High-yield issuance costs leap

The cost for issuing sub investment-grade debt rose for the first time in April yesterday, according to Bloomberg. The average interest rate for issuing high-yield bonds rose to 8.337% from 8.291% on April 16, according to Bank of America-Merrill Lynch US High Yield Master II index.

The KDP high yield daily index, another proxy for US high-yield bond prices, also rose slightly, to an average price of 108.10 and an average yield of 7.66%. The KDP index is comprised of 100 speculative US bond issues.

No investment grade debt was sold for a second working day running on Monday, according to the Bloomberg report. However, Thermo-Fisher Scientific is selling $750 million of investment-grade senior notes with five- and 10-year maturities today. JP Morgan is handling the issuance.

Among the latest high yield issuers is broadcaster Albritton, which priced on $455 million of two-year notes with a coupon of 7.75% Friday. The company plans to use the cash to repurchase its 7.75% notes maturing in 2012. Other major high-yield issuances this week include CG Industries, which is selling $1.6 billion of eight- and 10-year notes at 7% and 7.25%, and Merge Healthcare, which sold $200 million of five-year bonds on Monday bearing an 11.75% coupon. Limited Brands is also doing a $300 million issuance today, see Lingerie retailer reveals refi terms.