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TerraForm Global Was the Highest Junk Bond Issuer Last Week

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Pricing trends

Junk bond issuance activity was subdued in the week ended July 31 as issuers remained wary of the volatility in the commodities markets and the fall in Chinese equities. Most of the four issues were rated B.

Exchange-traded funds 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

TerraForm Global (GLBL), a subsidiary of SunEdison (SUNE), is a renewable energy company that started trading on NASDAQ on July 31, 2015. It issued $810 million in junk bonds last week. The bonds were rated B2/B+ and carried a coupon of 9.75%. The bonds, which will mature on August 15, 2022, were issued at 98.75% of their par value with a yield to worst of 10.0%. TerraForm Global intends to use the proceeds of the sale for corporate purposes.

In the previous week, Japan’s SoftBank Group (SFTBY) was the biggest issuer of junk bonds with an issuance of $2.0 billion.

Issuance by Cable & Wireless

The UK’s Cable & Wireless Communications Plc (CWIXF) provides telecom services. It raised $750 million of junk bonds last week. The bonds were rated Ba3/B and carried a coupon of 6.875%. The bonds, which will mature on August 1, 2022, were issued at 98.64% of their par value with a yield to worst of 7.125%. Cable & Wireless intends to use the proceeds of the sale to refinance older debt.

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Issuance by Alliant Holdings

Alliant Holdings issued $535 million in senior notes last week. The bonds were rated Caa2/CCC+ and carried a coupon of 8.25%. The junk bonds, which will mature on August 1, 2023, were issued at 100% of their par value with a yield to worst of 8.25%. Alliant Holdings will use the proceeds of this sale for its leveraged buyout by Stone Point Capital from KKR & Co. L.P. (KKR).

Issuance by Euramax International

Euramax International manufactures steel, copper, aluminum, and other products. It issued $385 million in senior notes last week. The bonds were rated Caa2/B- and carried a coupon of 12.0%. The junk bonds, which will mature on August 15, 2020, were issued at 100% of the par value with a yield to worst of 12.0%. Euramax International issued these junk bonds intending to use the proceeds to refinance older debt.

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