US junk bond market livens with five deal announcements

By David Bell

NEW YORK, Jan 22 (IFR) - The US junk bond market is showing further signs of life as five companies announced new US dollar offerings on Tuesday, banks managing the deals told IFR.

Four of the issuers - hospital operator Tenet Healthcare, real estate investment trust MGM Growth Properties, grocer Albertsons and energy company Vistra - are expected to price trades later on Tuesday and will use proceeds to refinance debt.

The surge in issuance follows the reopening of the market earlier this month after a roughly six-week shutdown in primary.

A rally in spreads has helped lure issuers to start funding again, while cash has started to pour back into the asset class. That combination helped several issuers last week, including HCA Healthcare, to price upsized deals.

Average US junk bond spreads have tightened by 106bp so far this year to 427bp over US Treasuries, and new deals have performed well in the secondary.

HCA's new issue is up more than a point in the after-market, according to MarketAxess.

Additional reporting by Mike Gambale

Writing by Natalie Harrison


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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