Tag: weekly insight

Fund Flows & Issuance: According to a Wells Fargo report, flows week to date were $0.4 billion and year to date flows stand at -$7.6 billion. New issuance for the week was $8.0 billion and year to date HY is at $204 billion.

(Oil and Gas Journal) US rig count drops for sixth time in 8 weeks

• Baker Hughes’ overall tally of active rigs in the US edged down a unit to 935, down 23 units since a peak of the drilling rebound on July 28. The count is still up 531 units from a modern-day bottom in Baker Hughes data during the weeks ended May 20-27, 2016.
• US oil-directed rigs dropped by 5 to 744, down 22 units since Aug. 11 and up 428 units since May 27, 2016. That loss was mostly offset by a 4-unit gain in gas-directed rigs to 190, their second-highest total since 2015. The highest occurred on July 28. One rig considered unclassified remains drilling.
• Two onshore rigs went offline, with rigs engaged in horizontal drilling losing 5 units to 790, down 20 units since July 28 and up 476 since May 27, 2016. Rigs drilling directionally increased 3 units to 77.
• The count of rigs drilling in inland waters dropped by 1 to 3. Two rigs started work offshore Louisiana, bringing the overall US offshore count to 19.
• The offshore gain propelled Louisiana to No. 1 among the major oil- and gas-producing states in increases. Up 3 units this week, Louisiana now has 65 rigs working.

(Bloomberg) Home Prices in 20 U.S. Cities Increase More Than Forecast

• Home prices in 20 U.S. cities climbed more than forecast in July, reflecting solid demand against a backdrop of modest listings of properties, figures from S&P CoreLogic Case-Shiller showed Tuesday.
• Buyers are competing for a limited number of for-sale homes, allowing sellers to boost asking prices. Property values are consistently outpacing wage growth, helping explain why the share of first-time buyers of previously owned homes in August was at a one-year low. At the same time, owners’ equity as a share of total real-estate holdings climbed in the second quarter to the highest level in 11 years.
• Home prices may also get a boost in coming months after hurricanes Harvey and Irma reduced housing supply in parts of Texas and Florida. Affordability may remain challenging, as both sales and construction are interrupted by clean-up efforts. At the same time, a strong labor market and low-borrowing costs continue to encourage hopeful homebuyers.
• While home prices continued to advance strongly along the northwest part of the country, values were also picking up in Denver, Dallas and Las Vegas — underscoring a broadening of appreciation throughout the U.S. Las Vegas, one of the hardest-hit cities during the housing collapse, registered the third-largest year-over-year advance in July.
• “While the gains in home prices in recent months have been in the Pacific Northwest, the leadership continues to shift among regions and cities across the country,” David Blitzer, chairman of the S&P index committee, said in a statement. “Rebuilding following hurricanes across Texas, Florida and other parts of the south will lead to further supply pressures.”

(Modern Healthcare) Senate Republicans pull plug for now on repeal bill

• There will be no Senate vote this week on the Graham-Cassidy bill to repeal and replace the Affordable Care Act, Senate GOP leaders announced Tuesday.
• That reportedly was a joint decision by Senate Majority Leader Mitch McConnell and the bill’s two chief sponsors, South Carolina’s Lindsay Graham and Louisiana’s Bill Cassidy. They pulled the bill because they lacked enough votes to pass it.
• “We haven’t given up on changing the healthcare system, we just can’t do it this week,” McConnell said at a news conference with Graham, Cassidy and two of the bill’s other co-sponsors. Senate Republicans now will take up a tax reform bill, with markups next week, he added.
• “I hope Republican leaders will let us get back to work on lowering premiums and stabilizing the marketplace,” Washington Sen. Patty Murray, the senior Democrat on the Senate health committee, said at a news conference Tuesday. “I’m ready to go.”

(Reuters) Seagate to give up to $1.25 billion of $18 billion deal to buy Toshiba chip unit

• Seagate Technology PLC said on it would contribute up to $1.25 billion towards the purchase of Toshiba Corp’s chip unit by a consortium led by Bain Capital LP.
• Toshiba said earlier in the day it had signed an $18 billion deal to sell the unit to the group, overcoming a key – albeit not its last – hurdle as it scrambles for funds to stave off a potential delisting.
• Seagate also said it expects to enter into a long-term supply agreement with the unit, Toshiba Memory Corp.
• Besides Seagate, Bain’s consortium includes Apple Inc , South Korean chipmaker SK Hynix, Dell Inc and Kingston Technology.

