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AerCap Ireland Capital: Best Deal for the Week Ending October 16

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Pricing trends

For the week ending October 16, the junk bond issuance activity was subdued. Issuers remained wary of the volatility in the commodities markets and subdued market sentiment. There was only one issue that was rated BB.

Mutual funds like the PIMCO High Yield Fund – Class A (PHDAX) and the Fidelity High Income Fund (SPHIX) invest in junk bonds.

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Highlight of the week

AerCap Ireland Capital Limited (Ireland)/AerCap Global Aviation Trust (Delaware) are wholly owned subsidiaries of AerCap Holdings NV (AER). AerCap is based in the Netherlands. It’s the global leader in aircraft leasing and aviation finance.

AerCap Ireland Capital Limited (Ireland)/AerCap Global Aviation Trust (Delaware) issued junk bonds worth $1 billion last week. The senior notes had a rating of Ba2/BB+. They carried a coupon of 4.6%. The bonds will mature on October 30, 2020. The company will use the proceeds for general corporate purposes.

In the previous week, there was only one high-yield issue. Scotts Miracle-Gro (SMG) issued high-yield bonds worth $400 million last week for refinancing.

However, in September, Frontier Communications (FTR) issued junk bonds rated Ba3/BB- worth $6.6 billion on September 11. This was the fifth-largest issue ever. Frontier raised these bonds to acquire Verizon’s (VZ) wireline properties in California, Florida, and Texas.

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