Covenants of healthcare company junk bonds have been in declining health this year. Covenant quality for these companies is declining at a faster rate than the industry as a whole. Lower default rates are partly to blame.
Some new players are breaking into high yield bookrunning.Bulge-bracket investment banks still dominate the underwriting league tables for larger deals. But they are ceding some ground on smaller deals, particularly those in the $100 million to $250 million range.
A judge has ruled that the involuntary bankruptcy of FMB Bancshares in Lakeland, Ga., may proceed, a decision that could embolden more trust-preferred creditors to pursue a similar strategy. Involuntary bankruptcy has emerged in recent months as a tactic for trust-preferred holders seeking repayment.
Refinancing is not the driver of high yield bond and leveraged loan issuance that it was over the last two years, and thats not necessarily a good thing. So far this year, 54% of the proceeds of leveraged loans and 59% of high yield bond proceeds went toward refinancing. But thats down from this point in 2013.
The primary junk bond market, which has resembled a ghost town for the past two weeks, is poised to come back to life in September, with new issues totaling more than $42 billion on tap. Larger deals may hold the most appeal for some buyers.
Constellation Brands fast growth in the beer business is diversifying what has been a traditional wine and spirits operationand also leading the way for plans to reduce $6.8 billion in net debt obligations, which include a $990 million term loan repricing that hit the market last week.
Retail investors are fleeing high yield bonds funds at a record pace of $7.1 billion this week, forcing fund managers to tap their cash reserves and sell some of their most liquid holdings to fund redemptions, even if they feel that the correction is a technical one.
Verso Paper pulled off a debt exchange it needs to complete its $1.4 billion merger with NewPage Holdings after sweetening the terms for subordinated bondholders a second time and lowering the percentage of acceptances required.
The entrance of new equity investors, including business development corporations and CLO equity funds, willing to contribute the first-loss piece has led to a return of warehouse bridge funding lines that dried up after the financial crisis.
The outlook for credit spreads in the coming three months remains slightly optimistic for high-yield investors, despite expectations of growing corporate defaults, according to the latest quarterly member survey from the International Association of Credit Portfolio Managers.
While the Volcker Rule gets blamed for the sudden lull in CLO issuance in January and February, its now getting some credit for helping one aspect of the roaring comeback of collateralized loan obligations: the infusion of new primary investors in AAA tranches.
Zebra Technologies agreed to purchase the enterprise business of Motorola Solutions, which had sales of $2.5 billion in 2013, for $3.45 billion in an all-cash transaction. Motorola's enterprise sales are more than twice those of Zebra.
A record rise in the number of first-time, single B-rated issuers has Standard & Poors concerned that a greater number of companies will be at risk of default in the event of a slowdown in the U.S. economy
Just when you thought that risky corporate borrowers were getting away with everything, investors are demonstrating that have at least a little fight left in them. High yield bonds are in such high demand that investors have been willing to give up all kinds of protection in order to put their money to work. But non-call periods are a line in the sand.
Moodys Investors Service downgraded its outlook on regional casino operators, to negative from stable after 15 of 18 states reported declining year-over-year gaming revenues for consecutive months. The weaker-than-expected results were surprising.