High Yield Report articles from May 2005

High Yield Report archives from May 2005

Market View: Event Risk Concerns Escalate.
May 2, 2005... As private equity players raise bigger and bigger slugs of money - witness the record-size funds announced recently by Goldman Sachs and The Carlyle Group - "event risk" is increasingly being talked about among credit investors, particularly...

Funds: Are HY Bear Funds On The Horizon?
May 2, 2005... In the gargantuan universe of mutual funds, "bear funds" - also known as "inverse funds" or "short funds" - are not common. That's because many market players find it difficult to employ a short-only or net-short strategy at all times,...

Regulation: Fewer Companies Find 404 Control Problems.
May 2, 2005... Section 404 of the Sarbanes-Oxley Act has taken a very public beating in recent weeks. The 2002 legislation, which requires companies and their auditors to attest to the effectiveness of the companies' internal financial controls, was roundly...

US Company News: Calpine's Bonds, Loans Tumble In Secondary.(Company Profile)
May 2, 2005... Apparently, no news is bad news for Calpine Corp. Despite the company's recent efforts to quash rumors that it was going to file for bankruptcy, its bond and bank debt continued to tumble in secondary trading last week. A number of its...

Credit: Trends Signal More Distressed Ahead.(Brief Article)
May 2, 2005... Over the last three years, there has been a migration of credits to the subinvestment grade space, a shift that some players in the high yield market are cautioning could cause higher default pressure when the next cycle hits. "When you...

Loan Market Profile: NewStar Increases Lending Capacity To Middle Market With Notes Deal.(NewStar Financial)(Company Profile)
May 2, 2005... NewStar Financial, a Boston-based commercial finance firm, announced last week that it has completed a $50 million offering of long-term senior secured notes. The debt issue increases the company's lending capacity to $2 billion and is...

Gainers & Losers: GMAC/Delta.(Brief Article)
May 2, 2005... General Motors Acceptance Corp. (GMAC) dominated the gainers chart last week, as a number of the company's bonds traded up, including its 7% notes due 2018, which rose by 9.25 points to trade at 77.375, and its 7.25% notes due 2017, which...

Market Buzz.(briefs)
May 2, 2005... Jeremy Hughes, formerly a trader with Allstate, started work at ABN Amro Asset Management in Chicago last week. Hughes, a senior high yield trader, is the first high yield trader on ABN Amro's team, said Todd Youngberg, global head of high...

Convertibles: Converts Are On The Skids.
May 9, 2005... Despite newfangled structures designed to protect convertibles holders in the wake of a takeover, the current boom in M&A remains a major reason the convertibles market is on the skids. Convertible arbitrage hedge funds - the sector's...

European Company News: Euro HY Sees Resistance, But Still In Good Shape.(high yield)
May 9, 2005... The European high yield market has had a good run in recent months, but the winds of change have been blowing through the market just as it has in the US, and investors - who earlier had followed their lust for paper, and virtually gobbled...

Restructuring: Bankruptcy Reform Opens Door For Wall Street.
May 9, 2005... With the bankruptcy reform bill signed into law, Wall Street investment banks can finally advise bankruptcy-bound clients whose securities they have underwritten - a business previously prohibited due to conflicts of interest. The real coup for...

Syndicated Loans: Hedge Funds Flee Second Liens, Look To HY.
May 9, 2005... Hedge funds are notorious for their rapid entries and exits into and out of asset classes. And even though syndicated loan professionals say they do not have a firm grasp as to the extent of hedge fund involvement in their market, many say that...

US Company News: S&P Announces GM, Ford Double Whammy.(securities ratings of General Motors Corp., Ford Motor Co. by Standard & Poor's )
May 9, 2005... Standard & Poor's decided to hit the market with a double whammy last Thursday, after it dropped the ratings of both auto makers General Motors Corp. (GM) and Ford Motor Company to junk status. The ratings of GM, General Motors Acceptance...

Profile: Merriman Taps Roden To Head New Leveraged Finance Business.
May 9, 2005... Joining the growing list of boutique investment firms and banks that have opened their doors to lending opportunities in the subinvestment grade middle market, San Francisco-based investment bank and broker dealer Merriman Curhan Ford & Co. has...

Gainers & Losers: Penn Traffic/GM.
May 9, 2005... The Penn Traffic Company secured a spot at the top of the gainer's chart last week as GE Commercial Finance Corporate Lending announced that it provided the Syracuse, N.Y.-based supermarket operator with a $164 million credit facility to help...

