The average bid of LCD’s flow-name high-yield bonds gained 45 bps in today’s reading, to 99.20% of par, yielding 7.10%, from 98.75%, yielding 7.22%, on Dec. 8. Within the 15-bond sample, there were nine gainers, three decliners, and three unchanged issues.
Today’s reading represents the highest level for the average bid since Oct. 27. While the majority of the sample was in the green, NRG Energy 6.625% notes due 2027, buoyed by recent bullish market sentiment toward commodities, saw the largest increase, surging 1.75 points, to 95.5. The other big gainers were Chrysler Group 5.25% notes due 2023, which rose 1.50 points, to 102, and Altice 7.25% notes due 2022, which advanced a full point, to 106.75.
Declines were relatively modest among the constituents. Scientific Games 10% notes due 2022 shed half of a point, to 96.75, while PetSmart 7.125% notes due 2023 lost a quarter of a point, to 102.75, and Dollar Tree 5.75% notes due 2023 fell a quarter of a point as well, to 106.75.
On Dec. 1, the sample was updated to include the PetSmart bonds after Constellation Brands 4.25% notes due 2023 were removed from the sample following the company’s upgrade to investment-grade status.
With the change to the sample, no evaluation of trailing two-week and four-week data will be presented.
The average yield to worst slipped 12 bps, to 7.10%, and the average option-adjusted spread retracted 20 bps, to T+498.
The average yield remains wider when compared to high-yield’s broader market averages, while the spread is tighter. The S&P Dow Jones U.S. Issued High Yield Corporate Bond Index closed on Dec. 12 with a yield to worst of 5.93% and an option-adjusted spread to worst of T+544. – Staff reports\
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