Chinese market optimism fuels HY rally; Uber trades up on delivery of Postmates; Mylan pops on regulatory approval for Covid drug — Mid-Day Commentary

The high yield market popped Monday morning after an editorial from China’s state-run media outlet, China Securities Journal, stoked investor optimism by encouraging China to prioritize fostering a “healthy” bull market, according to a sellsider and trader.

The Dow Industrial Average jumped nearly 450 points this morning before settling at a 1.41% or 364 point increase on the day. The Shanghai Composite recorded its best day in five years, closing up 5.7%.

Even the news of record highs for new coronavirus cases over the US holiday weekend didn’t deter investors this morning. Texas reported a whopping 3,449 new cases on Sunday, up 1.8% from the day before, while California reported 5,410 new cases for a 2.1% increase.

Bellwether energy issuer Occidental Petroleum’s notes rose in tandem with the market, as its USD 737m 6.2% senior unsecured notes due 2040 traded at 87.5 to yield 7.416%, compared to trades at 83.75 to yield 7.83% on 30 June, according to MarketAxess. The USD 1bn 8.875% senior unsecured notes due 2030 also got a boost to 104.78 to yield 8.143% from trades at 102.5 to yield 8.486% on 2 July.

The company’s stock traded at USD 18.16 per share, up 2.11% from Thursday’s close, and a market cap of USD 16.644bn.

Southwestern Energy‘s USD 1bn 6.2% senior unsecured notes due 2025 last traded at 88 to yield 9.781% today, up from trades at 85.625 to yield 10.492% on 30 June, according to MarketAxess. 

Cashing in on the positive market sentiment, Uber’s stock and bonds popped as the company announced a USD 2.65bn all-stock transaction to buy food delivery rival Postmates

After Uber’s bid for Grubhub fell apart, the company pivoted toward another rival as a means to consolidate the food delivery space. The deal is expected to close in early 2021.

Uber’s USD 1bn 7.5% senior unsecured notes due 2025 nudged up to 102.5 to yield 6.748% today from trades at 102 to yield 6.897% on Thursday (2 July), according to MarketAxess. Its stock rose by 5.26% to USD 32.29 per share and a market cap of USD 55.9bn.

Mylan debt and equity popped on the news that it had received regulatory approval to use the generic version of Gilead Sciences’ Covid-19 antiviral remdesivir in India for restricted emergency use, according to a buysider. The company priced 100mg vials of the drug at roughly USD 64.00 for the Indian market. 

Its USD 2.25bn 3.95% notes due 2026 inched up to 112.828 for a 1.582% yield compared to 111.927 on 30 June and its stock climbed 2.82% from the previous close to USD 16.38 with a market cap of roughly USD 8.5bn. 

Charter Communications’ debt traded up this morning as the company announced its plans to offer senior unsecured notes due 2031 and use net proceeds to repay debt, potentially buy back stock and fund general corporate purposes.  

Its USD 1.25bn 5.125% senior secured notes due 2049 jumped three points to 120.079 for a 3.945% yield compared to 116.004 on 26 June. Meanwhile its USD 1.6bn 2.9% senior secured notes due 2031 softened to 102.528 after initially climbing to 103.068 this morning from 102.743 on 2 July. 

The stock is up 1.4% to USD 525.15 per share from its previous close for a market cap of USD 108.4bn.

Broadcom’s notes strengthened this morning after the software solutions company announced an exchange offer for 13 tranches of its senior notes. Terms of the new notes are expected to remain the same, except the new notes will not contain certain transfer restrictions and registrations rights. The exchange offer expires 31 July. 

The USD 2.25bn 4.7% notes due 2025 targeted in the exchange traded up to 114.049 this morning yielding 1.581% compared to 113.205 on 2 July and its USD 2.25bn 5% notes due 2030 traded at 116.852 this morning compared to 115.806 on 1 July, according to MarketAxess.  

Meanwhile, the non-targeted USD 4.7bn 3.875% notes due 2027 traded at 109.173 compared to 108.136 last week. Its stock is up 1.2% from the previous close, trading at USD 319.4 for a market cap of USD 128.5bn.

2020 Debtwire

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