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[U.S. HY Close] : Higher As Spreads Tighten Further

By Peter Knapp March 21 2024 at 21:34

Today's economic data releases showed continued strength, with Philly Fed higher than forecasts (3.2), low Initial & Continuing Claims (210k, 1807k), in-line PMI complex (Man. 52.5, Svcs 51.7, Composite. 52.2), and above estimates Leading Index (.1) and Existing Home Sales (4.38m, 9.5%). Treasury rates erased gains, moving back to yesterday's close. Stocks closed higher, but off the high's of the day. In rates, the front end was higher by one to three basis points, 10yrs held their ground, the long bond shed two basis points, and the 5s-30s curve was flatter by three basis points. Economic data releases are essentially done for the week.

One new issue was announced, upsized, and priced today:

$800m [RHP Hotel Properties, LP, RHP Finance Corporation (Ryman Hospitality Properties Inc.)] (RHP) 144a/Reg S 8nc3 senior unsecured note.B1/BB-/BB-. Via Bookrunners: JPM (B&D) +. IPT: 6.625% - 6.75%. Px Talk 6.375% - 6.50%, and priced at 6.50%.

The long awaited bond side of the Truist Insurance buyout was announced this afternoon for expected pricing tomorrow, March 22:

$2.75bn [Panther Escrow Issuer LLC, to be merged into. Truist Insurance Holdings, LLC & Panther Co-Issuer, Inc.] ( ) 144a/Reg S (no rts) 7nc3 senior secured note. B2/B/B+ (expected). Special Call: up tp 10% at 103%. Via Bookrunners: MS (B&D) / BofA / JPM / WFS / TRUIST / STONE POINT CAPITAL MARKETS / BARC / RBC / CITI / GS / KKR / BNPP / MIZ / TD / APOLLO / SANT / JEFF / UBS / BMO / CAPONE / CITZ / NATX / STIFEL.UoP: finance the buyout of TIH, LLC (f/k/a Truist Insurance Holdings) by Stone Point Capital and CD&R. Denoms: 2k x 1k. Investor call at 10:00AM EST tomorrow, 03/22, for pricing tomorrow. Biz: Property, Casualty, Life Insurance company. Hq'd in Charlotte, NC.


Today, March 21, the 2y yield is higher by three (+ 3.4bps) basis points to 4.636%. The 5y yield is higher today by one (+ 0.9bps) basis points to 4.253%,. The 10y yield is higher by one (+ 0.6bps) basis points to 4.267. The 30y yield is lower by a two (+ 1.8bps) basis points to 4.435%. The 5s-30s curve is flatter by two and a half basis point on the day to + 18bps. The Dollar Index (DXY) is higher today by + 0.602% at 104.011.

Major U.S. equity indices are higher today (March 21), (DOW + 0.68%, S&P + 0.32%, and NASDAQ + 0.20%, VIX - 00.12 at 12.92.

The CDX HY index is higher today, March 21, by + 0.134 at 107.354. The Index was higher on March 20, by + 0.353 at 107.220. The Index was higher on March 19 by + 0.207 at 106.866. The Index was higher on March 18, by + 0.162 at 106.671. The Index was lower on March 15, by - 0.167 at 106.508. The best performers are CommScope Inc. (COMM), Bausch Health Cos Inc. (BHCCN), and Community Health Systems Inc. (CYH). The worst performers are Antero Resources Corp. (AR), MGIC Investment Corp. (MTG), and PG&E Corp. (PCG).

The largest HY ETFS are lower today (03/21) by - 0.03% on average, and are higher by + 0.91% over the past five trading days, on average.


CCC's were the under performer today, lower by - 0.125%, tightening in spread by two basis points, while the other ratings were higher by approximately 0.2%, all tightening by about ten basis points.

The ICE/BofA US HY Index average is higher today, March 21, by + 0.192%. The Index was higher on Mar. 20, by + 0.077%. Spreads were narrower on Thursday (03/21). The average was narrower by nine (- 09bp) in the average at +305, narrower by ten (- 10bps) basis points in BB's at +181, narrower by nine (- 09bp) in B's at +302, and narrower by two (- 02bps) in CCC's. at 846. Over the past five trading sessions, the Average spread is narrower by eleven (- 11) basis points, BB's are narrower by thirteen (- 13bps), B's are narrower by ten (- 10bps), and CCC's are narrower by six (- 06bps).