Deals and flows analysis in high yield bond markets
High yield bond issuance activity gained traction last week on improved Market sentiment. According to data from S&P Capital IQ/LCD, dollar-denominated high yield debt amounting to $6.9 billion was issued in the week ended May 13, 2016. It was the fourth-largest YTD (year-to-date). In the previous week, high yield issuance stood at $3.8 billion. The number of transactions increased to 11 last week from five the previous week.
Last week brought the total US dollar-denominated issuance of high yield debt to $60.8 billion in 2016 YTD. This is lower by 46.0% compared to the corresponding period of 2015.
Mutual funds such as the PIMCO High Yield Fund – Class A (PHDAX) and the Fidelity High Income Fund (SPHIX) invest in junk bonds. High yield debt is tracked by exchange-traded funds such as the SPDR Barclays Capital High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond Fund (HYG).
Purpose of the deals
The following 11 deals priced last week issued junk bonds for refinancing purposes:
- Cheniere Corpus Christi Holdings, a wholly owned subsidiary of Cheniere Energy (LNG)
- NRG Energy (NRG)
- The Goodyear Tire & Rubber Company (GT)
- Tesoro Logistics (TLLP), a subsidiary of Tesoro (TSO)
- Griffon (GFF)
- Performance Food Group (PFGC)
- Ryerson Holding (RYI)
- LifePoint Health (LPNT)
- AES (AES)
- Penske Automotive Group (PAG)
- Teleflex (TFX)
In the next part of this series, we’ll look at the deals priced last week and pricing trends in detail.