Greece Referendum Results in a Dull Week for High-Yield Bonds



Deals and flows analysis in the high-yield bond markets

The issuance volume for high-yield debt for the week ending July 2, 2015, fell from the previous week. Companies remained on the sidelines ahead of the July 4 holiday weekend. They also wanted to assess the results of Greece’s referendum. 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/LCD, dollar-denominated high-yield debt amounting to $1.085 billion was issued in the week ending July 2. The issuance volume fell 80.5% from the week ending June 26. The number of transactions fell to two from ten in the previous week.

Last week brought the total US dollar-denominated issuance of high-yield debt to $186.2 billion in 2015 YTD (year-to-date). This is nearly flat from the same period in 2014.

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Refinancing deals take a step back

Since mid-February 2015, refinancing has been the purpose of choice for high-yield debt issuers, with the exception of a few weeks. Last week, was an exception. Of the two deals that were priced last week, one was for an acquisition while the other was for a leveraged buyout.

The deal for the acquisition was the largest in terms of volume. Software and related-services provider SS&C Technologies Holdings (SSNC) issued high-yield bonds worth $600 million last week—the largest of the period. The company raised these bonds to finance its acquisition of Advent Software (ADVS). In the previous week, specialty healthcare company Endo Pharmaceuticals—a subsidiary of Endo International (ENDP)—was the highest issuer of high-yield bonds. It was worth $1.635 billion.

Last week, the only other issuer was StandardAero. It issued high-yield bonds worth $485 million.

We’ll analyze these deals and pricing trends in the next part of this series.


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