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US High Yield Bond Issuance Soars To $15B, Thanks To Valeant

This article is more than 9 years old.

The U.S. high yield bond market saw a gaudy $15.3 billion in issuance last week, the largest weekly total since September 2013, thanks largely to Valeant, which priced $8.5 billion in notes backing the company’s proposed acquisition of Salix. (Valeant also priced a €1.5 billion tranche which is not included in the U.S. weekly tally).

With the recent activity, year-to-date volume stands at $78 billion, roughly 35% ahead of the pace seen in 2014.

Away from Valeant, a range of issuers stepped in with mostly higher-rated bond and loan-repayment efforts, according to LCD’s Joy Ferguson.

On Monday, drive-by bond refinancing deals hit the market, from HealthSouth , Masonite International, and Crestwood Midstream Partners, with all garnering solid demand from large rollover components. On Tuesday, a $600 million M&A bond offering from Tronox Finance was ushered to market via a UBS -steered syndicate, while Jefferies was sole bookrunner on the second print from KCG since a takeover of Knight Capital by GETCO, after a 2012 liquidity crunch on account of a trading error, Ferguson says.

The Valeant deal comes as investors beat a serious retreat from high yield funds. Or from ETFs, anyway. Last week the sector saw a net $2 billion withdrawal from high yield funds, almost entirely from ETFs, according to Lipper.

With the retail retreat and potential case of investor indigestion (Valeant), yields are inching higher, to 6.11% on March 13 from 5.92% a week previous, according to the S&P U.S. Issued High Yield Corporate Bond Index (that's a yield-to-worst figure).

For high yield bond news and analysis check out www.highyieldbond.com, a free site powered by LCD to promote the asset class.