Debut Junk-Bond Issuers Emerge From Loan-Only Roots to Refinance

Companies that have only taken on loan financing are hitting the U.S. junk-bond market for the first time en masse, capitalizing on cheap borrowing costs to refinance debt before Treasury yields rise further.

TKC Holdings, a prison vendor owned by HIG Capital, and a unit of coal miner Coronado Global Resources Inc. brought their first bond sales this week, adding to the 41 debut junk issuers that have already tapped the market this year. About two-thirds are using the new bonds to refinance debt, many of which are repaying leveraged loans, according to data compiled by Bloomberg.

Junk bonds ...