Loading ...Bonds With “Worst-Ever Covenants” Are 3x Oversubscribed
It wasn’t just the loans with the terrible covenants that got a preferential revision: yields on the bonds were also reduced, with the $1 billion portion of secured notes offered at 6.25% from an initial range of 7% to 7.25%. The $750 million of equivalent euro bonds were offered at 4.375 percent, down from an original range of low 5 percent. Another $1.95 billion unsecured-bond offering is being discussed at a price of 225 basis points above the secured bonds, making further pricing shifts likely.
All this takes place in a time when BBG’s Sebastian Boyd reports, junk, leveraged loans and CLOs have all come roaring back this year after an awful fourth quarter. And while flows have been more than supportive (unlike equities, at least until this week), supply just isn’t there.
https://www.zerohedge.com/news/2019-03-15/bonds-worst-ever-covenants-are-3x-oversubscribed