Flood of junk supply swamps demand

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The high-yield market faces a painful mismatch as the summer’s supply flood runs up against falling investor demand. Around $4 billion came to the market each week in July, with supply only starting to taper off in the mid-August vacation season.

Formerly distressed names issuing large deals have made up the bulk of the new supply. Dex Media West, Dynegy, and Case New Holland have each issued bonds worth over $750 million.

Many smaller companies also issued modest deals of around $15