Morning Commentary: Junk opens flat; Jones DesLauriers/Navacord eyes $75 million add-on

By Paul A. Harris

Portland, Ore., June 1 – The high-yield bond market opened unchanged on Thursday, sources said.

With the S&P 500 stock index up 0.42% at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was up 0.31%, or 23 cents, at $73.99.

The Solenis (Olympus Water US Holding Corp.) 9¾% senior secured notes due November 2028 (B3/B-) were 99 3/8 bid, 99½ offered, unchanged on the morning, the trader said.

The $1.7 billion tranche priced at par on May 24.

The freshly minted Mobius Merger Sub, Inc./MoneyGram International Inc. 9% senior secured notes due June 2030 (B2/B/B+) changed hands on Thursday morning at 84¼, up 1¼ points from their Wednesday issue price.

The upsized $500 million deal (from $450 million) priced at 83 to yield 12.742%.

Away from recent issues, the bonds of Occidental Petroleum Corp. saw price improvements as trades in that paper are now being executed on investment-grade desks, according to the trader.

The Occidental Petroleum 6.45% notes due 2036 were up nearly a point on the morning at 102½, the source said.

Elsewhere, the NGL Energy Operating LLC/NGL Finance Corp. (NGL Energy Partners) 7½% senior secured notes due February 2026 were up nearly ½ point at 97 trailing the company’s announcement that it has undertaken a vigorous bond repurchasing program.

In the new issue market, Jones DesLauriers Insurance Management Inc., a broker partner of Navacord Inc., expects to price a $75 million fungible add-on to its 8½% senior secured notes due March 15, 2030 (B2/B-/B+) in a Wednesday drive-by.

Initial price talk is in the 98 area.

Fund flows

The dedicated high-yield bond funds saw $364 million of net daily cash inflows on Wednesday, according to a market source.

High-yield ETFs saw $334 million of inflows on the day.

Actively managed high-yield bond funds saw $30 million of inflows on Wednesday, the source said.

As the market awaits an expected Thursday afternoon report on the weekly cash flows of the various asset classes from Refintiv Lipper, the combined high-yield bond funds are tracking $882 million of net outflows on the week that concluded with Wednesday’s close, according to the market source.

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