Junk primary ends $7 billion week on a quiet note; energy credits again slide as oil drops

By Paul Deckelman and Paul A. Harris

New York, Aug. 7 – The high yield primary sphere closed out the first full trading week in August – and its busiest week in two months – on a quiet note on Friday.

No new deals were heard to have come to market during the session, or even were announced – in fact, syndicate sources heard one deal that had been on the forward calendar for a while was dropped, as Georgia Renewable Power, Inc. withdrew its planned $225 million offering of seven-year secured notes, preferring instead to enter into a bank loan.

With no new pricings during the session, issuance for the week stood where it had finished on Thursday, at $7.42 billion of new U.S. dollar-denominated, fully junk-rated paper from domestic or industrialized-country borrowers in 11 tranches.

Traders saw continued brisk activity in recently priced new issues, such as Thursday’s deals from Vista Outdoor, Inc. and Mohegan Tribal Gaming Authority, and Wednesday’s offerings from issuers such as First Data Corp. and Party City Holdings, Inc.

Away from the new deals, traders saw the overall market tone heavier on the day, with junk again taking its cues from stumbling equities and tumbling oil prices.

The latter particularly hurt names such as California Resources Corp., SandRidge Energy, Inc. and Chesapeake Energy Corp.

Statistical measures of junk market performance were lower across the board for a second consecutive session on Friday; they had turned lower on Thursday, after having been mixed for two straight sessions before that.

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