High Yield Report articles from August 2005

High Yield Report archives from August 2005

Corporate Focus: CEO Pay Not Tied To Lenders' Interests?(compensation of chief executive officers)
August 1, 2005... In today's post-Enron Corp. world, where skepticism of corporate governance is a routine sentiment, an empirical link found between excessive CEO compensation and increased credit risk may not be too surprising. That said, investors should...

Market View: The Dangers Of Buying Without An Anti-Dividend Net.
August 1, 2005... The leveraged finance market is in the midst of a dividend deal boom, and yet the only true protection available to bondholders - deal covenants specifically outlawing a bond issuer from doing a subsequent dividend deal - remain solely a...

US Company News: DB Gives Investors Allocation Shaft For SunGard.(SunGard Data Systems Inc.)
August 1, 2005... The much awaited jumbo bond component of SunGard Data Systems Inc.'s leveraged buyout (LBO) financing ripped through the high yield market last week, and $3 billion in bonds were raised - $1.75 billion more than originally planned. But the deal...

Hedge Funds: Hedge Funds Are Shaping Global Credit Market.(reports)
August 1, 2005... Hedge funds are growing increasingly prevalent across various market sectors, as the overall size and scope of the alternative investment vehicles require increasingly more capital to grow. But the increased correlation hedge funds are causing...

Ratings: Fitch Launches Recovery, Issuer Default Ratings.
August 1, 2005... Fitch Ratings launched its new recovery ratings ("R") and issuer default ratings (IDRs) products last week. The new ratings will be rolled out during the remainder of 2005, the ratings agency reported, starting with corporate sector ratings,...

Syndicated Loans: Second Liens: The Fulcrum' Of The Future Distressed Market?
August 1, 2005... There is a new player in the debt markets that has yet to be tested in a full credit cycle - one that is notoriously aggressive and unpredictable. This player is the second lien loan. By one estimate, hedge funds now make up perhaps 70% of the...

Market Buzz.(appointments)
August 1, 2005... BNP Paribas announced several appointments to the firm last week, including the appointment of Brian Hannon, formerly of Imperial Capital LLC, as a senior high yield trader. Hannon was responsible for distressed debt trading at Imperial. At BNP...

Gainers & Losers: GMAC/Delta.(General Motors Corp., General Motors Acceptance Corp.)(Delta Air Lines Inc. and Northwest Airlines Corp.)
August 1, 2005... Last week's gainers included General Motors Corp. (GM) and General Motors Acceptance Corp. (GMAC), as GMAC is reportedly in the process of selling its residential mortgage business (ResCap), as well as up to $55 billion of loans to Bank of...

AMG Data Services.(mutual fund report)(Brief Article)
August 1, 2005... According to AMG Data Services, high yield funds reported outflows last week of nearly $105 million. This follows $52.5 million in outflows in the prior week. The number of high yield funds that reported inflows was slightly up over the...

US Company News: Deals Galore: No August Slowdown Yet.(Basell N.V. $615 million deal)(Sirius Satellite Radio Inc. $500 million deal)(Domtar Inc. $400 million deal)
August 8, 2005... With US new issue volume in excess of $2 billion last week, market timing proved hospitable to many companies clamoring to issue high yield debt. This was despite the month of August normally being known as a slow month for the primary market....

European Company News: Basell Deal Sneaks In Before The Fall Rush.(Basell N.V. bond deal)
August 8, 2005... With dust collecting on the desks of several European high yield investors who have departed for summer holiday, the timing for Basell N.V.'s approximately 998.5 million bond deal may have, at first, appeared anomalous. The Dutch plastics...

Derivatives: Policy Group Cautions Derivatives Market.
August 8, 2005... The rapid expansion of the credit derivatives market, the increasing involvement of hedge funds in it and the more widespread use of complex, illiquid products prompted a collection of senior Wall Street executives to take a fresh look at the...

Europe: LBOs Dominate Europe's HY Forward Calendar.(leveraged buyouts)(high yield market)
August 8, 2005... September's European high yield forward calendar is certainly indicative of the leveraged buyout (LBO)-centric nature of financings in the market this year, said Rachel Hardee, head of European leveraged finance for Fitch Ratings. Excluding...

US Company News: Delta Or Northwest May Be Next In Ch. 11.(Delta Air Lines Inc., Northwest Airlines Corp.)(Column)
August 8, 2005... With UAL Corp., parent company of United Airlines, talking about an exit from Chapter 11 protection for early next year, market players are wondering if a fellow legacy airline will fill UAL's potential vacancy. With both Delta Air Lines,...

Sector Analysis: Movie Theaters Face Pressure From DVDs, But Outlook Is Stable.
August 8, 2005... It looks like consumers need to start heading to the movie box office more often. Otherwise, the movie theater sector may continue to face negative financial pressure, as competition from the DVD market does not appear to be letting up. With...

Clarification.(Correction Notice)
August 8, 2005... In HYR's 8/1/05 weekly trading synopsis, "Gainers & Losers: GMAC/Delta," it was stated that General Motors Acceptance Corp. (GMAC) is reportedly in the process of selling its residential mortgage business (ResCap). On the contrary, GMAC has...

Gainers & Losers: Hanger Orthopedic/ Remy International.(General Motors Acceptance Corp.)(Brief Article)
August 8, 2005... General Motors Acceptance Corp. (GMAC) was one of the top gainers last week, still in large part on the back of news of their sale of up to $55 billion in loans to Bank of America. GMAC's biggest gainers last week were its 6.5% notes due 2013,...

Market Buzz.(Fitch Inc. new appointments)(Moody's Investor Service developed Performance Data Services tool)(Wells Fargo Securities L.L.C. discontinued its equity brokerage services)
August 8, 2005... Fitch Ratings announced two new appointments last week to its high yield group within its corporates team. Lisa Matalon joins Fitch as a senior director with over 20 years of experience in the capital markets and financial services industry....

