Deals and flows analysis in the high-yield bond market
High-yield bond issuance activity was strong last week. It recorded the second-highest YTD (year-to-date) volume. According to data from S&P Capital IQ/LCD, dollar-denominated high-yield debt amounting to $10.1 billion was issued in the week ending April 22. In the previous week, the high-yield issuance was $4.6 billion. The number of transactions fell to six last week from seven in the previous week.
Last week brought the total US dollar-denominated issuance of high-yield debt to $62.7 billion in 2016 YTD. This is 49.4% lower than the same period in 2015.
High-yield debt is tracked by mutual funds like the Prudential Short Duration High Yield Income Fund – Class A (HYSAX) and the TIAA-CREF High-Yield Fund – Retail Class (TIYRX). It’s also tracked by ETFs like the SPDR Barclays Capital High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond Fund (HYG).
Purpose of the deals
Six deals were priced last week. Three for refinancing, two for leveraged buyout, and one for acquisition.
Altice Financing SA—a subsidiary of Altice SA, Altice US Finance I Corporation, and NBTY (NTY) issued junk bonds for refinancing purposes.
Prime Security Services—a subsidiary of Apollo Global Management (APO)—and The Fresh Market (TFM) issued junk bonds for leveraged buyout purposes. Meanwhile, RegionalCare Capella Healthcare issued junk bonds for acquisition purposes.
In the next part, we’ll analyze the deals priced last week and pricing trends.