Grid IconAll Posts Market Summaries

North American Bond Research – April 16, 2020

Posted on April 16, 2020
HIGH YIELD BOND RESEARCH
April 16, 2020
Bond Markets

MARKETS UP ON SLIGHTLY BETTER UNEMPLOYMENT NUMBERS. EXPECTATIONS WERE THAT 5.5 MM AND ONLY 5.25 MM FILED. GERMANY CONTEMPLATING OPENING THEIR ECONOMY NEXT WEEK. 10 Year Treasury notes were down 2.9 basis points. S&P +0.58%, Dow +0.14%, NASDAQ +1.66%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 2.2 MILLION+ CASES AND 144000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 675000+ CASES AND 35000+ DEATHS.  Among high-grade bonds showing topmost price gains at appreciable volumes traded, Ford Motor Co (USD) 7.4% 11/1/2046 made analysts’ ‘Conviction Buy’ list. (See the chart below for Ford Motor Co bonds) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Vodafone Group PLC 7% 4/4/2079 +2.4%
  AerCap Ireland Capital LTD 4.625% 10/30/2020 +0.8%
  Occidental Petroleum Corp. 2.9% 8/15/2024 +1.0%
  Intelsat Jackson Hldg SA 5.5% 8/1/2023 (1) +8.4%
–   Diamond Offshore Drilling 7.875% 8/15/2025 -45.7%
  United Rentals North AM 4% 7/15/2030 -0.5%
  General Motors Co. 4.875% 10/2/2023 -0.3%
  United Rentals Inc. 4.875% 1/15/2028 -0.2%
  Petrobras Global Finance BV 6.85% 6/5/2115 -0.9%
Vodafone Group PLC   7% 4/4/2079
AerCap Ireland Capital LTD   4.625% 10/30/2020
Diamond Offshore Drilling   7.875% 8/15/2025
United Rentals North AM   4% 7/15/2030
Occidental Petroleum Corp.   2.9% 8/15/2024
Intelsat Jackson Hldg SA   5.5% 8/1/2023 (1)
General Motors Co.   4.875% 10/2/2023
United Rentals Inc.   4.875% 1/15/2028
Diamond Offshore Drilling Inc.   4.875% 11/1/2043
Petrobras Global Finance BV   6.85% 6/5/2115
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.84% 4.71% 1.75% -6.76% -5.84% 4.85%
Mining -1.19% 5.53% -7.69% -33.49% -32.86% -23.40%
Construction 0.07% 4.00% -4.49% -7.57% -6.79% 2.43%
Manufacturing -0.07% 5.05% -0.80% -6.71% -5.75% 2.06%
Transportion, Communication, Electric/Gas 0.04% 4.74% 0.50% -6.07% -5.30% 2.26%
Wholesale 0.24% 4.06% -1.96% -11.60% -10.56% -3.51%
Retail -0.25% 4.88% -3.89% -11.21% -10.46% -0.44%
Finance, Insurance, Real-Estate -0.07% 4.18% -2.59% -7.62% -6.77% 2.15%
Services 0.09% 5.34% -0.96% -7.44% -6.68% 1.85%
Public Administration 0.89% 5.89% 0.15% -8.35% -7.65% 1.36%
Energy -0.90% 6.72% -5.11% -31.10% -30.49% -22.45%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. Spirit Aerosystems Inc. (USD) 7.5% 4/15/2025 144A (04/15/2020): 1200MM Second Lien Notes, Price at Issuance 100, Yielding 7.5%.

2. HAT Hldg I LLC Hat Hldg II LLC (USD) 6% 4/15/2025 144A (04/15/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6%.

3. HAT Hldg I LLC Hat Hldg II LLC (USD) 6% 4/15/2025 Reg S (04/15/2020): 400MM Senior Unsecured , Price at Issuance 100, Yielding 6%.

4. Energizer Hldg Inc. (USD) 6.375% 7/15/2026 Reg S (04/15/2020): 250MM Senior Unsecured Notes, Price at Issuance 102.5, Yielding 5.89%.

5. Saudi International Bond (USD) 4.5% 4/22/2060 144A (04/15/2020): 3000MM Senior Unsecured Notes, Price at Issuance 99.083, Yielding 4.55%.