Fund Flows & Issuance: According to a Wells Fargo report, flows week to date were -$0.8 billion and year to date flows stand at -$9.0 billion. New issuance for the week was $15.2 billion and year to date HY is at $188 billion.

(Bloomberg) Saudi Arabia Says It’s Open to Another OPEC Cuts Extension

• Saudi Arabian Energy Minister Khalid Al-Falih agreed with his Venezuelan, Kazakh and U.A.E. counterparts to keep all options open in their push to re-balance world oil markets, including the possible extension of output cuts beyond next March.
• Al-Falih agreed in separate talks with the ministers in the Kazakh capital Astana that steps taken by OPEC and other major crude producers such as Kazakhstan have contributed to better market stability, according to three emailed statements from the Saudi energy ministry.
• Saudi Arabia and Venezuela, both members of the Organization of Petroleum Exporting Countries, agreed to consider prolonging production cuts “beyond the first quarter of 2018, if needed,” the Saudi ministry said in one of the statements. The kingdom and Kazakhstan said such an extension “would be considered in due course as market fundamentals may dictate,” according to a separate Saudi statement.
• OPEC and other producers including Russia pledged to reduce output by about 1.8 million barrels a day through March to trim global oil inventories and buttress prices. The producers are seeking to strengthen compliance with the cuts accord they reached last year.

(Broadcasting and Cable) CenturyLink Extends Level 3 Deal Closure Date

• CenturyLink said it expects its deal to buy Level 3 Communications will close by mid-to-late October, which will require approval by the FCC and Justice as well as remaining state sign-offs.
• That is actually a slight delay in the original projected closing, which had been the end of this month. California won’t vote on its state approval until Oct. 12, but CenturyLink pointed out that a California ALJ has deemed the deal in the public interest and recommended the California PUC approve it at that Oct. 12 meeting.
• CenturyLink CEO Glen Post said the company views the “slight delay” as manageable and is ready to begin integrating Level 3 into the fold as soon as the deal is closed.
• He also said that the company wanted to give the regulators time to complete their review. The company will have to, since the deal cannot close until and if the FCC and DOJ approve it, though the company is working with regulators throughout to provide info and input, so the announcement is a good sign the deal will not be blocked.

(Real Deal) Despite rising demand, multifamily construction is slowing down

• Construction of multifamily buildings is slowing down across the country, even though there’s rising demand for rental units.
• More than half of metro areas across the country are expected to see more multifamily housing built this year than what was seen between 1980 and 2016, the Wall Street Journal reported, citing Trulia data. However, that construction — the driver of the last construction boom — is on the cusp of slowing down. If the construction of single-family homes doesn’t increase to fill its place, according to the newspaper, the country’s economy could be adversely affected.
• According to Commerce Department data released on Wednesday, overall U.S. housing starts dropped for the fourth time in five months in July. For single-family construction, starts decreased by 0.5 percent. However, they dropped a massive 17 percent for construction on buildings with five or more units.
• “I’m optimistic that single-family will catch up,” Ralph McLaughlin, the chief economist at Trulia. “It’s not going to happen this year and it’s probably not going to happen next year.”
• Apartment construction is slowing because of the massive increase in apartment inventory. In New York City, excess supply has led to landlords offering concession to renters and brokers. In July, concessions at residential rental buildings in Brooklyn were the highest they have been in the seven years that they’ve been tracked.

(Kansas City Business Journal) AMC completes $130M sale-leaseback deal

• AMC Entertainment Holdings Inc. is making progress with monetizing assets and announced it completed the sale-leaseback of seven U.S theaters. The $130-million deal involves an unnamed U.S. buyer and will lead to about $128 million in cash after closing costs and a deferred gain on sale of about $80 million.
• “AMC’s $130 million sale leaseback transaction is the second action step we have consummated since the announcement last month to realize monies from assets which were not vital for us to own,” AMC CEO Adam Aron said in a release. “Combined with the sale of our 50 percent interest in Open Road Films, which was sold last month with an $18 million pre-tax gain, AMC has generated more than $140 million of cash. This is beneficial in enabling AMC to pursue our plan to strengthen our balance sheet even as we pursue dynamic growth.”
• The announcement is part of AMC’s effort to sell $400 million in assets to strengthen its overall liquidity position and help finance buying back AMC shares and paying down debt.

Fund Flows & Issuance: According to a Wells Fargo report, flows week to date were $1.0 billion and year to date flows stand at -$8.1 billion. New issuance for the week was $1.3 billion and year to date HY is at $173 billion.

