Evergreen Investment Management was in the market last week seeking to add $60 million in wireless credits. Prescott Crocker, portfolio manager at the firm, which has $5.5 billion in high-yield assets, says the growth possibilities in the sector are impressive, and a number of credits have sold off recently.
Names Crocker was looking at include Rural Cellular, whose 9.875% notes of '10 (Caa1/CCC) were bid at 94.5 last Monday, down from a recent high of 102.5 some three weeks earlier. He also likes the American Cellular 9.5% notes of '09 (Caa3/NR) which were at 98--down from a bid of 102.5, and the Dobson Communications 10.875% notes of '10 (B3/CCC)--six points off their recent high of 112. "What you have is a good, solid, high-growth industry, with rapidly improving EBITDA," he says.
Evergreen was also seeking to add $40 million of Reliant Resources bonds. A recent issue from the independent power producer, the 9.5% notes of '13 (B1/B-), was bid at 95 last Monday--seven points off a recent high. "We think this is a successful energy development company, and a turnaround electric utility. It's been hit by oversupply in the sector, and energy has been high-beta, so when the market gets nudgy, it cheapens," he says.
The Boston firm is benchmarked against the J.P. Morgan high-yield index. It is underweight aerospace, gaming, steel, paper, food and wireline telecom. It is overweight homebuilding, chemicals, broadcasters, cable, healthcare, retail and energy.
