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Air Canada leads $2.1 billion day; secondary dips; Novelis in focus
By Paul A. Harris and Abigail W. Adams
Portland, Me., July 27 – In the face of considerable selling in the stock market, high-yield bonds held in on Tuesday, according to a bond trader who was marking junk unchanged to perhaps 1/8 of a point lower, early in the afternoon.
The market should have no problem clearing the large calendar that materialized on Monday, the trader said, adding that high-yield investors seem to have decent cash balances and deals tend to be oversubscribed.
Air Canada priced an upsized $1.2 billion five-year senior bullet (Ba2/BB-/BB) at par to yield 3 7/8%, 12.5 basis points tighter than the 4% to 4¼% talk. The tranche was upsized from $1 billion.
The Montreal-based carrier also priced an upsized C$2 billion tranche of eight-year senior notes at par to yield 4 5/8%, on top of talk. The Canadian dollar-denominated tranche was increased from C$1.5 billion.
Still, the secondary space was weak on Tuesday as the market eyed Wednesday’s press conference following the Federal Reserve Open Market Committee Meeting.
While the market was down 1/8 point, volume remained light with liquidity outside of new issues sparse.
Novelis Corp.’s two tranches of senior notes (B1/BB) were in focus with the notes coming in slightly from the heights reached after breaking for trade.
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