(Reuters) Bankers work on US$70bn debt for Altice Charter tie-up

• Bankers are working on debt financings of around US$70bn backing a potential offer by Netherlands-based telecom conglomerate Altice NV and its US cable unit for US cable operator Charter Communications Inc, banking sources said on Wednesday.
• A debt deal would be one of the largest acquisition financing packages to date and one of the largest leveraged acquisition financings, the sources said.
• “Even on a conservative level, the debt backing Altice’s Charter bid would be the largest-ever leveraged financing,” a senior banker said.
• Bankers are unwilling to risk missing out on a deal of this size and are actively pitching financing proposals to Altice to back any potential bid, bankers said.
• “The financing would be sizeable so every big bank is around it in some shape or form – all the guys that have led Altice deals in the past,” a second senior banker said.
• “Any bank with any appetite will be in there pitching. No one wants to miss out on the trade,” a third senior banker said.

(Nashville Post) Moody’s cuts Community Health Systems rating

• A Moody’s Investors Service analyst on Tuesday downgraded the debt rating of Community Health Systems, saying the company is unlikely to lower its high debt ratios over the next year and a half despite selling dozens of its hospitals.
• The debt ratings agency said Franklin-based CHS, along with its hospital company peers, faces “operating headwinds” that will keep its ratio of debt to earnings before interest, taxes, depreciation and amortization around 7:1. Moody’s analysts have cut their group rating for CHS as well as its senior unsecured notes, among other things, but have a stable outlook for the company. They say they’ll consider an upgrade if the company’s debt-to-EBITDA ratio climbs to 6:1.
• CHS executives in May renegotiated their main credit agreement to give them more time to lower the company’s debt ratios. In the past year, they have sold or signed agreements to sell 30 hospitals and last month said more deals are likely coming in 2018.

(Industrial Distribution) U.S. Rig Count Snaps 4-Week Slide, Harvey Drives Oil Back Above $48

• The U.S. combined active oil and gas rig count posted its first increase for the first time in five weeks with a modest gain, while the price of oil jumped essentially $2 from the midpoint of last Friday to Tuesday morning.
• Friday’s count provided by oilfield services provider Baker Hughes (Sept. 1) was up by three, snapping a four-week streak of declines. The count hadn’t increased in six of the previous seven weeks. Friday’s total of 943 was up by 89.7 percent year-over-year
• Oil rigs comprised 80.5 percent of Friday’s total.
• The U.S. oil rig count held steady last week at 759. Its count is up 86.5 percent year-over-year and up 140.2 percent since bottoming out at 316 on May 27, 2016.
• The U.S. added three gas rigs last week, moving its current mark to 183. The active gas rig count is up 108.0 percent year-over-year and up by 125.9 percent since bottoming out at 81 on Aug. 5 and Aug. 26, 2016.

(PR Newswire) Steel Dynamics Announces Offering of Notes

• Steel Dynamics, Inc. announced that it plans to sell approximately $350 million aggregate principal amount of debt securities in a transaction exempt from the registration requirements of the Securities Act of 1933, subject to market and other conditions. The Company intends to use the net proceeds of the offering, along with cash on hand, to purchase any and all of its 6.375% Senior Notes due 2022 that are validly tendered in a tender offer commenced on September 6, 2017, and to redeem, repurchase or satisfy and discharge any 2022 Notes not purchased in the Tender Offer, and to pay related fees and expenses.

Additionally, Steel Dynamics was upgraded by Moody’s to a Ba1 credit rating.

(Bloomberg) Distressed Supply Increases in August, Led by Communications

• Distressed supply increased for the third month in a row, raising the question whether another distressed cycle is upon the credit market. In strong credit markets, distressed inventory tends to decline or meander in a trough. The distressed ratio increased to 6% from 5%, as the communications and energy sectors added distressed supply.
• The face value of bonds in the BofA Merrill Lynch U.S. Distressed Index rose $16 billion to $84 billion in August, the third straight gain. Having fallen to $53 billion in February from a $377 billion peak a year earlier, the question is whether supply is set to reverse and increase.

Fund Flows & Issuance: According to a Wells Fargo report, flows week to date were $0.08 billion and year to date flows stand at -$9.2 billion. New issuance for the week was $0.0 billion and year to date HY is at $172 billion. This past week was very much a typical late summer lull.

