(Bloomberg) – Union offices expect another mixed week in the primary investment grade bond market, calling for a new supply of $ 15 billion to $ 20 billion as earnings season is in full swing. Sales of high yield bonds, meanwhile, are expected to remain active amid a wave of refinancing that has seen some virus-hit companies cut borrowing costs.
Only $ 10.6 billion of high-quality bonds valued this week, making it the second slowest of the year, according to data compiled by Bloomberg. Among the expected programming for next week’s activities is the financial issuance of regional banks, as well as other companies after their publication.
Credit investors had a volatile start to the week in the aftermath with a recovery in spreads, and Barclays Plc strategists expect the market to remain resilient.
“Despite renewed concerns about the growing number of Covid cases, investors continue to view the economic environment and corporate earnings potential in a positive light,” the strategists led by Bradley Rogoff wrote on Friday.
But with high valuations in both investment grade and high yield securities, “finding opportunities remains difficult,” added Rogoff.
A earnings record loaded next week includes Tesla Inc., General Electric Co., Alphabet Inc., Apple Inc., Boeing Co., Ford Motor Co., and Amazon.com Inc.
The Bank of Nova Scotia will hold calls to investors for a durable bond on Monday.
The strategists of Bank of America Corp. saw the massive sale of high-risk bonds in the United States as an opportunity to buy debt.
“Recent volatility has improved the risk-return profile of HY going forward,” BofA analysts led by Oleg Melentyev wrote in a note on Friday. The bank raised its total return forecast over the next 12 months to 3% to 6%, from 2% to 4.5% previously.
The junk-bond pipeline is light as the week approaches with only one known deal priced. Allen Media LLC is selling $ 340 million in additional 10.5% bonds which are scheduled to be priced on July 27.
California Pizza Kitchen Inc. is looking to refinance debt from its exit from bankruptcy as its owners consider a possible sale or IPO of the restaurant chain, according to people with knowledge of the matter. The exact timing of the refinancing has not been decided, but it could be launched in the coming weeks, residents said. The deal will target the $ 177 million in debt left on the company’s balance sheet after it emerged from bankruptcy last November.
In leveraged loans in the United States, two dividend-guaranteed deals have meetings scheduled for Monday: the $ 2.5 billion offer from Standard Industries Inc. and the $ 770 million deal from Ring Container. Technologies Group LLC. A call to lenders is also scheduled on Monday for the $ 200 million loan from Wahoo Fitness LLC, which funds a controlling stake in the cycling and endurance training technology company by Rhone Group.
Among the loans due next week are the $ 3.5 billion sale of Pilot Travel Centers LLC to buy out preferred interests, the $ 2 billion refinancing of Air Canada and the $ 1.4 billion transaction of Sovos Compliance to refinance debt, finance mergers and acquisitions and finance distribution to shareholders.
In troubled debt, secured creditors of Endo International Plc hired Evercore Inc. as financial advisor as the drugmaker faces potential damage from opioid-related litigation, people familiar with the situation say. .
Ailing issuer Peabody Energy Corp. is expected to release its second quarter results before market opens on Thursday, July 29, and AMC Entertainment Holdings Inc. will hold its annual meeting of shareholders on the same day.
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A earnings record loaded next week includes Tesla Inc., General Electric Co., Alphabet Inc., Apple Inc., Boeing Co., Ford Motor Co., and Amazon.com Inc.Previous