High-yield bond issuance totaled $35.5 billion in May, surpassing initial estimates of $25-30 billion, but representing a small $1.8 billion decline month-over-month and falling short of the $37 billion total from May 2014 and $43.5 billion total from May 2013, according to S&P Capital IQ/LCD.
Large deals anchoring May volume included a $2.1 billion M&A transaction from The Chemours Company, a $2 billion, two-part M&A deal for CommScope,Altice/Suddenlink’s $1.72 billion three-part issue, and Spectrum Brands’ $1 billion issue. Billion-dollar-plus refinancing deals were placed by Burger King, HCA, Ally Financial , Energy Transfer Equity, MarkWest Energy, and SandRidge Energy.
Energy issuers came out of the woodwork to post 25% of total issuance, with companies bringing both short-dated secured offerings and longer-dated senior notes, and demand was strong. To be sure, market participants are diving back into the sector as it outperforms the broad index, marking a turnaround from the end of last year.
According to S&P, the energy sector has returned 6.23% in 2015 through the end of May, versus 4.08% for the U.S. issued high-yield index.
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