despite Volatile Oil Prices
Why Did Junk Bond Issuance Gain Traction amid Declining Oil?
Deals and flows analysis in high-yield bond markets
High-yield bond issuance gained traction last week. Five deals were priced. High-yield debt is tracked by mutual funds like the Prudential Short Duration High Yield Income Fund – Class A (HYSAX) and the TIAA-CREF High-Yield Fund – Retail Class (TIYRX). HYSAX and TIYRX’s weekly returns rose by 0.6% and 0.9%, respectively.
According to data from S&P Capital IQ/LCD, dollar-denominated high-yield debt amounting to $3.52 billion was issued in the week ending February 5. In the previous week, the high-yield issuance was at $3.4 billion. The number of transactions rose to five last week from four the previous week.
Purpose of the deals
Five deals were priced last week. Two for acquisition purposes, two for refinancing purposes, and one for a spin-off.
Charter Communications (CHTR) issued dollar-denominated junk bonds worth $1.7 billion for refinancing purposes. This was the largest deal last week. Vizient Manufacturing Solutions issued dollar-denominated junk bonds worth $600 million. Acadia Healthcare (ACHC) issued an add-on Term Loan B worth $955 million for acquisition purposes. Manitowoc Foodservice is a division of The Manitowoc Company (MTW). It issued dollar-denominated junk bonds worth $425 million for its spin-off from the parent company. We’ll discuss the details of these issues in Part 3 of this series.
In the previous week, Centene (CNC) and GFL Environmental issued junk bonds for acquisition purposes. Lamar Media is a wholly-owned subsidiary of Lamar Advertising (LAMR). It issued junk bonds for refinancing purposes. HUB International issued junk bonds for general corporate purposes.
In the next part of this series, we’ll analyze the deals that were priced last week. We’ll also look at pricing trends.
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