But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
American Energy-Permian Basin acquisition-related issue largest of the week
The U.S. high-yield bond (HYG) market recorded issuance volumes of $5.13 billion over 14 deals, in the week ending July 18. The Oil & gas sector companies were major issuers, accounting for ~67% of total volumes over eight transactions.
In the largest issue of the week, American Energy (AEGG)-Permian Basin issued $1.6 billion in three tranches, including $350 million in floating rate notes due in five years. AEGG plans to use the proceeds from the transaction to partly finance its acquisition of the Permian Basin assets of Enduring Resources—a privately-held company. This was AEGG’s debut debt offering.
The AEGG issue was one of the two acquisition-related offerings of the week. The other deal involved the hotels and gaming company Viking Cruises’ $275 million senior add-on notes issue.
Other energy sector issues
Other oil and gas firms getting funding from the primary market included Memorial Production Partners at $500 million, Triangle USA Petroleum Corp. at $450 million, Rex Energy at $325 million, and Bonanza Creek Energy at $300 million. All four offerings were senior unsecured notes issued primarily for the purpose of refinancing.
Triangle Petroleum Corp. (TPLM), Rex Energy, and Bonanza Creek Energy are part of the iShares U.S. Oil & Gas Exploration & Production ETF and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
There was only one leveraged buyout (or LBO)-related deal to hit the market last week. McGraw-Hill Education issued $400 million in five-year senior Payment-In-Kind-toggle notes. The company plans to use the funds to finance its dividend payment to Apollo Global Management.
In the following section, we’ll discuss major trends in the secondary market for high-yield debt (JNK) securities. Please continue reading the next section in this series.
© 2013 Market Realist, Inc.