Junk secondary bounces on bank bailouts; First Republic surges; Lumen gains on exchange

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 16 – The high-yield primary market remained dormant on Thursday, a fortnight after the most recent dollar-denominated deal was priced.

The active forward calendar was empty at the session's close.

However, recent market volatility that came in the wake of last week's spectacular collapse of Silicon Valley Bank did not by any means bring mergers and acquisitions activity to a standstill, a trader said on Thursday, citing reports that Motive Partners is attempting to secure financing to buy payments-software provider ACI Worldwide, Inc.

Meanwhile, the secondary space bounced back from a low open that followed Wednesday’s heavy session with the market nearly eliminating its losses from the previous session.

The market remained heavy early in Thursday’s session as the market weighed the Swiss National Bank’s $54 billion injection into Credit Suisse with the European Central Bank’s 50 bps rate increase and headlines that First Republic Bank was exploring a sale.

However, breaking midsession news that the big banks were working on a rescue package for First Republic brought buyers back to the space.

“At some point, ETFs started circulating OWICs,” a source said.

High-yield mutual funds and ETFs saw outflows resume with $1.43 billion leaving the space in the week through Wednesday’s close, according to the Refinitiv Lipper Fund Flow report.

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