High-yield hung in relatively well through Thursday of last week considering the carnage on the equity side.New issuance included a $305 million Goldman Sachs-led deal for Oregon Steel Mills. Though Qwest Communications' bonds took a beating, traders and salespeople believe at least 30% remains in high-grade accounts.
HealthSouth Weaker Despite Stock Buyback
HealthSouth's 8.375% notes of '11 (Ba1/BBB+) were off four points, as its equity price weakened. The company claimed it did not know the reason for the decline, but even after it bought back some of its stock, the bonds did not recover.
Level 3 Takes Off After Buffet Investment
Level 3 Communications' 9.125% notes of '08 (Caa3/CCC-) were up 20 points to 54.5 after Warren Buffet and two other investors agreed to inject $500 million into the troubled telecommunications company. One high-yield trader said, "What the [expletive deleted] is Warren Buffet thinking?" noting that Level 3 has "a lot of fiber in the ground." The trader then concluded that the question was best put to the Sage of Omaha himself. Buffet could not be reached.
Allied Waste Recovers After Initial
Accounting Worries
Bonds of Allied Waste Industries staged a recovery last week. The paper had sold off in the previous week as rumors of questionable accounting practices began to circulate, but traders say the rumors appear unfounded. The firm's 7.875% notes of '09 (Ba3/BB-) were up two points through Thursday to a 96 bid.