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Endo International: Biggest Junk Bond Issuer in Week of June 26

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Pricing trends

Although the quantum of issuance rose in the week ending June 26, it was still lower than earlier in 2015, as yields have run up quite a bit. Most junk bond issuers were Caa/B rated.

ETFs like the SPDR Barclays High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) invest in junk bonds.

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Deal highlight of the week

Endo Pharmaceuticals is a subsidiary of Endo International Plc (ENDP), a specialty pharmaceutical company based in Ireland. It issued senior notes worth $1.635 billion last week. The bonds were rated B1/B and carried a coupon of 6.0%.

The bonds, which will mature on July 15, 2023, were issued at 100% of the par value with a yield to worst of 6.0%. Endo will use the proceeds of the sale to fund the acquisition of Par Pharmaceutical Holdings.

Issuance by AerCap

AerCap Holdings N.V. (AER) is an aircraft leasing company. It issued Ba2/BB+ rated junk bonds worth $1.0 billion via the following two tranches:

  • $500 million in 4.25% senior notes due on July 1, 2020. The notes were issued at 100% of the aggregate principal amount at a yield to worst of 4.25%.
  • $500 million in 4.625% senior notes due on July 1, 2022. The notes were issued at 100% of the aggregate principal amount at a yield to worst of 4.625%.

AerCap will use funds raised from this sale for corporate purposes.

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Issuances by Ball Corp. and CNH Industrial Capital

Ball Corporation (BLL) is a supplier of metal packaging products to food and beverage, household products, and other industries. It issued Ba1/BB+ rated senior notes worth $1.0 billion last week. The single-tranche issue had its coupon set at 5.25%. The notes, which will mature on July 1, 2025, were issued at 100% of their par value with a yield to worst of 5.25%. Ball Corp. will use the proceeds of the sale for corporate purposes.

CNH Industrial N.V. (CNHI), a designer and marketer of construction equipment, trucks, buses, and other vehicles and equipment, noted that CNH Industrial Capital LLC issued Ba1/BB rated junk bonds worth $600 million. The single-tranche issue of senior notes carried a coupon of 3.875%. The notes will mature on July 16, 2018. The notes were issued at 99.64% of their par value, at a yield to worst of 4.0%. CNH will use these proceeds for corporate purposes.

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