(Oil & Gas Journal) US rig count falls 6 units to 940

• The overall US rig count has fallen again this week, marking the fourth straight week of declines. Baker Hughes’ calculation of active US rigs dropped 6 units during the week ended Aug. 25 to 940.
• Rigs drilling for oil fell 4 units to 759 rigs working, while those rigs targeting natural gas also declined 2 units to 180 rigs. Rigs unclassified sat unchanged at 1 unit.
• The US rig count is up 451 rigs from last year’s count of 489, with oil rigs up 353, gas rigs up 99, and unclassified rigs down 1 to 1.
• Among the major oil and gas-producing states, Texas and Pennsylvania were down 3 rigs each to respective counts of 456 and 31. Oklahoma, Utah, and Alaska were down 1 rig each to respective counts of 130, 8, and 4.
• In Canada, the overall rig count climbed 3 units this week to reach 217. Rigs drilling for oil fell 6 units to 115 and those targeting gas gained 9 units to 102. The total count is up 71 units from this time a year ago when 146 rigs were operating.

(Bloomberg) Altice to Buy Back Up to $1.2 Billion in Stock, Will Eye M&A

• Billionaire Patrick Drahi’s Altice NV plans to buy back as much as 1 billion euros ($1.2 billion) of stock during the next 12 months, while continuing to look for potential acquisition targets.
• The telecommunications company will buy A and B shares on the Amsterdam exchange, according to a statement Monday. “Going forward, Altice will continue to assess the use of excess cash for either significantly accretive M&A opportunities or further shareholder returns,” the company said.
• Altice said the buyback reflects its confidence in achieving near-term financial targets, reiterating all its 2017 goals. An acquisition push in the U.S. has helped Drahi diversify Altice beyond a stagnant European telecommunications market, and the company has said its Altice USA unit is seeking to grow further through takeovers after its initial public offering in June.
• The company is working on a potential offer to buy Charter Communications Inc., following other possible suitors including Japan’s SoftBank Group Corp. in targeting the U.S. cable carrier, people familiar with the matter said this month. Altice is also considering other potential acquisitions, one of the people said.

(CNN) U.S. company gives up control of world’s No. 2 copper mine

• Freeport-McMoRan agreed Tuesday to give up its majority stake in the massive Grasberg gold and copper mine, ceding control to the Indonesian government in what is likely to be seen as a victory for President Joko Widodo.
• The U.S. miner’s ownership stake will be reduced from 90% to 49%, Indonesia’s energy minister Ignasius Jonan said at a joint press conference with Freeport CEO Richard Adkerson. The exact time of the handover is under discussion, they said.
• Freeport and its local subsidiary have conducted mining and exploration activities since 1988 at the 525,000-acre complex, which includes a massive open pit mine.
• But many Indonesians objected to their country’s mineral resources being mined by a foreign corporation, and the project has long faced opposition — and even violent protests — from locals in the eastern province of Papua.
• Jonan said Tuesday that the agreement wants to “prioritize the national interest” and the “importance of the people of Papua.” He said that control of the mine would also give Indonesia sovereignty over its natural resources.
• Freeport has agreed to build a new processing and refining facility for the mine, and — if other conditions are met — it will be allowed to operate the project until 2041.

(Bloomberg) Largest U.S. Refiner Shuts as New Harvey Landfall Extends Damage

• Harvey’s second landfall, hitting southwest Louisiana near the Texas border, expanded the growing list of damaged oil refineries, shutting down two key plants, including America’s largest.
• The latest hit list potentially reduces U.S. fuel-making capacity to the lowest since 2008, following Hurricane Ike. Motiva Enterprises LLC’s Port Arthur facility in Texas, the biggest U.S. refinery, is shutting because of severe flooding, said a person with knowledge of the operations. Total SA’s refinery in Port Arthur is out with a power loss, a person familiar with that plant said. Those plants are located less than 50 miles (80 kilometers) from the tropical storm’s 4 a.m. Wednesday landfall just west of Cameron, Louisiana.
• The two refineries join more than a dozen others with a combined ability to produce more than 4 million barrels a day, or about 23 percent of U.S. capacity, that are at least partially offline. Gasoline futures are at the highest in two years, and the fuel’s premium to crude is at a 16-month high.
• “These closures are already impacting markets with crude prices lower on a perceived drop in demand and gasoline prices spiking in response to lower supply,” Sandy Fielden, director of research commodities and energy at Morningstar Commodities Research, said in an emailed note.

