U.S. leveraged finance issuance totaled a hefty $20 billion last week thanks to the largest single high yield bond tranche ever and a host of new credits in an improving leveraged loan market.
The weekly total is the most for the combined loan/bond markets since the $31.6 billion during the first week of November, according to S&P Global Market Intelligence LCD.
Numericable was the big news of the week as the French cable concern dramatically upsized its planned $2.25 billion bond offering, backing a refinancing, to $5.2 billion – the largest in-market increase for a single tranche ever – amid investor demand.
“The stunning upsize surpassed the prior record holder of $2.65 billion, to $3.4 billion, on the 7% notes due 2023 backing First Data last fall,” writes Matthew Fuller, who covers the high yield market for LCD.
With the help of Numericable, U.S. high yield bond issuance totaled $10.9 billion last week, the most in five months, says Fuller. There were other billion dollar-plus deals, as well: one for Charter Communications and one backing MGM Growth Properties.
The increased activity comes as investors return to high yield funds and ETFs, which saw $1.2 billion in cash last week, the 7th week of net inflows out of the last eight, according to Lipper.
With last week’s deals, U.S. high yield issuance year-to-date totals $47 billion. While that’s down some 55% from the same period last year, the 2016 market continues to gain ground on the 2015 pace (the YOY difference was roughly 75% a few weeks ago).
The U.S. leveraged loan market was likewise busy last week, posting $9.1 billion in issuance. Numericable was a factor here as well, contributing the week’s largest credit, a $2.6 billion deal that is part of the company’s refinancing package. But Numericable did not have the loan market to itself.
“With technicals receiving a quarter-end booster shot, investors filled a procession of deals for well-rated and seasoned issuers this week, writes LCD’s Chris Donnelly, in his weekly market wrap. “For well-regarded issuers, investors again appear to be throwing in commitments quickly, driving accelerated timing.”
The $9 billion this week brings year-to-date U.S. leveraged loan issuance to $102 billion. That’s down roughly 7% from the same period last year. – Tim Cross
This story first appeared on www.lcdcomps.com, LCD’s subscription site offering 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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