The average bid of high-yield flow-name bonds in the secondary dipped two basis points in today’s reading, to 106.38% of par, yielding 6.21%, according to LCD, a division of S&P Capital IQ.
The essentially unchanged reading puts the average up 945 bps in the year at this final 2012 observation and higher by 1,845 bps since the trough of 87.93 recorded on Oct. 4, 2011. More recently, though it’s the first reading in the red after eight consecutive gains, for a 383-bps run-up since mid-November.
The reading at 106.4 on Tuesday eclipses the previous 2012 peak of 106.15 that was logged three months ago, on Sept 18. That reading was, in fact, the all-time high of the average since LCD began collecting data on the flow-name bond sample in 2001.
Gains total 24 bps in the week and 77 bps dating back two weeks. Despite the small decrease today, the firm tone in the high-yield market has been fairly resilient in recent sessions albeit on thinning flows as market activity begins the wind down into the holiday break.
Moves among sample constituents were mixed with five gainers countered by four decliners while six were unchanged. Most movers in either direction were modest, though Dish Networks 6.75% notes stand out with a 1.25-point slump, to 114.75, as the issuer hit the market with a $1.5 billion drive-by new issue.
Despite the rangebound price reading, the average yield to worst slipped nine basis points, to 6.21%, and the average option-adjusted spread to worst tightened eight basis points, to T+534, or L+523, swap-adjusted.
For reference, the averages at the 2007 peak were 7.69%, T+290, and L+237, though at the more recent peak in September they were 6.27%, T+538, and L+523. And recall that at a recent trough three months ago, yields and spreads were 8.47%, T+745, and L+710. – Staff reports