Fund Flows & Issuance: According to a Wells Fargo report, flows week to date were -$1.8 billion and year to date flows stand at -$9.2 billion. New issuance for the week was $1.0 billion and year to date HY is at $172 billion.

(Business Wire) Zayo Group Holdings, Inc. Reports Financial Results for the Fourth Fiscal Quarter Ended June 30, 2017

• $638.0 million of consolidated revenue, including $509.1 million from the Communications Infrastructure segments and $128.9 million from the Allstream segment
• Bookings of $7.5 million, gross installs of $7.3 million, churn of 1.2% and net installs of $1.4 million, all on a monthly recurring revenue (MRR) and monthly amortized revenue (MAR) basis, excluding the Allstream segment
• Adjusted unlevered free cash flow of $117.2 million
• The Company completed the acquisition of Castle Access, Inc.’s San Diego data centers. The two data centers, located at 12270 World Trade Drive and 9606 Aero Drive, total more than 100,000 square feet of space and 2 megawatts of critical, IT power, with additional power available. The acquisition was funded with cash on hand and was considered a stock purchase for tax purpose.

(NJB Magazine) B&G Foods to Acquire Back to Nature Foods Company

• B&G Foods, Inc. announced that it has entered into a definitive agreement to acquire Back to Nature Foods Company, LLC, from Brynwood Partners VI L.P., Mondelēz International and certain other entities and individuals for approximately $162.5 million in cash, subject to customary closing and post-closing working capital adjustments. B&G Foods expects the acquisition to close during the third quarter of 2017, subject to customary closing conditions, including the receipt of regulatory approvals.
• “We are very pleased to add Back to Nature® to the B&G Foods family of brands. Consistent with our acquisition strategy and our recent Green Giant®, spices & seasonings and Victoria® acquisitions, we are continuing to diversify our portfolio of brands and invest in brands and products that we believe are most relevant to today’s consumer,” stated Robert C. Cantwell, President and Chief Executive Officer of B&G Foods.
• B&G Foods expects the acquisition to be immediately accretive to its earnings per share and free cash flow and projects that following the completion of a six-month integration period, the acquired business will generate on an annualized basis net sales of approximately $80 million and adjusted EBITDA of approximately $17 million. Based upon the foregoing adjusted EBITDA guidance, the acquisition represents a purchase price multiple of approximately 9.6 times adjusted EBITDA (or 8.4 times adjusted EBITDA net of the present value of expected tax benefits).

(Reuters) United Rentals to buy equipment rental chain Neff for about $1.3 billion

• United Rentals Inc, the world’s largest construction equipment rental company, will buy Neff Corp for about $1.3 billion, the companies said, topping H&E Equipment Services Inc’s about $1.2 billion offer last month.
• “United Rentals is an industry leader in equipment rentals, and as a result of this transaction, our employees and customers will benefit from the combined company’s expanded geographic footprint and diversified offering,” Neff’s Chief Executive Graham Hood said.
• Neff is expected to generate $419 million of total revenue for the full year, the companies said.

(Reuters) Western Digital group to offer $17.4 billion for Toshiba chip unit

• A consortium that includes Western Digital is offering 1.9 trillion yen ($17.4 billion) for Toshiba Corp’s memory chip business, which the Japanese conglomerate is trying to sell to cover losses from its U.S. nuclear business, sources said on Thursday.
• Western Digital is set to offer 150 billion yen through convertible bonds and will not seek voting rights in the business, the sources who were familiar with the deal said.
• The consortium also includes U.S. private equity firm KKR & Co as well as the state-backed Innovation Network Corp of Japan and Development Bank of Japan, all of which will offer 300 billion yen each for the chip business, the sources said.
• Under the proposal, Toshiba’s lenders including Sumitomo Mitsui Banking Corp and Mizuho Bank would also extend around 700 billion yen in loans, they said.
• Other Japanese companies will also invest around 50 billion yen to ensure domestic firms hold a combined 60 percent stake, the sources said, adding that Toshiba itself would keep a 100 billion yen stake in the business.
• Sources have said that Toshiba wants to reach a deal by the end of the month and close the sale by the end of the fiscal year in March to ensure it does not report negative net worth, or liabilities exceeding assets, for a second year running. This could result in a delisting from the Tokyo Stock Exchange.
• Given regulatory approvals could take more than six months, the company has been hoping to reach a deal by the end of the month to ensure it can close the sale in time.

Fund Flows & Issuance: According to a JP Morgan report, flows week to date were -$2.1 billion and year to date flows stand at -$12.5 billion. New issuance for the week was $7.2 billion and year to date HY is at $171 billion.

