Daily high-yield issuance volume on Jan. 19 is 2nd highest on record

Building on a hot start for issuance this year, today's slate of high-yield offerings accounted for the second-highest daily volume total on record, according to LCD. Pro forma for deals slated to price today, issuers shopped 11 tranches of new high-yield bonds, totaling $8.985 billion.

The only higher dollar-volume total on record dates to April 23, 2014, when the market cleared $11.275 billion of new-issue supply across five tranches, LCD data shows. That high-bar total largely reflected the $10.675 billion of dollar tranches issued as part of a record-setting cross-border offering from Numericable and Altice, totaling the equivalent of $16.67 billion, to support a joint M&A effort.

Today's slate of deals included no offerings larger than a $1.775 billion print for Community Health Systems Inc. Other inputs came via deals for Hilton Domestic Operating Co. Inc. ($1.5 billion), Howard Hughes Corp. ($1.3 billion, in two parts), Uniti Group Inc. ($1.11 billion), alongside smaller-scale prints for Indigo Natural Resources LLC. ($700 million), MEG Energy Corp. ($600 million), PrimeSource Building Products Inc. ($400 million), Commercial Metals Co. ($300 million) and Resolute Forest Products Inc. ($300 million).

The 11 tranches pitched today is just one shy of the high tranche count for any session. Issuers priced 12 tranches in a single day on four occasions, but all those counts were recorded from 2010-2013, according to LCD. Similarly, the other three 11-tranche daily counts occurred from 2013-2014.

More issuance records may fall by the wayside before the month is done. Pro forma for today's big session, the year-to-date volume of new high-yield offerings stands at $31.9 billion, up more than 58% from the 2020 pace. Already, January 2021 ranks second on the list of highest totals for a full January period, trailing only the $38.2 billion printed over all of January 2020.

Most of today's deals backed refinancing efforts, as borrowing costs continue to slide for high-yield borrowers. Notably, through Jan. 15, 2020, the average yield at issuance for new high-yield senior unsecured deals was a skinny 4.77%, down from 5.78% in December and running below all full-month averages for LCD records since 2005. The prior full-month low was 4.97%, in November 2020.

Across all priority classes, the 5.03% average yield at issuance for new high-yield bonds through Jan. 15 is down from 5.84% in December and tracking below the prior full-month low of 5.15%, recorded in December 2019, LCD data show.