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Gaming and Leisure Properties Issued the Most Junk Bonds

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Pricing trends

The high-yield market saw lower activity in the primary market last week—compared to the previous week. The deal flow in the primary market was down. Eight deals were priced in the previous week. Seven deals were priced last week.

Mutual funds like the PIMCO High Yield Fund – Class A (PHDAX) and the Fidelity High Income Fund (SPHIX) invest in junk bonds. Meanwhile, ETFs like the SPDR Barclays Capital High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond Fund (HYG) also invest in junk bonds.

Issuance by Gaming and Leisure Properties

Gaming and Leisure Properties (GLPI) is a self-administered and self-managed REIT. It issued junk bonds worth $1.38 billion on April 11. The Ba1/BB+ rated two tranche issue consisted of:

  • $400 million in 4.4% senior notes due on April 15, 2021. The notes were issued at 100% of the aggregate principal amount at a yield-to-worst of 4.4%.
  • $975 million in 5.4% senior notes due on April 15, 2026. The notes were issued at 100% of the aggregate principal amount at a yield-to-worst of 5.4%.

The company intends to use the proceeds of the loan for refinancing purposes.

Micron Technology’s issuance

Micron Technology (MU) offers semiconductor technology. It issued dollar-denominated junk bonds worth $1.25 billion on April 14. The senior secured notes were rated Baa2/BBB- and carried a coupon of 7.5%. The bonds will mature on September 15, 2023. They were issued at 100% of the aggregate principal amount at a yield-to-worst of 7.5%. The company intends to use the proceeds of the loan for corporate purposes.

Virgin Media’s issuance

Virgin Media provides broadband, cable TV, landline phone, and mobile services in the United Kingdom. It issued junk bonds worth $750 million on April 12. The senior secured notes were rated Ba3/BB- and carried a coupon of 5.5%. The bonds will mature on August 15, 2026. They were issued at 100% of the aggregate principal amount at a yield-to-worst of 5.5%. The company intends to use the proceeds of the loan for refinancing purposes.

Pinnacle Entertainment’s issuance

Pinnacle Entertainment (PNK) owns and operates gaming entertainment businesses. It issued junk bonds worth $375 million on April 12. The senior notes were rated B2/BB- and carried a coupon of 5.6%. The bonds will mature on May 1, 2024. They were issued at 100% of the aggregate principal amount at a yield-to-worst of 5.6%. Pinnacle will spin off its operating business and the real property of Belterra Park Gaming & Entertainment Center into a publicly traded company.

In the next part, we’ll look at high-yield bond fund flows and bond funds’ yield movement.

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