INVESTORS EYE REOPENING PLANS AND SEE GOVERNMENT LIQUIDITY FLOWING INTO THE MARKETS CAUSING MARKETS TO GO UP. OIL CRASHES TO 12.51(WTI)/19.20(BRENT). 10 Year Treasury notes were down .6 basis points. S&P +1.47%, Dow +1.51%, NASDAQ +1.11%.
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Market Summaries
North American Bond Research – April 27, 2020
Posted on April 27, 2020|
HIGH YIELD BOND RESEARCH
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April 27, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3 MILLION+ CASES AND 197000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1 MILLION+ CASES AND 57000+ DEATHS. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Ferrellgas Partners LP (USD) 8.625% 6/15/2020 made analysts’ ‘Conviction Buy’ list. (See the chart below for Ferrellgas Partners LP bonds) Pierre Robert
| Key Gainers and Losers | Volume Leaders | ||||||||||||||||||||||||||||||
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Ford Motor Co. 9% 4/22/2025 Ford Motor Co. 8.5% 4/21/2023 Gap Inc. 5.95% 4/12/2021 Occidental Petroleum Corp. 2.7% 8/15/2022 Petrobras Global Finance BV 6.85% 6/5/2115 Sabine Pass Liquefaction LLC 5.625% 3/1/2025 Ford Motor Co. 9.625% 4/22/2030 Diamond Offshore Drilling Inc. 4.875% 11/1/2043 Boyd Gaming Corp. 6.375% 4/1/2026 HCA Inc. 5.875% 2/1/2029 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
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(None Current 04/27/2020)
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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: No new issues.
| Top Widening Loans | Top Narrowing Loans |
| NCL Corp. LTD (USD) TLA L+150 01/02/2024 Exclusive Group (EUR) TLB E+400 06/06/2025 Coty Inc. (EUR) TLA E+175 04/05/2023 Clear Channel Outdoor Inc. (USD) TLB L+350 08/09/2026 ProAmpac LLC (USD) TL L+350 11/18/2023 |
Verscend Holding Corp. (USD) TLB L+450 08/27/2025 Ineos Finance PLC (USD) TL L+200 03/31/2024 USIC Holdings Inc. (USD) TL L+325 12/09/2023 Ultimate Software Group (USD) TL L+375 05/03/2026 BJ’s Wholesale Club Inc. (USD) TL L+225 02/03/2024 |
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 78 bp (basis points), as of 04/2/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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April 27, 2020
|
Bond Markets
INVESTORS EYE REOPENING PLANS AND SEE GOVERNMENT LIQUIDITY FLOWING INTO THE MARKETS CAUSING MARKETS TO GO UP. OIL CRASHES TO 12.51(WTI)/19.20(BRENT). 10 Year Treasury notes were down .6 basis points. S&P +1.47%, Dow +1.51%, NASDAQ +1.11%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3 MILLION+ CASES AND 197000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1 MILLION+ CASES AND 57000+ DEATHS. Among high-grade bonds showing topmost price gains at appreciable volumes traded, United Parcel Service Inc. (USD) 4.875% 11/15/2040 made analysts’ ‘Conviction Buy’ list. (See the chart below for United Parcel Service Inc. bonds) Pierre Robert
| Key Gainers and Losers | Volume Leaders | ||||||||||||||||||||||||||||||
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Wells Fargo & Co. VAR% 4/30/2026 Oracle Corp. 3.6% 4/1/2050 Comcast Corp. 3.4% 4/1/2030 Ford Motor Co. 8.5% 4/21/2023 Ford Motor Co. 9% 4/22/2025 Marriott Intl Inc. 5.75% 5/1/2025 Citigroup Inc. 4.412% 3/31/2031 Embraer Netherlands B.V. 5.4% 2/1/2027 Morgan Stanley VAR% 4/1/2031 Goldman Sachs Group Inc. 3.5% 4/1/2025 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Biogen Inc. (USD) 2.25% 5/1/2030 (04/27/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.973, Yielding 2.25%.
2. Delta Airlines (USD) 7% 5/1/2025 144A (04/27/2020): 3500MM First Lien Notes, Price at Issuance 100, Yielding 7%. 3. Delta Airlines (USD) 7% 5/1/2025 Reg S (04/27/2020): 3500MM First Lien Notes, Price at Issuance 100, Yielding 7%. 4. Air Products & Chemicals Inc. (USD) 2.8% 5/15/2050 (04/27/2020): 950MM Senior Unsecured Notes, Price at Issuance 99.636, Yielding 2.82%. 5. Sector RE V LTD (USD) 0% 3/1/2025 (04/27/2020): 91MM Unsecured Notes, Price at Issuance 100, Yielding 0%. 6. Air Products & Chemicals Inc. (USD) 2.7% 5/15/2040 (04/27/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.722, Yielding 2.72%. 7. Charles Schwab Corp. (USD) 5.375% PERP (04/27/2020): 2500MM Junior Subordinated Notes, Price at Issuance 100, Yielding 5.38%. 8. Air Products & Chemicals Inc. (USD) 2.05% 5/15/2030 (04/27/2020): 900MM Senior Unsecured Notes, Price at Issuance 99.864, Yielding 2.07%. 9. Air Products & Chemicals Inc. (USD) 1.5% 10/15/2025 (04/27/2020): 550MM Senior Unsecured Notes, Price at Issuance 99.979, Yielding 1.5%. 10. Air Products & Chemicals Inc. (USD) 1.85% 5/15/2027 (04/27/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.901, Yielding 1.86%. |
Additional Commentary
NEW ISSUANCE WATCH: on 04/27/2020 participants welcome a $250MM new corporate-bond offering by Charles Schwab Corp.
| Top Widening Loans | Top Narrowing Loans |
| NCL Corp. LTD (USD) TLA L+150 01/02/2024 Exclusive Group (EUR) TLB E+400 06/06/2025 Coty Inc. (EUR) TLA E+175 04/05/2023 Clear Channel Outdoor Inc. (USD) TLB L+350 08/09/2026 ProAmpac LLC (USD) TL L+350 11/18/2023 |
Verscend Holding Corp. (USD) TLB L+450 08/27/2025 Ineos Finance PLC (USD) TL L+200 03/31/2024 USIC Holdings Inc. (USD) TL L+325 12/09/2023 Ultimate Software Group (USD) TL L+375 05/03/2026 BJ’s Wholesale Club Inc. (USD) TL L+225 02/03/2024 |
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 78 bp (basis points), as of 04/27/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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