Secondary debt spreads headed into the second half of 2005 in good shape, although record high oil prices once again put pressure on the market. Despite this, the tightening trend looked set to continue well into the summer, with the primary high-yield calendar well-flagged into July.
Par high-yield names in particular strengthened in cash, with cable paper and other Single B benchmarks leading the way.
Cablecom was well sought after mid-week amid talk of a possible tie-up with FT-owned Orange. Some of the German names proved an interesting buy for investors. Grohe debt, which has suffered over recent weeks, was bid up at 98.
The break of Springer’s B/C/E add-on dominated leveraged loan trading, with demand immediately outstripping supply to push levels to around 101-3/8.
A different theme dominated market gossip, however, as AXA brought a €40m portfolio of loans to the auction block in an unusual move for a fund manager and a possible first for the leveraged market.
Sources put Deutsche Bank’s winning bid at the 101-1/2 mark, which would represent full value for a portfolio that contained a fair amount of refinancing risk, traders said. Rumours circulated that AXA was in the market re-acquiring some of the less risky names, probably for a separate fund.