The secondary market was strong last week, having a terrific day last Wednesday and turning more lackluster later in the week, according to investors. The market responded to a positive stock market earlier in the week, a lot of short coverings and a fair amount of buying in the absence of a large new issue calendar. Here are some notable movers.
Salton Shifts Again
Salton Inc, a kitchen and personal care appliance marketer, moved up after a heavy decline in prior weeks due to a quarterly loss and a breach in a credit covenant. The 10 3/4% notes of ’05 traded up to 68 and settled at 66 mid-week, moving up from the mid to high 50s a week earlier. Investors are getting more comfortable with the credit which said went down too far in recent weeks, said one high yield investor. “A lot of people took a quick look and felt it was worthwhile,” he noted.
Reliant Looks Reliable
Houston-based Reliant Energy’s 9 1/4% notes of ’10 rose three points last week from 101 to roughly 104 after the company announced power plant sales in upstate New York worth $900 million. Proceeds from the sale will be used to repay bank debt from its Orion Power New York and Orion Power Midwest subsidiaries, reducing overall new debt significantly.
Energy Fades
Oklahoma City-based Chesapeake Energy saw its 6 7/8% notes of ’16 trade down a couple points to 93 late Thursday. The drop was ahead of the new Chesapeake offering of $300 million in senior notes due in ’14, according to one high-yield trader.