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EchoStar Issued the Most Junk Bonds during the Week to July 22

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Pricing trends

High-yield bond issuers came back to the primary market last week after being mostly dormant in the previous two weeks. Issuers hesitated to launch new issues due to the uncertainty created by the Brexit vote.

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

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Issuance by EchoStar

EchoStar (SATS) is a global provider of satellite and video delivery solutions. It issued junk bonds worth $1.5 billion on July 20. The two-tranche issue consisted of:

  • $750 million Ba3/BB- rated 6.6% senior notes due on August 1, 2026. The notes were issued at 100% of the aggregate principal amount at a yield to worst of 6.6%.
  • $750 million Ba2/BBB- rated 5.3% senior secured notes due on August 1, 2026. The notes were issued at 100% of the aggregate principal amount at a yield to worst of 5.3%.

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

Issuance by NRG Energy

NRG Energy (NRG) is an integrated power company in the US. It issued junk bonds worth $1.25 billion on July 19. The senior notes were rated B1/BB- and carried a coupon of 6.6%. The bonds will mature on January 15, 2027. They were issued at 100% of the aggregate principal amount at a yield to worst of 6.6%.

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

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Issuance by Revlon Inc

Revlon (REV) is a global color cosmetics, hair color, beauty tools, fragrances, skincare, antiperspirant, and beauty care products company. It issued junk bonds worth $450 million on July 21. The senior notes were rated B3/B+ and carried a coupon of 6.3%. The bonds will mature on August 1, 2024. They were issued at 100% of the aggregate principal amount at a yield to worst of 6.3%.

The proceeds from the offering will be used for the acquisition of Elizabeth Arden (RDEN).

Issuance by Warner Music Group

Warner Music Group is a music company with interests in recorded music, music publishing, and artist services. It issued junk bonds worth $300 million on July 21. The senior secured notes were rated Ba3/B and carried a coupon of 5.0%. The bonds will mature on August 1, 2023. They were issued at 100% of the aggregate principal amount at a yield to worst of 5.0%.

The company intends to use the net proceeds from the offering for refinancing purposes.

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

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