CAM High Yield Weekly Insights

Fund Flows & Issuance:  According to a Wells Fargo report, flows week to date were -$0.2 billion and year to date flows stand at $48.7 billion.  New issuance for the week was $4.5 billion and year to date issuance is at $402.0 billion.

(Bloomberg)  High Yield Market Highlights

• U.S. junk bond yields breached record lows for the second time this year Thursday and could go even lower with credit risk falling, and stock futures and oil prices rising.
• The average yield for the Bloomberg Barclays U.S. corporate high yield index plummeted to 4.45%, sinking below the previous record of 4.56% set on Nov. 9. That had pierced a low not seen since June 2014
• High-yield funds reported a small outflow for the week, reversing the prior week’s inflow
• Three borrowers priced four tranches for $1.7b on Thursday. That included a deal from AssuredPartners with ratings in the CCC tier that offered one of the lowest yields on record, according to data compiled by Bloomberg
• The insurance broker priced $550m of 8NC3 notes at 5.625%, the lower end of talk. LifePoint Health Inc. sold $500m notes in the CCC tier at 5.375% earlier this week
• IPL Plastics, owned by Madison Dearborn Partners, priced a $125m PIK toggle with a 9% cash coupon at 99 cents on the dollar, in line with talk. That also had CCC band ratings
• Seagate Technology, which is rated Ba1/BB+, priced $500m 8.6NC3 notes at 3.125% and $500m 10.6NC5 at 3.375%. Both tranches priced at the tight end of talk, and proceeds will buy back stock
• CCCs are set to outperform BBs and single Bs for the fifth consecutive week with gains of 0.99% so far, the data show
• CCC yields fell to 7.61% Thursday, and are about 200bps lower over the month

(Bloomberg)  Biden Fills Yellen-Led Economy Team

• President-elect Joe Biden rolled out the first set of nominations for his economic team on Monday, formally announcing his selection of Janet Yellen to be Treasury secretary, Neera Tanden to lead the Office of Management and Budget and Cecilia Rouse to head the Council of Economic Advisers.
• Biden also announced his intent to nominate Adewale Adeyemo, a former senior adviser at BlackRock Inc., to be deputy Treasury secretary. Adeyemo is a Nigerian-born attorney and president of the Obama Foundation.
• “As we get to work to control the virus, this is the team that will deliver immediate economic relief for the American people during this economic crisis and help us build our economy back better than ever,” Biden said in a statement.
• If confirmed, the nominations of Yellen, Tanden and Rouse would be the first time the top three Senate-confirmed economic positions went to women. Tanden’s nomination already appeared to be in trouble with Senate Republican aides expressing opposition on Sunday even before it was formally announced.
• Biden has also tapped two economic advisers from his presidential campaign, Jared Bernstein and Heather Boushey, to be members of the CEA.
• Biden did not announce his pick for a key White House economic post, director of the National Economic Council. But Brian Deese, another BlackRock executive who served in the Obama administration, is likely to be offered the job, people familiar with the matter said.
• The choices show Biden turning to experienced Washington hands as he begins building his economic team, with an eye toward racial and gender diversity.