Grid IconAll Posts Market Summaries

High Yield Bond Research – May 2, 2019

Posted on May 2, 2019
The Dow Jones continued to fall Thursday, dropping 122.35 points as the Federal Reserve refused to lower interest rates. Worker productivity in the U.S. is advancing at the fastest rate since 2010. Additionally, 10-year U.S. Treasury notes rose 3.6 basis pointsS&P -0.21%, Dow -0.46%, NASDAQ  -0.16%.
Averages for 15 and 30-year fixed-rate mortgages have retreated a bit, after a month of steady increase. “Slightly weaker inflation and labor economic data caused mortgage rates to dip this week,” Sam Khater, Freddie Mac’s chief economist, said in a statement. For the near future, the housing market appears relatively steady. Gold fell 12.4 points amid bearish outside markets.  ADI proprietary index data showed a net yield increment for high-yield versus high-grade bonds. High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded, Pacific Gas & Electric Co. (USD) 3.75% 8/15/2042 made analysts’ ‘Conviction Buy’ lists. (See the chart for Pacific Gas & Electric Co. below.) Andrew Robartes
Key Gainers and Losers Volume Leaders
+   Tesla Motors Inc. 5.3% 8/15/2025 Reg S + 2.2%
  Sprint Corp. 7.625% 3/1/2026 + 0.4%
–   US Steel Corp. 6.875% 8/15/2025 -2.1%
Teva Pharmaceutical Industries LTD   2.2% 7/21/2021
General Motors Financial Co. Inc.   2.4% 5/9/2019
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.16% -0.11% 1.29% 4.32% 7.55% 7.86%
Mining -0.09% -0.41% 1.46% 3.35% 9.60% 4.80%
Construction 0.05% 0.10% 1.28% 4.42% 8.28% 5.82%
Manufacturing -0.01% 0.08% 1.17% 3.93% 7.87% 6.64%
Transportion, Communication, Electric/Gas 0.02% 0.30% 1.42% 4.70% 7.94% 7.42%
Wholesale -0.00% 0.10% 1.16% 3.83% 8.18% 5.78%
Retail 0.08% 0.60% 2.57% 5.40% 10.02% 8.00%
Finance, Insurance, Real-Estate 0.01% 0.20% 1.21% 3.88% 7.93% 6.92%
Services 0.01% 0.11% 1.01% 3.67% 8.06% 7.49%
Public Administration -0.09% -0.19% 0.32% 2.55% 6.10% 10.09%
Energy -0.08% -0.36% 1.61% 3.66% 9.54% 4.32%
Total returns (non-annualized) by rating, market weighted.

unnamed (91)

New Issues Forward Calendar
1. GTCR (Ap) Finance Inc. (USD) 8% 5/15/2027 144A (05/02/2019):475MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8%.

2. Teekay Corp. (USD) 9.25% 11/15/2022 144A (05/02/2019): 250MM Secured Notes, Price at Issuance 100, Yielding 9.25%.

1. Calpine Corp.: $1.4B bonds, Expected Q2 2019

2. Starwood Property Trust Inc: $300M senior notes, Expected Q2 2019

Additional Commentary

NEW ISSUANCE WATCH: on 4/29/19 participants welcome a $500MM new corporate-bond offering by
Teekay Corp.  The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 4/26/19, with a net outflow of $0.520B, year-to-date $13.8B flowed into high-yield.
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Weatherford International LTD (5Y Sen USD MR14)
Road King Infrastructure LTD (5Y Sen USD CR14)
Atmos Energy Corp. (5Y Sen USD MR14)

unnamed (92)

Loans and Credit Market Overview


Deals recently freed for secondary trading, notable secondary activity:

  • iHeartCommunications Inc., Flexera Software Inc., JBS USA LLC, Sundyne US Purchaser

Long-term bond yields are expected to hit a cyclical peak in 2019 given tight fiscal policy and lagging global economies. Europe remains checked by stubbornly low inflationary forces.  
Positive effects remained in force:

  • TED spread held below 17 bp (basis points), as of 05/02/19
  • Net positive capital flows into high-yield ETFs & mutual funds

Copyright 2019 Advantage Data Inc. All Rights Reserved.

Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 300,000+ BDC fair value assessments dating back to 2000
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 15 products and services from debt to loans to mid-market
  • Used by top buy and sell-side firms worldwide


facebook share icon twitter share icon linkedin share icon
Ready to get Started? Free Trial