U.S. casino operator Wynn Resorts Ltd and automated teller machines maker NCR Corp jointly raised US$1 billion on Tuesday, in the first unsecured junk-rated bond offerings since the market was roiled by the coronavirus outbreak at the start of March.
The offerings indicate investor appetite for risk is gradually returning in the market for new corporate debt rated below investment grade.The so-called high-yield market has been supported by the Federal Reserve's pledge to backstop the investment-grade market, according to Bill Zox, chief investment officer of fixed income at Diamond Hill Capital Management.
Wynn, which issued a warning on Feb. 28 about the potential impact of the coronavirus on earnings, sold US$600 million in new debt maturing in 2025, upsized from the US$350 million the company originally planned to raise. Yum Brands Inc and Carnival Corp last week reopened the market for riskier debt after its longest lull since the 2008 financial crisis, but those deals were both secured against the companies' assets. In an unsecured deal, the borrowing is done against a company's perceived creditworthiness.
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