Aecom Technology megadeal leads $2 billion primary session; split-rated Alcoa prices, firms

By Paul Deckelman and Paul A. Harris

New York, Sept. 17 – The high-yield primary sphere picked up its pace on Wednesday as some $2.02 billion of new dollar-denominated, fully junk-rated paper came to market – $1.6 billion of it from Aecom Technology Corp.

That megadeal, consisting of equal $800 million tranches of eight-year and 10-year notes, priced too late in the session for any kind of immediate aftermarket activity, traders said.

The day also saw York Risk Services price $270 million of eight-year paper.

And JAC Products Inc. did an upsized $150 million of five-year secured notes.

Besides the purely junk issues that priced, Alcoa, Inc. priced a $1.25 billion split-rated (Ba1/BBB-/BB+) offering of 10-year notes, which saw some aftermarket dealings in the junk market, even though the transaction had priced off investment-grade desks. Those bonds were heard to have firmed when they began trading.

Tuesday’s offering of 10.5-year notes from CBS Outdoor Americas Inc. was seen as fairly busy, at modestly firmer levels.

Traders said a better tone was seen overall in the secondary market, although non-new-deal activity was muted, especially against the backdrop of the Federal Reserve’s announcement to the effect that the central bank will keep interest rates around their current lower levels for “a considerable” amount of time.

Statistical indicators of junk market performance were higher across the board on Wednesday, the first time that’s been seen in Junkbondland in more than three weeks.

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