Morning Commentary: High-yield primary market quiet, secondary firm in thin volume

By Abigail W. Adams

Portland, Me., Oct. 25 – The domestic high-yield bond primary market remained dormant on Tuesday with the forecast for new deal activity low.

While there were signs of life in the high-grade market and plenty of cash on the sidelines to put to work on new issuance, the cost of financing is out of reach for low-quality credits that have largely been priced out of the market, a source said.

With no new paper to put to work, trading activity remained thin on Tuesday although the market continued to firm as Treasuries and equities rallied early in the session.

While flat at the open, the cash bond market rallied ¼ point as the session got underway with ETF buying lifting the space, sources said.

Carnival Corp.'s 10 3/8% senior priority notes due 2028 (B2/B+), the most recent issue to clear the market, continued to rise in heavy volume.

The 10 3/8% notes were up ¼ point alongside the broader market with the notes wrapped around par.

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