"If you're out of our risk box, we aren't going to touch it."
The big news in stock markets today is Western Digital buying Sandisk for $19 billion, or about $86.50 in cash and stock compared to Sandisk's $79.19 closing price on Tuesday.
The 9% premium even though this deal was heavily rumored is the kind of thing that makes you grind your teeth for leaving free money on the table. The best reaction to any missed trade is to move on and focus on the next one but for the M&A crowd there might be some waiting.
Bloomberg reports today that of 195 dollar-denominated buyout loans issued last year, 94 are trading below the issue price.
"Until the market settles down, and one or two regular opportunistic deals come, issuers tend to want to sit on the sidelines" said Tim Broadbent, the New York-based head of Americas leveraged loan syndicate at Barclays told Bloomberg. "The market is pretty selective on credit."
It's only a matter of time before some part of the junk bond market blows up. The energy market will probably be what sets it off.
