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AmeriGas Partners Was the Only Issuer of Junk Bonds Last Week

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Pricing trends

Issuance in the high-yield primary market took a dive last week due to uncertainty associated with the United Kingdom’s referendum to leave the EU (European Union). Given the stunning decision to leave the EU, which created shocks across global markets, issuance is expected to be light ahead of the long weekend for July 4th.

Funds like the PIMCO High Yield Fund Class A (PHDAX) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) invest in junk bonds.

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AmeriGas Partners, the only issuer last week

AmeriGas Partners (APU) is a publicly traded MLP. It issued Ba3- rated junk bonds worth $1.35 billion on June 20. The two-tranche issue consisted of the following:

  • $675 million in 5.88% senior notes will be due on August 20, 2026. The notes were issued at 100% of the aggregate principal amount at a YTW (yield to worst) of 5.88%.
  • $675 million in 5.63% senior notes will be due on May 20, 2024. The notes were issued at 100% of the aggregate principal amount at a YTW of 5.63%.

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

In the next article in this series, we’ll look at high-yield bond fund flows and yield movement of bond funds.

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