It was a quiet week in the U.S. high yield bond market as accounts get a head-start on the Labor Day holiday. There was $4.7 billion of issuance during the week via 15 deals, the smallest weekly figure since early July, when the market was restarting from the July 4 holiday and recovering from the 'taper' drubbing it took in June.
So far in 2013 U.S. high yield bond issuance totals $206 billion, up slightly from the same period in 2012, according to S&P Capital IQ/LCD.
The market was uneventful in terms deal structure, as well. After a relative rush of PIK toggle offerings over the past few weeks there were none last week, leaving PIK toggle issuance through Aug. 16 at a relatively robust $2.1 billion, after an impressive $2.9 billion in July. The July figure is the highest monthly PIK toggle volume since the $3.1 billion in October 2012.
So far in 2013 there has been $8.2 billion in PIK toggle issuance, surpassing the full-year 2012 figure of $6.7 billion and the most since the $13.4 billion during the Pre-Lehman era of 2008. (The record: $19.6 billion in 2007.)
PIK toggle bonds are seen as an indication of increased investor appetite for risk, as these deals include the option to be repaid with additional debt ("in-kind") as opposed to cash.
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