Amid investor investor cash inflows to the asset class the U.S. high yield bond market kicked into higher gear last week, posting nearly $10 billion in volume, more than double the amount seen the previous week and the most since the middle of May.
With last week's volume, high yield bond issuance so far in 2014 is $165.4 billion, slightly above the $162.7 billion recorded at this time a year ago. Full-year issuance in 2013 was a hefty $322 billion, the second-highest yearly figure on record (the highest: $344.8 billion in 2012).
The surge in activity comes as technicals bolster the corporate high yield debt market. Despite some shakiness in the ETF sector, U.S. high yield funds last week saw their sixth straight period of net inflows, totaling some $2.7 billion, according to Lipper.
That momentum is impacting yields. The yield to worst on the S&P U.S. Issued High Yield Corporate Bond Index was a slim 4.91% last week, according to LCD's Joy Ferguson, and the average new-issue yield on high yield deals priced over the past 30 days dipped inside 6%, at 5.98%, according to LCD.
The highest-profiles deals last week: Dialysis concern DaVita DaVita Healthcare Partners issued $1.75 billion of B+/B1 rated notes at 5.125%, backing repayment of bank debt, while Gates Global issued $1 billion of B/Caa2 notes backing the LBO of transmission belts and fluid-power products concern by Blackstone.
For more news, data, analysis on the high yield bond market: www.HighYieldBond.com
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