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Junk bonds rebound; Signature Bank active; FXI up on exchange; Univar jumps on acquisition
By Abigail W. Adams and Paul A. Harris
Portland, Me., March 14 – The junk bond secondary space had a strong rebound on Tuesday with the stabilization of the banking sector and February’s Consumer Price Index report lifting market sentiment.
With banking regulators taking extraordinary measures to backstop all deposits at Silicon Valley Bank and Signature Bank and prevent further contagion in the banking sector and the CPI print largely in line with expectations, the ‘Fed Put’ was in full effect, sources said.
After a nearly 100 basis points blowout in credit spreads since Wednesday, March 8, opportunistic buyers returned to the space to take advantage of some cheapness.
The cash bond market shot up ½ to 1 point during Tuesday’s session.
“Yesterday, people were hiding under their desks,” a source said.
Signature Bank’s senior notes were trading in heavy volume with the once investment-grade notes plummeting to distressed territory after the bank was placed in F.D.I.C. receivership on Sunday.
FXI Holdings Inc.’s 12¼% senior secured notes due 2026 (Caa2/CCC+) made large gains in active trade after the company launched an exchange offer for its 7 7/8% senior notes due Nov. 1, 2024.
Univar Solutions Inc.’s 5 1/8% senior notes due 2027 (B1/BB) made large gains after Apollo announced it would buy the company in a deal with an enterprise value of $8.1 billion.
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