Secondary split

LBO deals continue to dominate secondary trading, which slowed only briefly in August ahead of the next barrage of transactions currently active in primary syndication.

The mood continues to mirror the primary market, with strong credits buoyed up by healthy demand and weaker or more aggressively structured deals failing to find support.

E.ON Ruhrgas joined the former group on the break, rising to 100.5 on the B/Cs in its first week of trading and topping 101 by the second, by which time supply had effectively dried up.

Ruhrgas joined a series of popular LBO names above 101, including UPC F1s, ATU and Saur. Not far behind, iesy B/Cs have slowly traded up to 100.675, and Debitel and Pirelli are trading around the 100.5 mark.

SEAT Pagine Gialle is also around 100.5, proving it is still a popular portfolio choice despite its reduced yield. NTL and Telewest are holding their value just above par, despite continuing merger talk that would trigger a refinancing on both names.

The generally upbeat tone extends to sub-par names, with once-struggling Eutelsat climbing strongly to reach 99.625/ 99.75 on the Bs. Amadeus has also strengthened, with the pro rata piece trading in a 99.35/99.40 context.

On the downside, Debenhams continues to languish in the mid-97s, with many traders saying that pricing would fall sharply in the absence of the continuing watertight sell-down from leads Citigroup, CSFB, Merrill Lynch and Morgan Stanley. Whether Wind, now closed in primary, will repeat this performance when it breaks in September remains to be seen.