The junk bond crunch yesterday began to ease, thus giving some hope to private equity firms that have been forced to put prospective deals into a leveraged holding pattern.
Why it matters: This had been the longest high-yield drought in decades, lasting longer than during the financial crisis or after 9/11.
Targa Resources Partners, a midstream energy unit of Targa Resources (NYSE: TRGP), sold $1.5 billion of high-yield bonds. This was twice what Targa had originally intended to sell, reflecting strong buyer interest.
It was the first non-investment-grade offering in over five weeks, which is a longer drought than was experienced during the financial crisis or after 9/11.
Targa will use proceeds to refinance debt and other general corporate purposes, not for an acquisition. So this doesn't necessarily swing the door open for leveraged buyouts, but at least may prime the pump a bit.
