Freshly Minted – October 14, 1999

HIGH YIELD

It has been a difficult quarter in high yield. The lack of liquidity that began in August has continued to persist, with only slight improvement in September.

The new issue market for high yield bonds has been extremely challenging. The big news on the shipping high yield front is that SeaContainers priced a $115 million 144A deal to yield 11%. BankBoston and Lazard arranged the deal, which is the first maritime-related deal to get done since Millenium came to market in August of 1997. We discuss the deal in greater detail below.

Elsewhere, one deal priced yesterday, Iasis Healthcare, an operator of acute care hospitals. The $230 million deal was rated B3/B- and was priced at 13%, 50 basis points wide of price talk. Forward calendar stands at $1.7 billion with no more deals due to price this week. In both bank and bond markets, borrowers are getting less and paying more as they scramble for “dry powder” to begin Y2K. US stocks dropped again yesterday. Since August 25th, the Dow Jones Industrial Average is off 9.7% and the 10-year treasury stands at 6.11%. See our indices below for details on the performance of individual shipping securities around the world.

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