(Food Business News) B&G Foods names head of corporate strategy

• Bruce C. Wacha has been appointed to the newly created position of executive vice-president of corporate strategy and business development for B&G Foods, Inc., effective Aug. 21. In this role, Mr. Wacha will oversee the company’s corporate strategy and business development, including mergers and acquisitions, capital markets transactions and investor relations. Additionally, he will serve on B&G Foods’ executive management team.
• “We are very pleased to have Bruce Wacha join our team,” said Robert C. Cantwell, chief executive officer of B&G Foods. “M.&A. and capital markets transactions are vital to our growth strategy, and Bruce is an experienced and talented executive who will be a valuable addition as we continue to execute that strategy.”
• Mr. Wacha joins B&G Foods from Amira Nature Foods Ltd., where he spent three years as the chief financial officer and executive director on the board of directors. Previously, he spent more than 15 years in the financial services industry advising corporate clients across the food, beverage and consumer products landscape at Deutsche Bank Securities, Merrill Lynch and Prudential Securities.

(Business Wire) AES Announces Pricing of $500 Million of Senior Notes in Public Offering

• The AES Corporation announced that it has priced $500 million aggregate principal amount of 5.125% senior notes due 2027. AES intends to use the net proceeds from the offering of the Notes to fund the concurrent tender offer to purchase AES’ outstanding 8.00% senior notes due 2020 and to pay certain related fees and expenses. AES intends to use any remaining net proceeds from this offering after completion of the tender offer to retire certain of its outstanding indebtedness. The closing of the offering of the Notes is expected to occur, subject to certain customary conditions, on August 28, 2017.

(CNBC) Tesla’s first junk bond offering is a hit

• Tesla raised $1.8 billion, $300 million more than expected, in its first high-yield junk bond offering.
• The yield of 5.30 percent was slightly higher than the original guidance of 5.25 percent.
• Goldman Sachs was the lead underwriter of the eight-year bonds. S&P rated the bonds negative B and Moody’s B3.
• “It was well-received,” said Efraim Levy of CFRA. “In a large extent it does show that people are interested in the bonds of the company because they believe in the long-term growth … story.”
• It “speaks to the sheer insanity found in the high-yield market to have a deal like this upsized with terms so unappealing to investors,” said Larry McDonald, author of The Bear Traps Report newsletter. “The deck is stacked for Tesla in bond deal terms, congrats to Elon Musk.”

Meanwhile, away from CNBC, a daily high yield publication ran the headline “Tesla Trades Terribly.”

• The article had many quotes from bond traders on Wall Street. One trader commented that the Tesla deal “was one that a lot of high-yield money managers basically avoided.”
• Another trader said that there was some demand overseas but that “among your regular on-the-run high-yield guys, we couldn’t find anybody that played in it.”
• Finally, a trader went on to say that the “deal was away from the normal high-yield universe” and the order book “was hyped.”

(Bloomberg) Junk-Debt Wrecking Ball Swings Toward Telecom

• Buried in last week’s debt sell-off was an important message to credit investors: Not all bonds are the same, and those of telecommunications companies appear worse off than others.
• While U.S. high-yield bonds lost 0.8 percent last week, debt of companies such as Frontier, CenturyLink and Intelsat were hit even harder. Speculative-grade bonds of telecom companies lost 1.3 percent on average, more than those in any other industry.
• The pronounced industry weakness was due in part to some company-specific issues, such as some disappointing second-quarter earnings and merger speculation. But the disproportionate declines highlight broader investor concern about an increasingly challenging backdrop for these companies.
• While a collapse is hardly imminent for these companies, it’s worthwhile questioning what their futures look like in three, five or 10 years. And from debt investors’ perspective, it’s worth taking note of this, especially in light of current trends in the $1.3 trillion U.S. junk-bond market. Instead of a broad-based sell-off, weakness has cycled through specific sectors, one or two at a time. (Remember when energy bonds were the focus, back in 2014 and 2015, or retail debt of late?)

(Bloomberg) Energy Capital, Investors to Buy Calpine for $5.6 Billion

• Private equity firm Energy Capital Partners and a consortium of investors have struck a deal to buy U.S. power generator Calpine Corp. for $5.6 billion in cash.
• Tyler Reeder, a partner at Energy Capital, said the firm doesn’t expect to make any changes to the way Calpine operates or to the company’s financial policy and previously announced $2.7 billion debt reduction plan.