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High Yield Bond Bids Surge Anew, Hit 10-Week Peak

The average bid of LCD’s U.S. flow-name high-yield bond sample surged 82 bps in today’s reading, to 101.55% of par, yielding 6.26%, from 100.73, yielding 6.27%, on May 18. Within the 15-bond sample, there were 11 gainers, two decliners, and two unchanged issues.

us high yield bond bids

The average bid is now up 66 bps over the last two weeks and 130 bps over the last four weeks. Today’s results show the highest average bid price for the sample since March 2, when the average bid price was 102.10.

While the majority of the constituents were in the black in today’s assessment, there were a few standouts. Community Health 6.875% notes due 2022 increased three points, to 89.25. Also, PetSmart 7.125% notes due  2023 were two points higher, at 94.5. The retailer’s sole existing bond issue has been active in the secondary market following the launch of a $2 billion, two-part offering to back the purchase of Chewy.com.

Meantime, the decliners in today’s reading were Altice 7.75% notes due 2022 at 106, and Dollar Tree 5.75% notes due 2023 at 106.25, both a quarter of a point lower.

MGM Resorts 6% notes due 2023, and Post Holdings 5% notes due 2026 were both unchanged.

The average yield to worst was one basis point lower, at 6.26%, and the average option-adjusted spread tightened nine basis points, to T+436. However, both the average yield and average spread remain wider in comparison to broad high-yield market indices. For example, the S&P Dow Jones U.S. Issued High Yield Corporate Bond Index II closed on May 22 with a yield to worst of 5.38% and an average option-adjusted spread to worst of T+417.

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This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

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