High-Yield Market Faces Continued Supply Shortage

The high-yield new issue calendar is surprisingly quiet heading into the fourth quarter, with no large deals in the market at the moment and only a handful of deal having been priced since Labor Day.

  • 17 Sep 2004
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The high-yield new issue calendar is surprisingly quiet heading into the fourth quarter, with no large deals in the market at the moment and only a handful of deal having been priced since Labor Day. “I would have expected to see the calendar build and traders pull liquidity out of the market place causing spreads to widen, but it hasn’t happened yet,” said Richard Coons, portfolio manager of Catrock Capital Management.
 
With $850 million of inflow into high-yield in the past few weeks and no new issuance, the market has tightened. This allows for issuers to sell deals with more aggressive structures, said one high-yield banker. “From an issuer’s perspective, you can achieve a better coupon right now. It’s not going to get any better than this,” he added. MGM Mirage’s recently issued 6% of ’9s had the lowest yield ever issued for a gaming credit, according to a banker at J.P. Morgan, which underwrote the deal. 
 
The forward calendar consists mainly of deals from highly leveraged companies, notably Vanguard Health Holding, rated Caa2 by Moody’s Investors Service, and Graham Packaging Company, rated Caa1 by. Despite investor demand for paper, one buyer expressed ambivalence over how the Vanguard deal will go. “It’s a $700 million deal led by Citigroup, and I’m not sure they put triple-Cs out so well,” he said, adding $700 million is very larger for a triple-C sale. Joe Christinat, spokesman for Citigroup, did not return calls by press time.  
  • 17 Sep 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 357,043.08 1340 9.06%
2 JPMorgan 319,078.96 1445 8.09%
3 Bank of America Merrill Lynch 316,666.04 1099 8.03%
4 Goldman Sachs 236,643.87 789 6.00%
5 Barclays 230,494.28 891 5.85%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 34,591.50 163 6.58%
2 Deutsche Bank 34,293.84 117 6.53%
3 Bank of America Merrill Lynch 31,293.04 95 5.96%
4 BNP Paribas 27,578.61 168 5.25%
5 SG Corporate & Investment Banking 23,982.83 136 4.56%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 19,745.92 80 8.86%
2 Morgan Stanley 16,323.54 83 7.32%
3 Citi 15,946.50 94 7.15%
4 UBS 15,487.17 60 6.95%
5 Goldman Sachs 14,053.61 76 6.30%