High Yield Report articles from March 2003

High Yield Report archives from March 2003

Sprint's Investment Grade Rating Faces the Acid Test: Should it Aid a Bankrupt Affiliate, or Simply Watch the Revenue Evaporate?
March 3, 2003... All the determination in the world may not enable Sprint Corp. to hang on to its cherished investment grade ratings. Desperate to appease the rating agencies and keep the money rolling in, the telecom operator declined to bail out one of...

Allegheny Safe... But Only For Now.
March 3, 2003... Allegheny Energy was one of three energy companies to avoid financial disaster last week with a little help from its creditors, but analysts say the company could still face further hurdles in the future if it isn't careful. El Paso,...

Standish: HY Will Buck Down Trend in 03.(Standish Mellon Asset Management)(high yield mutual funds )
March 3, 2003... It has been a great year so far for the US high yield market. Healthy investor appetite has been assuaged by a constant supply of decent new issues, and this has helped the market to recover from last year's record lows. As a result of the...

DirecTV Lights up Screens, While Ahold Falls From Grace.
March 3, 2003... US DirecTV Scores a Hit Last week's most popular deal was the highly anticipated $1.4 billion 144A bond from DirecTV, part of a total $3 billion financing package that also includes an $800 million term loan B, and $250 million...

Ahold Crashes into High Yield, but Players are on Their Guard.
March 3, 2003... US While the US high yield market was quiet again last week, it is still having a better run than the equity markets, high yield sources said. Case in point: from the end of January, the high yield market is up 62 basis points, one...

Oh No!! More Bad Loans, and this Time it's not in the US; A European Enron-esque Scandal Could Burn Already Seared Banks.
March 3, 2003... Dutch supermarket retailer Royal Ahold NV, likely to be Europe's first accounting scandal casualty, could tar several US and European banks if it continues its descent into speculative-grade status. Ahold's plight is similar to notable US...

Cold Winter Sets Refining Sector Up For Strong Summer.
March 10, 2003... The severe weather this winter in the Northeast is not bad news for everyone. The extra chill has called for more heating oil, and extremely tight inventories have set the stage for high yield refineries to enjoy strong margins during the...

Flamers Taint Fallen Angel Default Risk.
March 10, 2003... First, the good news: the European high yield default rate, which topped out at an unprecedented 25.1% in 2002, according to Fitch Ratings, is likely to trend back down to the single digits again this year. But investors need to be on...

Possible War may Drag Loan Market: Loan Pros Compare 1991 Gulf War Effects to Potential Confilct.
March 10, 2003... A war with Iraq inevitably will slow down syndicated loan issuance as well as secondary market and other loan-related activity, according to longtime lending veterans, but improved commercial loan liquidity and better informed market...

Structural Subordination Gains Ground in Europe with Barry Callebaut Deal; US Market Still Busy With New Issues.
March 10, 2003... US Fairpoint Communications Has No Trouble Fairpoint Communications easily priced a B3/B-rated, $225 million offering of 11.875% notes at par via Credit Suisse First Boston and Salomon Smith Barney. The ILEC (rural phone company),...

Ahold Bonds Move Up After New Credit Facility.(Royal Ahold)
March 10, 2003... US The US secondary market finally started to get a little toppy last week along with equities, after a pretty strong couple of months, traders said. Investor focus has been on the busy new issue market, they said. One of Advantage...

In Tight Credit Environment, Merchant Power Struggles; Underlying Industry Fundamentals as Proposed by FERC Reforms are Necessary.
March 10, 2003... The merchant energy industry is hanging on by a thread. Billions of dollars of investment in unregulated generation and energy trading have fared poorly, while depressed power prices, a weak economy, trading losses, surplus generation and...

Grohe's in Uncharted Waters with Leverage Recap Proposal.(leveraged recapitalization)
March 17, 2003... Subordination reared its ugly head again in Europe last week, but this time the issue came with a twist, as Grohe, the German bathroom and kitchen fittings manufacturer, announced its plans to launch a leveraged recapitalization through...

Evergreen Raises Largest HY Fund.(Evergreen Investments' high yield fund Evergreen Income Advantage Fund)
March 17, 2003... Investors have been badly scarred by corporate accounting scandals and a war is about to break out, but even retail players are hungry for yield, and are prepared to grab it wherever they can find it. With the equity market in shambles and...