Market Buzz/news.
May 9, 2005... The global corporate speculative grade bond default rate inched up to 1.64% at the end of April from its eight-year low of 1.47% in March, according to Standard & Poor's. Despite the uptick, the global speculative grade default rate has...

Private Equity: LBO Deals Continue To Attract Buyers.(leveraged buyouts)
May 16, 2005... Given the dismal reception of debt-laden, private-equity backed initial public offerings (IPOs) in recent weeks and the absence of any high yield dividend recapitalizations since April 1, logical observers might wonder whether private equity...

Market View: GM, Ford: Oddballs Of The Indices.
May 16, 2005... Standard & Poor's' downgrade of General Motors Corp. (GM) and Ford Motor Company to junk status, sending billions of dollars of outstanding bond issues into a ratings no-man's-land, is likely to cause many high yield investors to reconsider...

Europe: Europe Continues To Digest Auto Downgrades.
May 16, 2005... Although the European high yield debt market took a few days to digest the impact of Standard & Poor's' downgrade to junk of Ford Motor Company and General Motors Corp. (GM) - not least because it was announced on the Ascension Day holiday -...

Market View: GM's, Ford's Troubles Could Affect Mexican Auto Cos.
May 16, 2005... Mexico-based auto companies could be affected by the fallout of Standard & Poor's downgrade earlier this month of General Motors Corp. (GM) and Ford Motor Company to subinvestment grade status, S&P said in a report released last week, written...

Credit: Canadian Default Rate Stagnant In 2004.
May 16, 2005... The default rate for speculative grade-rated Canadian issuers landed at 1.8% for 2004, according to Moody's Investors Service. This is unchanged from 2003's 1.8% default rate. Meanwhile, the default rate for all Canadian issuers was also...

Strategy: Floating-Rate Notes Gain Wider Acceptance In Junk Market.
May 16, 2005... Floating-rate notes are well established in the investment grade world, and in a low rate environment such as today's, they can account for more than half of all new corporate issuance. Now, despite the woes of the high yield universe (US...

US Company news: Delta Bonds Experience Wild Ride After Chapter 11 Talk.(Delta Air Lines Inc.)
May 16, 2005... Delta Air Lines, Inc.'s bonds hit some turbulence in the secondary market last week in light of a disclosure by the company that a Chapter 11 filing could be imminent unless the company receives an amendment from its senior lenders. Citing...

Gainers & Losers: Knology/C&A.(Collins and Aikman Corp.)(Brief Article)
May 16, 2005... Knology, Inc.'s bonds had a strong week after the broadband services provider reported a record $55 million in earnings for the first quarter 2005 and nearly a 13% increase in the company's adjusted EBITDA compared with the same period last...

Market Buzz.
May 16, 2005... Toronto-based BMO Investments Inc., a member of BMO Financial Group, announced last week that it has revised the investment strategy for its BMO Bond Fund and its BMO International Bond Fund. In order to provide more investment flexibility, the...

US Company News: Crown Castle Securitizes To Repay HY Debt.(Crown Castle International Corp., hifg yield)
May 23, 2005... Crown Castle International is prepping a $1.9 billion private placement backed by cellular tower lease receivables via Morgan Stanley, the proceeds of which will be used to fund a tender offer for $1.4 billion in outstanding high yield debt,...

Emerging Markets: Emerging Markets Debt: A Good Hedge Against HY.(high yield bonds)
May 23, 2005... Emerging markets debt is an asset class that has had its fair share of troubles through the past two decades, but even though investors usually shun it quicker than any other asset class, this time around, many are stopping to consider it as an...

Sector: Wall Street Plays Odds In Gaming Sector.
May 23, 2005... Wall Street is going out of its way to give gaming companies, even lower-rated ones, any type of financing they request, but the only item on the gaming industry's want list right now are cheap syndicated loans. Bankers are craving a...

Mezzanine: Are Some Euro 2nd Liens Really Mezz In Disguise?
May 23, 2005... Over the past 18 months, European issuers have increasingly opted for second lien loans, with such issuance totaling some 2.3 billion during this time frame, according to a recent report by Fitch Ratings. But with second liens oftentimes...

Profile.(Commonwealth Advisors)(Company Profile)
May 23, 2005... Even if high yield debt has lost its appeal for certain classes of investors, there are others who have been rubbing their hands with glee at its fall, waiting to cash in on credits as they tank. And for distressed debt investors like Walter...

