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Junk Bond Issuance Rose Due to Better Market Tone Last Week

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Part 2
Junk Bond Issuance Rose Due to Better Market Tone Last Week PART 2 OF 6

High-Yield Bond Issuance Rose Due to Improved Market Tone

Deals and flows analysis in high-yield bond markets

The market’s tone improved and welcomed quality issuers, leading to a rise in high-yield bond issuance in the week ended November 20. High-yield debt is tracked by the SPDR Barclays High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG). According to data from S&P Capital IQ’s LCD, a dollar-denominated high-yield debt amounting to $5.5 billion was issued in the week ended November 20. In the previous week, high-yield issuance stood at $3.58 billion. The number of transactions rose to ten last week from seven in the previous week.

High-Yield Bond Issuance Rose Due to Improved Market Tone

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Last week brought the total US dollar-denominated issuance of high-yield debt to $258.1 billion in 2015 year-to-date (or YTD). This is lower by 16.5% compared to the corresponding period in 2014.

Majority of deals for refinancing

Out of the ten deals priced last week, five were for refinancing purposes, three for corporate purposes, and two for acquisitions.

Equinix (EQIX) issued junk bonds worth $1.1 billion for acquisition purpose. This was the largest issuance last week. Sally Beauty—subsidiary of Sally Beauty Holdings (SBH)—and Ally Financial (ALLY) each issued junk bonds worth $750 million last week for refinancing purposes. LifePoint Health (LPNT) issued junk bonds worth $500 million last week for corporate purposes.

We’ll analyze these deals and pricing trends in detail in the next article.

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