Last week was a strong one for high-yield, as even the beleaguered wireline telecom sector bounced significantly after testing new lows a week earlier. Here is other notable action:
Towers, Wireless Take Off
Bonds of telecommunications tower companies were the talk of the high-yield market. Crown Castle International's 9.38% senior notes of '11(B3/B) rose from a 74 bid all the way to 90. The wireless sector was also strong: Nextel Communications' 9.375% senior notes of '09 (B1/B) gained another three points, and has soared from 52 to a 67 bid in the last two weeks. One exception in the wireless sector was Centennial Cellular. Rumors that the company may be headed for bankruptcy sent the 10.75% senior subordinated notes of '08 (B3/B) plunging 8 points to a bid of 50.
Calpine Jumps On Buyout Rumors
Rumors that Calpine Corp. may be taken over by Duke Energy sent its 8.5% notes of '11 (Ba1/BB+) up from 68 to 81.5. Calpine had lagged due to an apparent inability to resolve its financing issues, says an analyst.
Steel Companies Surge On Tariff Proposal
President Bush's proposed tax on imported steel caused bonds of U.S. steel companies to turn in a strong week. U.S. Steel's 10.75% notes of '08 (Ba3/BB) were up from a 96 bid to a 100.5 bid last Thursday.