Gainers and Losers: GMAC/C&A.(stock performance of General Motors Acceptance Corp., Delta Air Lines Inc., Collins and Aikman Corp.)(Brief Article)
May 23, 2005... The outstanding bonds of General Motors Acceptance Corp. (GMAC) were surprisingly among the better performers in the high yield bond market last week, on the news that General Motors Corp. (GM) had scored high in J.D. Powers and Associates'...

Market Buzz/News: Moody's To Cease Assigning Issuer Ratings.(Moody's Investor Service, Banc of America Securities L.L.C. appoints Manish Somaiya, Jefferies Group Inc. acquires Helix Associates Ltd.)
May 23, 2005... On May 13, Moody's Investors Service announced that it no longer plans to assign issuer ratings, which have been assigned to speculative grade issuers since 1999, and that it plans to withdraw existing issuer ratings starting in mid-to-late...

Defaults: 2005: Key Year For Default Rates.
May 30, 2005... Stronger economic conditions, robust corporate profits, a focus on balance sheet management as well as continued low interest rates are the factors that helped credit conditions improve significantly in 2004 and allowed corporate America to...

Market View: Bowing Out: Pulled HY Deals Multiply.
May 30, 2005... The high yield bond market has recently become inhospitable terrain for some lower-rated issuers, as a growing number of prospective sellers are postponing or canceling their deals, and bankers wonder if this barren season will prove to be a...

Funds: No Signs Of Abatement For HY Fund Outflows.
May 30, 2005... High yield corporate bond funds have seen their assets diminish at a steady clip for the past three months, as outflows continued for the 15th straight week last week. (For the week ended May 25, high yield funds saw $226 million of outflows,...

European Loans: Recovery Prospects Vary For Euro Senior Debt.
May 30, 2005... Not all European senior secured debt deals are created equal, and they may not necessarily deliver a full recovery on a creditor's investment, according to a recent report by Standard & Poor's. That's because, due in part to differences in...

Distressed Debt: Distressed Could Rise As New Issuance Decreases.
May 30, 2005... After months of hearing market player predictions that the business for distressed debt is set to pick up, it looks like such a prophecy could finally be coming into fruition. That's because a major indicator of increased distressed business is...

CDOs: Hedge Funds Take Advantage Of Distressed CDO Buying Opportunities.(Collateralized debt obligations)
May 30, 2005... The recent hedge fund-driven chaos in the synthetic collateralized debt obligations (CDOs) market has created a buying opportunity for other hedge funds focused on distressed assets. "The tranche market has firmed up; buyers have come back...

Gainers & Losers: Visteon/Salton.(Calpine Corp., stock markets)(Brief Article)
May 30, 2005... Visteon Corp.'s bonds were on the gainers list last week, as they benefited from Ford Motor Company's decision to bring the automotive supplier back into the fold and recapitalize them. Ford will have to pay up to $1.8 billion for the recapture...

Market Buzz: Grenier To Head Specialty Fixed Income At DeAM.(Deutsche Asset Management Inc. appoints Bart A. Grenier, Royal Bank of Scotland Financial Markets appoints Tom Jenkins, Black Diamond Commercial Finance L.L.C. appoints Stuart A. Armstrong)
May 30, 2005... Bart A. Grenier, formerly of Fidelity Management and Research Company, is joining Deutsche Asset Management (DeAM) in New York as head of specialty fixed income, a newly created position. Grenier, who starts work on June 13, will report to...

Syndicated Loans: GMAC Hits Market For Jumbo Revolver As Fitch Downgrade Emerges.
May 30, 2005... General Motors Acceptance Corp. (GMAC) is in the market via JPMorgan and Bank of America for a $3 billion, 364-day revolver to replace its existing $4.55 billion, 364-day revolver that matures next month, for which price talk is 12.5 basis...

Ratings: Moody's Reviews Methodology For Spec-Grade Liquidity Ratings.
May 30, 2005... Two-and-a-half-years after Moody's Investors Service began issuing its speculative grade liquidity (SGL) ratings to subinvestment grade corporate issuers, the ratings agency is issuing a report reviewing its methodology and explaining how these...

AMG Data Services.(finance)(Brief Article)
May 30, 2005... AMG Data Services reported outflows of $226 million from high yield bond funds for the week ended May 25. The number of high yield funds reporting outflows decreased to 243 funds from 262 funds in the previous week. Meanwhile, the number of...