GDP CONTRACTED BY 4.8%, BUT THE BAD NEWS WAS ECLIPSED BY GILEAD REPORTING THAT REMEDESIVIR WAS SHOWN TO BE AN EFFECTIVE COVID-19 TREATMENT. OIL PRICES ALSO SHOT UP TO 15.19 A BARREL. 10 Year Treasury notes were up 1.7 basis points. S&P +2.66%, Dow +2.21%, NASDAQ +3.57%.
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Market Summaries
North American Bond Research – April 29, 2020
Posted on April 29, 2020|
HIGH YIELD BOND RESEARCH
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April 29, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.2 MILLION+ CASES AND 227000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.06 MILLION+ CASES AND 61000+ 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 Occidental Petroleum Corp. 2.9% 8/15/2024 Occidental Petroleum Corp. 2.7% 8/15/2022 Cenovus Energy Inc. 4.25% 4/15/2027 Gap Inc. 5.95% 4/12/2021 Ford Motor Co. 9.625% 4/22/2030 Intl Lease Finance Corp. 4.625% 4/15/2021 Charter Communications Operating LLC 4.8% 3/1/2050 Occidental Petroleum Corp. 5.55% 3/15/2026 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. PolyOne Corp. (USD) 5.75% 5/15/2025 144A (04/29/2020): 650MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%.
2. PolyOne Corp. (USD) 5.75% 5/1/2025 Reg S (04/29/2020): 650MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%. |
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: PolyOne Corp issued 650 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Befesa SA (EUR) TLB E+250 07/09/2026 GCI Holdings Inc. (USD) TLB L+225 02/02/2022 PHS Group PLC (GBP) TL L+525 11/30/2021 Clay Holdco BV (EUR) TLA E+450 11/01/2025 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 |
Convergint Technologies LLC (USD) TL L+300 02/01/2025 Entertainment Properties Trust (USD) TL L+110 02/27/2023 NCL Corp. LTD (USD) TLA L+150 01/02/2024 Navios Maritime Partners LP (USD) TLB L+450 06/18/2020 AR Packaging Group (EUR) TLB E+475 08/15/2024 |
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 66 bp (basis points), as of 04/29/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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April 29, 2020
|
Bond Markets
GDP CONTRACTED BY 4.8%, BUT THE BAD NEWS WAS ECLIPSED BY GILEAD REPORTING THAT REMEDESIVIR WAS SHOWN TO BE AN EFFECTIVE COVID-19 TREATMENT. OIL PRICES ALSO SHOT UP TO 15.19 A BARREL. 10 Year Treasury notes were up 1.7 basis points. S&P +2.66%, Dow +2.21%, NASDAQ +3.57%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.2 MILLION+ CASES AND 227000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.06 MILLION+ CASES AND 61000+ 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 General Electric Co. 4.35% 5/1/2050 Citigroup Inc. 4.412% 3/31/2031 Exxon Mobil Corp. 3.452% 4/15/2051 Diageo Capital PLC 2% 4/29/2030 Ford Motor Co. 8.5% 4/21/2023 Wells Fargo & Co. VAR% 4/30/2026 Marriott Intl Inc. 5.75% 5/1/2025 General Electric Co. FLT% PERP (1) Oracle Corp. 3.85% 4/1/2060 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Northern Trust Corp. (USD) 1.95% 5/1/2030 (04/28/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.621, Yielding 1.99%.
2. Liberty Mutual Group Inc. (USD) 3.95% 5/15/2060 144A (04/28/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.899, Yielding 3.95%. 3. Baker Hughes Inc. (USD) 4.486% 5/1/2030 (04/28/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.49%. 4. Liberty Mutual Group Inc. (USD) 3.95% 5/15/2060 Reg S (04/28/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.899, Yielding 3.95%. 5. Advocate Health Corp. (USD) 2.211% 6/15/2030 (04/28/2020): 300MM Unsecured Notes, Price at Issuance 100, Yielding 2.21%. 6. Advocate Health Corp. (USD) 3.008% 6/15/2050 (04/28/2020): 400MM Unsecured Notes, Price at Issuance 100, Yielding 3.01%. 7. Dupont de Nemours Inc. (USD) 2.169% 5/1/2023 (04/28/2020): 2000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.17%. 8. Consumers Energy Co. (USD) 2.5% 5/1/2060 (04/29/2020): 525MM Secured Notes, Price at Issuance 99.149, Yielding 2.53%. 9. NXP BV (USD) 3.15% 5/1/2027 144A (04/29/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.801, Yielding 3.18%. 10. NXP BV (USD) 2.7% 5/1/2025 144A (04/29/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.916, Yielding 2.72%. |
Additional Commentary
NEW ISSUANCE WATCH: on 04/29/2020 participants welcome a $1000MM new corporate-bond offering by Northern Trust Corp.
| Top Widening Loans | Top Narrowing Loans |
| Befesa SA (EUR) TLB E+250 07/09/2026 GCI Holdings Inc. (USD) TLB L+225 02/02/2022 PHS Group PLC (GBP) TL L+525 11/30/2021 Clay Holdco BV (EUR) TLA E+450 11/01/2025 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 |
Convergint Technologies LLC (USD) TL L+300 02/01/2025 Entertainment Properties Trust (USD) TL L+110 02/27/2023 NCL Corp. LTD (USD) TLA L+150 01/02/2024 Navios Maritime Partners LP (USD) TLB L+450 06/18/2020 AR Packaging Group (EUR) TLB E+475 08/15/2024 |
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 66 bp (basis points), as of 04/29/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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