6. Cleveland-Cliffs Inc. (USD) 9.875% 10/17/2025 144A (04/15/2020): 400MM Secured Notes.

7. Cleveland-Cliffs Inc. (USD) 9.875% 10/17/2025 Reg S (04/15/2020): 400MM Secured Notes.

8. Six Flags Inc. (USD) 7% 7/1/2025 144A (04/15/2020): 725MM Secured Notes, Price at Issuance 100, Yielding 7%.

9. Six Flags Inc. (USD) 7% 7/1/2025 Reg S (04/15/2020): 725MM Secured Notes, Price at Issuance 100, Yielding 7%.

1. Open Lending LLC: $225MM TLB

2. Xperi Corp. : $1.1B seven-year secured covenant lite TLB

3. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A

4. T-Mobile USA Inc.: $8B senior secured credit facilities: $4B five-year revolver; $4B seven-year cove-lite TL

5. Tata Chemicals North America Inc. : $380MM TL (Ba3)

6. Innovate Xcessories & Services LLC: $695MM credit facilities: $75MM revolver; $620MM TL(B2/B)

7. Instructure: $825MM senior secured credit facilities: $50MM revolver; $775MM TL

8. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL

9. Snapav: $390MM term loans: $290MM TL (B2); $100MM TL

10. Service Logic: $140MM bank debt: $40MM TL; $100MM DD TL

Additional Commentary

NEW ISSUANCE WATCH: Six Flags Inc. issued $1500 MM bonds.
Top Widening Loans Top Narrowing Loans
Ascent Resources Marcellus LLC (USD) TL EXT L+650 12/31/2049
ATI Holdings (USD) TLB L+350 05/10/2023
Arvos Holding (EUR) TLB2 E+450 08/29/2021
Epic Y-Grade (USD) TLB L+600 06/13/2024
Reynolds Group Hldgs Inc. (EUR) TLB E+325 02/05/2023
Burlington Coat Factory Warehouse Corp. (USD) TLB L+175 11/17/2024
Aecom Technology Corp. (USD) TLA L+150 03/13/2021
Cerba HealthCare (EUR) TLB E+350 04/19/2024
Aruba Investments Inc. (USD) TL L+325 02/01/2022
Rocket Software (USD) TL L+425 11/28/2025

Loans and Credit Market Overview


SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

  • Symantec Corp., Broadcom LTD, Toll Brothers Inc., Cole-Parmer Instrument Co.

OVERALL CREDIT MARKET:

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  100 bp (basis points), as of 04/16/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
April 16, 2020
Bond Markets

MARKETS UP ON SLIGHTLY BETTER UNEMPLOYMENT NUMBERS. EXPECTATIONS WERE THAT 5.5 MM AND ONLY 5.25 MM FILED. GERMANY CONTEMPLATING OPENING THEIR ECONOMY NEXT WEEK. 10 Year Treasury notes were down 2.9 basis points. S&P +0.58%, Dow +0.14%, NASDAQ +1.66%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 2.2 MILLION+ CASES AND 144000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 675000+ CASES AND 35000+ DEATHS. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Ford Motor Co (USD) 7.4% 11/1/2046 made analysts’ ‘Conviction Buy’ list. (See the chart below for Ford Motor Co bonds) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Essential Utilities Inc. 3.351% 4/15/2050 +1.7%
  Exxon Mobil Corp. 3.452% 4/15/2051 +1.4%
  US Bancorp 5.3% PERP +2.0%
  CVS Health Corp. 4.125% 4/1/2040 +0.9%
  AFLAC Inc. 3.6% 4/1/2030 +0.3%
–   General Electric Co. 4.35% 5/1/2050 -0.8%
  Cigna Corp. 3.4% 3/15/2050 -0.5%
  Oracle Corp. 3.6% 4/1/2050 -0.2%
  Charter Communications Operating LLC 2.8% 4/1/2031 -0.1%
  CVS Health Corp. 4.25% 4/1/2050 -0.2%
General Electric Co.   4.35% 5/1/2050
Cigna Corp.   3.4% 3/15/2050
Oracle Corp.   3.6% 4/1/2050
Charter Communications Operating LLC   2.8% 4/1/2031
CVS Health Corp.   4.25% 4/1/2050
Essential Utilities Inc.   3.351% 4/15/2050
Exxon Mobil Corp.   3.452% 4/15/2051
Anheuser-Busch Inbev Worldwide Inc.   5.55% 1/23/2049
General Electric Co.   3.625% 5/1/2030
Goldman Sachs Group Inc.   2.6% 2/7/2030
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.23% 2.03% -0.78% -1.33% -0.45% 4.75%
Mining 0.50% 4.00% 0.39% -6.88% -6.12% 2.53%
Construction 0.43% 3.51% -1.21% -3.65% -2.78% 5.24%
Manufacturing 0.31% 3.40% 1.82% 1.35% 2.10% 10.26%
Transportion, Communication, Electric/Gas 0.56% 4.57% 3.23% 1.05% 2.06% 11.97%
Wholesale 0.40% 3.76% -0.70% -1.45% -0.75% 8.21%
Retail 0.47% 3.86% 1.93% 1.73% 2.23% 11.50%
Finance, Insurance, Real-Estate 0.24% 2.50% 0.79% 0.36% 0.95% 7.99%
Services 0.43% 3.28% 1.15% 1.02% 1.75% 10.10%
Public Administration 0.11% 0.26% 0.50% 3.17% 3.43% 6.27%
Energy 0.46% 4.77% 1.95% -6.77% -6.15% 1.96%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Coherus Biosciences Inc. (USD) 1.5% 4/15/2026 (04/15/2020): 200MM Senior Subordinated Notes, Price at Issuance 100.