AMG Data Services.(high yield fund markets)(Brief Article)
August 8, 2005... According to AMG Data Services, high yield funds reported $2.92 million in outflows for the week ended last Wednesday. It marks the fourth consecutive week of high yield outflows. (c) 2005 High Yield Report and SourceMedia, Inc. All Rights...

Deal Profile: Cardtronics Completes HY Deal In Lieu Of IPO.
August 15, 2005... Cardtronics, Inc. successfully tapped the speculative grade bond market earlier this month in a market capitalization originally slated to come in the form of an initial public offering (IPO). The $200 million debt offering from the leading...

Secondary Trading: Expensive Secondary Market Fosters More Primary Demand.
August 15, 2005... High yield bonds are moving up in the world - that is, in the world of secondary trading. Some 52% of all US high yield bonds priced as of last Wednesday were trading above par. And excluding the struggling and proportionally huge amount of...

Market View: Too Much Transparency Hurts Dealers' Business.
August 15, 2005... Every morning, the debt markets trading desk at William Blair & Co. runs a search to see what bids and offers other bond dealers have in the market, a data run that typically produced about 100 pages of deals. In the past year, the average has...

Sector Analysis: Wireless Towers: Thriving After Telecom Downturn.
August 15, 2005... After years with astronomical leverage levels and ratings at the lower end of the speculative grade scale, wireless tower companies across the board are looking up, as they are reaping the benefits of currently predictable cash flows and...

League Tables: Bear Stearns Leads LW's Performance Rankings.
August 15, 2005... Bear Stearns turned out on top for high yield research publication Leverage World's 12-month performance-based league tables, which were announced on August 5. Bear Stearns delivered the best average post-issuance price performance to...

US Company News: Packaging Cos Still Face Pricing Strains.
August 15, 2005... As exemplified by Anchor Glass Container Corp.'s fall into bankruptcy last week, times have not been easy for the global packaging sector. Raw material pricing pressures in the US and Europe, and limited year-over-year volume growth are central...

Market Buzz.(bond ratings)
August 15, 2005... The global speculative grade default rate remained at an eight-year low of about 1.8% percent for July, Moody's Investors Service reported earlier this month. This is down from 2.4% in January and from 3.1% a year ago - a decline of 44%. During...

Gainers & Losers: Reddy Ice/Delta.
August 15, 2005... Topping the gainers list last week were the bonds from the former Triton PCS Inc., now rebranded and operating under the SunCom Wireless Holdings, Inc. name. SunCom absorbed AT&T Wireless operations in North Carolina and Puerto Rico earlier...

AMG Data Services.(mutual funds)(Brief Article)
August 15, 2005... Outflows continued last week, as $475.2 million in outflows from high yield mutual funds were reported as of last Wednesday, according to AMG Data Services. This is the fifth consecutive week of high yield fund outflows. (c) 2005 High...

US Company News: Maytag's Bidding War Continues.
August 22, 2005... The ping pong game continued last week in the Maytag Corp. bidding war between the Ripplewood Holdings-led investor group Triton Acquisition Holding, and its challenger, Whirlpool Corp., which upped the ante last week with a $21 per share bid...

Regulation - The Energy Policy Act: Blessing Or Bane?
August 22, 2005... The Energy Policy Act signed into law by President George W. Bush earlier this month appears on the surface to be essentially a gift bag full of tax incentives for the power industry, but some observers note that in the long term, the new...

Market View: Assets Sales Not Always Good News For Lenders.
August 22, 2005... For many companies, squeezing up to the last dollar out of their assets is imperative. That's because it is often debt issuers in the distressed camp who opt to turn assets into cash via auctioning them off to the highest bidder. Recent asset...

Syndicated Loans/Bankruptcy: Owens Reversal May Set Bar For Future Ch. 11 Rulings.
August 22, 2005... Players in the syndicated loan market breathed a collective sigh of relief last week after the Third Circuit Court of Appeals unanimously reversed a ruling that would have allowed substantive consolidation in the Owens Corning bankruptcy...

CDOs: HY CBOs Revive As Cos Refinance Debt.
August 22, 2005... Corporations in record numbers continue to exercise call options on their unsecured debt obligations in order to lock in low rates while the window to favorably refinance still exists. The result: high yield collateralized bond obligations...

Private Equity: Survey Says: Increases In PE Fundraising Less Likely.
August 22, 2005... In their corner of the alternative investment world, private equity players are maintaining an outlook of tempered optimism with regard to the next 12 to15 months. While many expect to see an increase in fundraising as well as in capital...

Gainers & Losers: Mirage/Delta.
August 22, 2005... One of last week's biggest gainers was Mirage Resorts, Incorporated, which reported solid earnings for this past quarter. The company's net was up 60% for the quarter and revenues were up 11%. Mirage's 7.25% bonds due 2017 traded up seven...

Market Buzz: BMA Backs NYSE Proposal, But Warns Of Conflict Of Interest.(Bond Market Association )
August 22, 2005... The Bond Market Association (BMA) reported last week that it has expressed support in a letter filed with the Securities and Exchange Commission for the New York Stock Exchange's (NYSE) proposal to allow members to trade unlisted debt...

Summer Publishing Break.
August 22, 2005... High Yield Report will be on publishing break through the remainder of August into the beginning of September, and there will be no HYR publications for the dates of August 29 and September 5. Expect the next issue of HYR on September 12. ...

AMG Data Services.(Brief Article)
August 22, 2005... High yield funds experienced $196.8 million in outflows for the week ended last Wednesday, according to AMG Data Services. The sixth straight week of outflows was characterized by 233 funds reporting outflows and 139 funds reporting inflows....