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Concordia Healthcare: Last Week’s Highest Junk Bond Issuer

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Nov. 20 2020, Updated 2:25 p.m. ET

Pricing trends

Junk bond issuance activity rose in the week ended October 23 on an improved market tone. There were five issues last week, compared with just one issue in the previous two weeks. Mutual funds such as PIMCO High Yield Fund – Class A (PHDAX) and Fidelity High Income Fund (SPHIX) invest in junk bonds.

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Deal highlight of the week

Concordia Healthcare Corporation (CXRX), a healthcare company focused on legacy pharmaceutical products and orphan drugs, issued junk bonds worth $790 million last week. The senior notes were rated Caa2/CCC+ and carried a coupon of 9.5%. The bonds will mature on October 21, 2022. The company will use the proceeds for the acquisition of Amdipharm Mercury.

Greatbatch (GB) designs and manufactures technologies that enhance the reliability and performance of medical devices and procedures. It issued junk bonds worth $360 million last week. The senior notes were rated Caa1/B- and carried a coupon of 9.1%. The bonds will mature on November 1, 2023. The company will use the proceeds for the acquisition of Lake Region Medical.

Jarden Corporation (JAH), headquartered in Florida, is a consumer products company with a diverse portfolio of products. It issued junk bonds worth $300 million last week. The senior notes were rated Ba3/BB and carried a coupon of 5.0%. The bonds will mature on November 15, 2023. The company will use the proceeds for the acquisition of Jostens’ holding company, Visant Holding Corporation.

NN, Inc. (NNBR) is a diversified industrial company. It issued junk bonds worth $300 million last week. The senior notes were rated Caa1/B and carried a coupon of 10.3%. The bonds will mature on November 1, 2020. The company will use the proceeds for the acquisition of Precision Engineered Products Holdings.

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Asbury Automotive Group (ABG), headquartered in Duluth, Georgia, is one of the largest automotive retailers in the United States. It issued junk bonds worth $200 million last week. The senior subordinated add-on notes were rated B1/BB and carried a coupon of 6.0%. The bonds will mature on December 15, 2024. The company will use the proceeds for corporate purposes.

In the previous week, there was only one high yield issue. AerCap Ireland Capital and AerCap Global Aviation Trust, wholly owned subsidiaries of AerCap Holdings (AER), issued junk bonds worth $1 billion.

In the month of September 2015, Frontier Communications Corporation (FTR) issued junk bonds rated Ba3/BB- and worth $6.6 billion on September 11. This was the fifth largest issue ever. Frontier Communications raised these bonds to acquire Verizon Communications’ (VZ) wireline properties in California, Florida, and Texas.

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