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Post Holdings Issued the Most Junk Bonds in the Week to July 29

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Pricing trends

High-yield bond issuers rose last week, but most of the issuance was front loaded ahead of the FOMC (Federal Open Market Committee) meeting. 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 Post Holdings

Post Holdings (POST) is a consumer packaged food company. It issued junk bonds worth $1.75 billion on July 25. The senior notes were rated B3/B and carried a coupon of 5.0%. The bonds will mature on August 15, 2026. They were issued at 100% of the aggregate principal amount at a yield-to-worst of 5.0%.

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

Issuance by PulteGroup

PulteGroup (PHM) is a homebuilding company. It issued Ba1/BB+ rated junk bonds worth $1.0 billion on July 26. The two-tranche issue consisted of:

  • $400 million 4.3% senior add-on notes due on March 1, 2021. The notes were issued at 103.5% of the aggregate principal amount at a yield-to-worst of 3.4%.
  • $600 million 5.0% senior secured notes due on January 15, 2027. The notes were issued at 100% of the aggregate principal amount at a yield-to-worst of 5.0%.

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

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Issuance by Navient

Navient (NAVI) is a loan management, servicing, and asset recovery company. It issued junk bonds worth $750 million on July 26. The senior notes were rated Ba3/BB- and carried a coupon of 6.6%. The bonds will mature on July 26, 2021. They were issued at 100% of the aggregate principal amount at a yield-to-worst of 6.6%.

The proceeds from the offering will be used for general corporate purposes.

Issuance by NXP Semiconductors N.V.

NXP Semiconductors N.V. (NXPI) creates solutions that enable secure connections for a smarter world. It issued junk bonds worth $500 million on July 28. The senior add-on notes were rated Ba2/BB+ and carried a coupon of 4.1%. The bonds will mature on June 1, 2021. They were issued at 101.9% of the aggregate principal amount at a yield-to-worst of 3.7%.

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

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

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