2. Dick’s Sporting Goods Inc. (USD) 3.25% 4/15/2025 CVT (04/15/2020): 500MM Senior Unsecured Notes, Price at Issuance 100.

3. Newfoundland Power Incorporated (CAD) 3.608% 4/20/2060 (04/15/2020): 100MM Secured Notes, Price at Issuance 100, Yielding 3.61%.

4. Royal Bank of Canada (USD) 1.6% 4/17/2023 (04/15/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.936, Yielding 1.62%.

5. LYB International Finance BV (USD) 4.2% 5/1/2050 (04/15/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.373, Yielding 4.24%.

6. LYB International Finance BV (USD) 2.875% 5/1/2025 (04/15/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.922, Yielding 2.89%.

7. LYB International Finance BV (USD) 3.375% 5/1/2030 (04/15/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.813, Yielding 3.4%.

8. JPMorgan Chase & Co. (USD) 2.522% 4/22/2031 (04/15/2020): 2750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.52%.

9. JPMorgan Chase & Co. (USD) 2.083% 4/22/2026 (04/15/2020): 3500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.08%.

10. JPMorgan Chase & Co. (USD) VAR% 4/22/2041 (04/15/2020): 1500MM Senior Unsecured Notes, Price at Issuance 100.

(None Current 04/16/2020)
Additional Commentary

NEW ISSUANCE WATCH: on 04/16/2020 participants welcome a $1250MM new corporate-bond offering by Royal Bank of Canada.
Top Widening Loans Top Narrowing Loans
Ascent Resources Marcellus LLC (USD) TL EXT L+650 12/31/2049
ATI Holdings (USD) TLB L+350 05/10/2023
Arvos Holding (EUR) TLB2 E+450 08/29/2021
Epic Y-Grade (USD) TLB L+600 06/13/2024
Reynolds Group Hldgs Inc. (EUR) TLB E+325 02/05/2023
Burlington Coat Factory Warehouse Corp. (USD) TLB L+175 11/17/2024
Aecom Technology Corp. (USD) TLA L+150 03/13/2021
Cerba HealthCare (EUR) TLB E+350 04/19/2024
Aruba Investments Inc. (USD) TL L+325 02/01/2022
Rocket Software (USD) TL L+425 11/28/2025

Loans and Credit Market Overview

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

  • Symantec Corp., Broadcom LTD, Toll Brothers Inc., Cole-Parmer Instrument Co.

OVERALL CREDIT MARKET:

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 100 bp (basis points), as of 04/16/2020
  • Net positive capital flows into high-yield ETFs & mutual funds

Copyright 2020 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

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 6,200+ CDS reference entities
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 16 products and services from debt to CDS to loans to mid-market
  • Used by top buy and sell-side firms worldwide

Share

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