The high-yield calendar is light heading into the week, but the issuance backdrop remains strong.
Helios Software Holdings Inc., also known as ION Corporates, is set to price a $350 million 7-year junk bond on Monday, the only deal known to be in the high-yield pipeline.
Strong growth, continued low-cost borrowing and an oil rally are all contributing to a friendly backdrop for high-yield issuance. Last week, junk-rated U.S. companies set a record for most bonds ever sold in April, capping a 12-month issuance boom. The month’s supply currently stands at more than $40 billion.
Next month has the potential to be even busier.
“May is seasonally the strongest month of high-yield issuance,” Bank of America Corp. strategists led by Oleg Melentyev wrote in a report Friday. BofA is projecting $47 billion of high-yield supply next month.
Loan launches slowed this week, with most deals earmarked to fund acquisitions and buyouts. Loan funds continue to see robust demand, posting a $1 billion-plus inflow for the third week in a row, according to Refinitiv Lipper. That’s the first time this has happened since December 2016, the data show.
In distressed debt, mall owner Washington Prime Group’s amended forbearance agreement is set to expire in the middle of next week pending a further extension. Voyager Aviation Holdings also faces a deadline on its debt exchange offer that expires Monday.