Fitch Ratings: How Risky are Derivatives?(credit derivatives market survey)
March 17, 2003... The heretofore opaque credit derivatives market took on crisper form last week when Fitch Ratings released a survey illuminating details about the buyers and sellers of credit protection. But the challenges the rating agency faced in collecting...

Trump Catches the Eye, Barry Offers a Better Deal in Europe.(Trump Hotel Casino offers mortgage notes; Barry Callebaut high yield bond)(industry briefs)
March 17, 2003... US Trump Deal Will Sail...but Only Because of Current Market The one deal on all radar screens last week was Trump Hotel Casino's B3/B- rated, $425 million offering of seven-year, non-call four first mortgage notes. Gross proceeds are...

Ford Falls in US, Corus, Alstom Tank in Europe.
March 17, 2003... US The US secondary market was relatively quiet for the most part last week, but a little better bid later in the week, traders said. "People are digesting new issuance and there's uncertainty on the geopolitical front," a strategist...

Decoupling Pushes Investors into High Yield From Equity.
March 24, 2003... It is no secret that the high yield market has been the star performer of 2003. Even Warren Buffett has publicly gushed over its virtues, while trouncing other financial instruments like credit derivatives and equities. What's most...

Jefferies Gets Positive Nod from Moody's.
March 24, 2003... It's not easy competing with bulge-bracket investment firms, especially for smaller companies like Jefferies & Co. But despite the obvious disadvantages of being a smaller player in an environment where many firms have seen sharp contractions...

Boutiques Pick Up Out-of-Work HY Talent.
March 24, 2003... Who says high yield's only for the big guys? Over the past few months, a growing number of boutique firms have been vying to get a piece of the high yield market, thereby challenging the bulge bracket's oft-repeated claim that junk is only...

Despite War, Both Markets Continue to Keep Busy.(US, European briefs)
March 24, 2003... US The start of the war on Iraq didn't get the US primary market down last week. Deals, deals and yet more deals were expected to price, with seven pricing by press time. Dole Foods is Lip Smackin' Good Fresh producer and...

El Paso to Pay Up, Bond Prices Rise.(US, European briefs)
March 24, 2003... US The US secondary market was pretty picked over last week, with so much money still pouring into high yield mutual funds and portfolio managers needing to put it to work, traders said. But volume was relatively low as many market...

Have Assets, Will Borrow: ABL Loans Go Mainstream.(asset-based loans)
March 24, 2003... Floundering wholesale food distributor Fleming Companies Inc. will follow the likes of bankrupt Kmart Corp. and Spiegel Inc. into the asset-based loans (ABL) market, a sector that is becoming the last, best hope for troubled companies. ...

HealthSouth Has its Own Rocky Horror Picture Show.
March 31, 2003... At the stroke of midnight on Mar. 20, a new version of the cult flick "The Rocky Horror Picture Show" unfolded. But instead of the usual colorful crowd who typically attend screenings, the audience this time was made up of high yield bond...

Convert Market Appeals to HY Issuers.
March 31, 2003... The convertible bond market has long been used as an alternative source of funding for those sub investment grade issuers unable to access the straight high yield bond market. But the convertible market has been so attractive of late, that even...

CDO Pros Rally Around The Asset Class.
March 31, 2003... After a 12-hour day spent funneling through pricing data, monitoring underlying collateral and butting heads with harried investors, a collection of CDO underwriters recently gathered in a conference room overlooking New York's Madison Avenue....

US and Europe: Where Are the Deals?
March 31, 2003... The US and European primary market were both silent last week: only one deal was expected to price in the US and none were in the cards in Europe. US Despite Retail Weakness, Dan River Fares Well Dan River Inc., a designer,...

FERC Ruling Impacts US Energy Cos.; Chemicals Rise in Europe.(meshed briefs)
March 31, 2003... US The US high yield market was quiet last Thursday, as it had been through most of the week. "In the last two days, there's been more buyers than sellers, but unfortunately if there are no sellers, buyers can't buy up," one trader...

High Yield Bonds are the Asset of Choice Today.
March 31, 2003... You know that junk is the flavor of the month when a highly leveraged fruit-packaging firm can price a cartload of bonds to yield less than 9% and have them fly off the shelves. Such was the case when B2/B+ rated Dole Food Co. issued $475...