OIL CLOSED AT 13.09. EARNINGS DISAPPOINTMENT AND POOR APRIL CONSUMER SENTIMENT SENT STOCKS LOWER, ENDING A 4 DAY WINNING STREAK. 10 Year Treasury notes were down 4.6 basis points. S&P -0.52%, Dow -0.13%, NASDAQ -1.4%.
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Market Summaries
North American Bond Research – April 28, 2020
Posted on April 28, 2020|
HIGH YIELD BOND RESEARCH
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April 28, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.12 MILLION+ CASES AND 216000+ 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. 8.5% 4/21/2023 Ford Motor Co. 9% 4/22/2025 Enbridge Inc. VAR% 3/1/2089 Ford Motor Co. 9.625% 4/22/2030 NXP BV 3.875% 9/1/2022 Reg S Netflix Inc. 5.875% 11/15/2028 Expedia Inc. 3.8% 2/15/2028 (1) General Motors Co. 4.875% 10/2/2023 Teva Pharmaceutical Industries LTD 2.2% 7/21/2021 Occidental Petroleum Corp. 2.7% 2/15/2023 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Jeld-Wen Inc. (USD) 6.25% 5/15/2025 144A (04/27/2020): 250MM Secured Notes, Price at Issuance 100, Yielding 6.25%. | 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: Jeld-Wen Inc issued 250 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| McDermott International Inc. (USD) DD L+1000 10/21/2021 Red Ventures (USD) TLB L+250 11/08/2024 GrafTech International LTD (USD) TLB L+350 02/12/2025 Ardent Health Partners LLC (USD) TL L+450 06/28/2025 Tibco Software Inc. (USD) TLB3 L+375 07/03/2026 |
ProFrac Services LLC (USD) TLB L+575 09/06/2023 Sundyne US Purchaser (USD) TLB L+425 03/17/2027 CSM Bakery (USD) TLB L+400 07/03/2020 Hanger Inc (USD) TLB L+350 03/06/2025 Clear Channel Outdoor Inc. (USD) TLB L+350 08/09/2026 |
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 74 bp (basis points), as of 04/28/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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April 28, 2020
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Bond Markets
OIL CLOSED AT 13.09. EARNINGS DISAPPOINTMENT AND POOR APRIL CONSUMER SENTIMENT SENT STOCKS LOWER, ENDING A 4 DAY WINNING STREAK. 10 Year Treasury notes were down 4.6 basis points. S&P -0.52%, Dow -0.13%, NASDAQ -1.4%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.12 MILLION+ CASES AND 216000+ 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. 3.068% 4/30/2041 Anheuser-Busch Inbev Worldwide Inc. 4.5% 6/1/2050 Anheuser-Busch Inbev Worldwide Inc. 4.9% 2/1/2046 Morgan Stanley VAR% 4/1/2031 Walgreens Boots Alliance Inc. 4.1% 4/15/2050 Citigroup Inc. 4.412% 3/31/2031 Ford Motor Co. 8.5% 4/21/2023 Shell Intl Finance BV 3.25% 4/6/2050 Goldman Sachs Group Inc. 3.5% 4/1/2025 Wells Fargo & Co. VAR% 4/30/2026 |
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Georgia-Pacific LLC (USD) 1.75% 9/30/2025 144A (04/27/2020): 900MM Senior Unsecured Notes, Price at Issuance 99.98, Yielding 1.75%.
2. Biogen Inc. (USD) 2.25% 5/1/2030 (04/27/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.973, Yielding 2.25%. 3. Delta Airlines (USD) 7% 5/1/2025 144A (04/27/2020): 3500MM First Lien Notes, Price at Issuance 100, Yielding 7%. 4. Delta Airlines (USD) 7% 5/1/2025 Reg S (04/27/2020): 3500MM First Lien Notes, Price at Issuance 100, Yielding 7%. 5. 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%. 6. Sector RE V LTD (USD) 0% 3/1/2025 (04/27/2020): 91MM Unsecured Notes, Price at Issuance 100, Yielding 0%. 7. 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%. 8. Charles Schwab Corp. (USD) 5.375% PERP (04/27/2020): 2500MM Junior Subordinated Notes, Price at Issuance 100, Yielding 5.38%. 9. 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%. 10. 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%. |
Additional Commentary
NEW ISSUANCE WATCH: on 04/28/2020 participants welcome a $1500MM new corporate-bond offering by Biogen Inc.
| Top Widening Loans | Top Narrowing Loans |
| McDermott International Inc. (USD) DD L+1000 10/21/2021 Red Ventures (USD) TLB L+250 11/08/2024 GrafTech International LTD (USD) TLB L+350 02/12/2025 Ardent Health Partners LLC (USD) TL L+450 06/28/2025 Tibco Software Inc. (USD) TLB3 L+375 07/03/2026 |
ProFrac Services LLC (USD) TLB L+575 09/06/2023 Sundyne US Purchaser (USD) TLB L+425 03/17/2027 CSM Bakery (USD) TLB L+400 07/03/2020 Hanger Inc (USD) TLB L+350 03/06/2025 Clear Channel Outdoor Inc. (USD) TLB L+350 08/09/2026 |
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 74 bp (basis points), as of 04/28/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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