Tuesday, May 1, 2018

WeWork, WeCrash

From ZeroHedge:
Just days after it began trading, WeWork's freshly minted $702 million bond issue is crashing as the massively over-subscribed junk bond issue sees dramatic buyer's remorse...

The high yield bond sold for par last week and is now trading with a 95 handle, which, as Bloomberg reports, stands in sharp contrast to the outsized orders the company saw when it marketed its debt in primary markets last week.

The company had initially sought to issue $500 million of the securities, but decided to upsize once the orders came pouring in, a person with knowledge of the situation said. The seemingly odd-lot number of $702 million was chosen in part because the company considered it a lucky number, another person said.
WeWork’s deal underscored the risks investors have been willing to take in the new-issue market as they struggle to find high-yielding assets. The office-space leasing company joined a wave of high-flying cash-burning firms that have managed to recently tap debt markets, like Uber Technologies Inc. and Netflix Inc.

The bond was the most active in the U.S. high-yield market on Monday, Trace data show....
... MORE

Recently: The FT Alphaville posts embedded in "The WeWork Chronicles (you won't believe #3)".