US Chart of the Week: 23rd April 2020
As the equity and debt, markets regain their footing after a period of prolonged volatility and a virtual freeze in new issuance due to the coronavirus (COVID-19) pandemic, the high yield bond markets have opened back up as issuers begin to address near-term cash needs. April issuance has surpassed USD 21bn thus far, eclipsing the 4.7bn issuance recorded in March. This new issue has come at a price however, as the weighted average yield to maturity shot up to 7.57% so far this month, compared to the 5.16% average seen in 1Q20.
There has also been a shift to secured issuance, which accounted for just 32% of high yield bond volume in 1Q20, but has ballooned to 83% of issuance in April, as lenders reprice risk and seek additional protection in this new market environment.
At the individual bond level, pricing on new deals has ranged from 4.125% (and par) for CDW Corp to 11.25% (and an issue price of 99) for Carnival Cruise Lines. Examples of other deals include Tenet Healthcare’s 7.5% (and par) secured bond and Nordstrom’s 8.75% (and par) note.
Colm Doherty is Debtwire’s Global Head of Primary Market Analysis. He is responsible for leading the production of primary market analysis and reports focused on the leveraged loan and high yield bond markets. Prior to joining Debtwire, Colm was Director of Analysis at Thomson Reuters LPC covering leveraged loans, CLOs and high yield bonds.
Colm has a B.A. in Economics & Legal Science from National University of Ireland Galway and an MSc. in Accounting & Finance from Ulster University.
Colm Doherty is Debtwire’s Global Head of Primary Market Analysis. He is responsible for leading the production of primary market analysis and reports focused on the leveraged loan and high yield bond markets. Prior to joining Debtwire, Colm was Director of Analysis at Thomson Reuters LPC covering leveraged loans, CLOs and high yield bonds.
Colm has a B.A. in Economics & Legal Science from National University of Ireland Galway and an MSc. in Accounting & Finance from Ulster University.
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