U.S. junk bond sales surface but no flood expected

NEW YORK, June 8 (BestGrowthStock) – BWAY Holding Co and Triumph
Group on Tuesday priced a combined $555 million in junk bonds,
the first of three deals expected in the market this week to
fund mergers and acquisitions, according to IFR.

Junk bond sales have plummeted in recent weeks as investors
spooked by a European debt crisis shied away from risky debt.
May’s $6.7 billion junk bond issuance total marked the slowest
month since March 2009 and just one sale has priced each of the
past two weeks.

Issuance may remain opportunistic for some time, with
companies waiting for stronger market conditions to price, Andy
O’Brien, co-head of syndicated and leveraged finance for
JPMorgan, said on Monday at a Reuters Investment Summit in New
York.

“The European situation is here to stay for several
quarters,” he said. However JPMorgan is still expecting a solid
issuance year overall, he said. Despite a slow-growth
environment, defaults will fall and more investors will look at
high-yield as an attractive asset class, he said. For details
click on [ID:nN0798069].

BWAY (BWY.N: ), a maker of metal and plastic containers, sold
$205 million of notes to help fund Madison Dearborn Partners’
$915 million buyout of the company. Triumph Group (TGI.N: ), a
maker of aircraft components, priced $350 million in bonds to
help finance its acquisition of Vought Aircraft Industries.

On Wednesday, TransUnion LLC is expected to launch a $645
million sale to help pay for Madison Dearborn Partners’
acquisition of a 51 percent stake in the company, according to
IFR, a Thomson Reuters service. TransUnion is one of the
largest U.S. credit information firms, owned by the
Chicago-based Pritzker family.

Junk bonds have weakened for the past three weeks though
losses have slowed from May, when they posted a 3.5 percent
loss.

As a 14-month junk bond rally sputtered last month, seven
junk bond sales were pulled and several companies have deals on
a day-to-day basis awaiting a firmer market. The few deals
being priced are mostly from companies that need financing for
mergers, which cannot wait out the weak market.

Investing Basics

(Reporting by Dena Aubin; Editing by James Dalgleish)

U.S. junk bond sales surface but no flood expected