The risk premium on the Markit CDX North American High Yield Index dropped 4.5 basis points to 424.1 basis points, Bloomberg prices show.
Hertz Swaps
The cost to protect against debt default of a Hertz Global Holdings Inc. unit fell the most in almost a month as the largest publicly traded U.S. auto-rental chain forecast 2015 adjusted earnings that surpassed analysts’ estimates.
Five-year credit-default swaps on Hertz Corp. declined 10.9 basis points to 254.1 basis points, Bloomberg prices show. That’s the biggest intraday drop since March 7.
Hertz projected 2015 adjusted per-share earnings of $3.10 to $3.30 in a presentation for its investor meeting, above the average $2.39 expected by three analysts.
The average relative yield on speculative-grade, or junk- rated, debt narrowed 1.5 basis point to 501.4 basis points, Bloomberg data show. High-yield, high-risk debt is rated below Baa3 by Moody’s Investors Service and less than BBB- at Standard & Poor’s.
‘Solid Demand’
The Moody’s liquidity-stress index, which typically rises when corporations’ ability to manage cash needs appears to worsen, rose to 3.2 percent last month from a record low of 3 percent in February, analysts led by John Puchalla wrote in an April 1 report. The index reached a high of 20.9 percent in March 2009.
“Solid demand from fixed-income investors for both bonds and leveraged loans continues to drive market access for speculative-grade companies seeking to refinance or reprice their debt,” Puchalla wrote.
Through the end of March, U.S. high-yield issuance was 5.4 percent ahead of the pace at the same time last year, according to the report.