Junk bond issuance activity picked up in the week ended November 6 on improved secondary market sentiment. The number of issues rose to 14 last week. ETFs like the SPDR Barclays High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) invest in junk bonds.
Deal highlight of the week
First Data Corporation (FDC) aims to make payment transactions secure and easy for financial institutions, merchants, and their customers. It issued dollar-denominated junk bonds worth $3.2 billion last week. The two-tranche issue consisted of:
- $1.0 billion in 5.00% senior secured first-lien notes due on January 15, 2024. The notes were rated B1/BB.
- $2.2 billion in 5.75% senior secured second-lien notes due on January 15, 2024. The notes were rated Caa1/B.
First Data intends to use the proceeds for refinancing purpose.
CCOH Safari—a subsidiary of Charter Communications (CHTR)—issued junk bonds worth $2.5 billion last week. The senior notes were rated B1/BB and carried a coupon of 5.75%. The bonds will mature on February 15, 2026.
Charter intends to use the net proceeds from the sale of the notes to partially finance Charter’s previously announced transactions with Time Warner (TWC) and Bright House Networks.
T-Mobile (TMUS) provides cell phone communication services in the United States. It issued junk bonds worth $2.0 billion last week. The senior notes were rated Ba3/BB and carried a coupon of 6.5%. The bonds will mature on January 15, 2026. T-Mobile intends to use the net proceeds for general corporate purposes.
Goodyear Tire & Rubber (GT) is one of the world’s largest tire companies. It issued junk bonds worth $1.0 billion last week. The senior notes were rated Ba3/BB and carried a coupon of around 5.13%. The bonds will mature on November 15, 2023. The company intends to use the proceeds for refinancing purposes.