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High-Yield Roundup

20 Apr 2002

Last week saw a firm tone through Thursday as the high-yield market absorbed two to three new issues per day without a hiccup. Bids were weaker in crossover retail names like JC Penney and Gap Inc. Here was selected other action:

Nextel Takes Off

Nextel Communications beat expectations for subscribers, and posted a smaller first quarter loss than analysts had expected. The 9.375% notes of '09 (B1/B) were bid up to 68 from 62.5, but were slipping late Thursday--to 67.5 by the close.


Dana Corp. Hangs In Despite Poor Earnings

A positive bid for the auto parts sector kept Dana Corp.'s bonds from slipping, even though the auto parts supplier posted weak first quarter numbers. The 9% senior notes of '11 (Ba3/BB) stood firm at a 101.5 bid.

Chemicals Slide On Higher Oil Prices

Higher energy prices led to weakness in the chemical sector. Lyondell Chemical Company's 9.625% senior secured notes of '07 (Ba3/BB) dropped from a 102 bid to 101. Millenium Chemicals' 9.25% senior notes of '08 (Ba1/BBB-) dropped from 103.5 to 102 at Thursday's close.

Higher prices have an immediate impact upon margins, as producers have a difficult time passing on raw material costs, according David Troyer, top-ranked chemical analyst on the Institutional Investor 2001 All-America Fixed-Income Research Team. "Our competitive position around the world is impaired when we have to pay higher prices for energy," he says.

20 Apr 2002