High yield bond issuance in the U.S. saw a second consecutive solid week, with $10.4 billion in volume, following up on the $9 billion issued the previous week. The $10.4 billion is the busiest high yield week since the whopping $16.5 billion recorded in late September.
Last week’s seasonal rush to market was hastened by fresh worries about the possibility of tighter monetary policy and rising rates in 2014, says LCD's Matt Fuller. A rush of drive-by deals fattened the calendar, and several of the acquisition-related deals in the shadow pipeline were pushed forward to last week’s business.
Of note,
The surge in issuance comes as cash inflows into high yield funds slows. According to Lipper, U.S. high yield funds and ETFs saw a scant $16 million inflow last week, following a $141 million outflow the previous week (that was the first outflow since early November). Year to date, U.S. high yield funds have seen a net $2.6 billion inflow, says Lipper.
As for yields, the average yield on new issues priced over the past 30 days was 6.74%, largely unchanged from the 6.75% average during the previous 30 days, according to LCD.
