Grid IconAll Posts Market Summaries

North American Bond Research – April 7, 2020

Posted on April 7, 2020
HIGH YIELD BOND RESEARCH
April 7, 2020
Bond Markets

MARKETS STARTED WAY UP DUE TO THE HUGE GAINS FROM YESTERDAY. But by midday, ad more cases and deaths were reported, reality set in that we have a long way to go before this is over. The market ended slightly lower. 10 Year Treasury notes were up 6 basis points. S&P -0.16%, Dow -0.12%, NASDAQ -0.33%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 1450000+ CASES AND 81000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 365000+ CASES AND 13000+ 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
+   General Motors Co. 6.25% 10/2/2043 +3.1%
  Intelsat Jackson Hldg SA 5.5% 8/1/2023 (1) +7.1%
  Continental Res Inc. 4.5% 4/15/2023 +18.4%
  Continental Res Inc. 5% 9/15/2022 +11.9%
  Micron Technology Inc. 4.663% 2/15/2030 +0.3%
–   Intelsat Luxembourg SA 8.125% 6/1/2023 -9.5%
  Infor US Inc. 6.5% 5/15/2022 -0.0%
  Sally Hldg LLC 5.625% 12/1/2025 -1.9%
  Plains All American Pipeline LP 4.65% 10/15/2025 -0.4%
  Ford Motor Credit Co. 5.596% 1/7/2022 -0.5%
General Motors Co.   6.25% 10/2/2043
Intelsat Jackson Hldg SA   5.5% 8/1/2023 (1)
Continental Res Inc.   4.5% 4/15/2023
Continental Res Inc.   5% 9/15/2022
Micron Technology Inc.   4.663% 2/15/2030
Petrobras Global Finance BV   7.375% 1/17/2027
Intelsat Luxembourg SA   8.125% 6/1/2023
Cenovus Energy Inc.   3% 8/15/2022
Expedia Inc.   3.8% 2/15/2028 (1)
Sabine Pass Liquefaction LLC   5.625% 2/1/2021 (1)
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.01% 1.77% -11.50% -11.92% -11.36% -0.46%
Mining 0.73% -0.18% -34.40% -39.23% -38.77% -31.10%
Construction -0.10% -0.16% -12.47% -10.53% -10.47% -0.56%
Manufacturing 0.02% -0.62% -11.94% -11.19% -10.81% -2.28%
Transportion, Communication, Electric/Gas 0.22% -0.22% -11.90% -10.83% -10.58% -1.87%
Wholesale -0.04% 0.00% -13.82% -14.06% -13.68% -5.94%
Retail -0.13% -1.30% -16.34% -16.29% -16.08% -3.78%
Finance, Insurance, Real-Estate -0.04% -0.20% -12.27% -11.60% -11.33% -2.29%
Services 0.00% -1.05% -12.01% -11.87% -11.65% -2.45%
Public Administration 0.13% 3.22% -15.04% -12.43% -12.59% -4.26%
Energy 0.83% 0.89% -34.50% -38.79% -38.15% -31.68%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. LifePoint Health Inc (USD) 6.75% 4/15/2025 144A (04/07/2020): 600MM First Lien Notes, Price at Issuance 100, Yielding 6.75%. 1. AVI-SPL: $370MM covenant lite TLB (B2/B)

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

3. CJ Foods Inc.: $285MM TLB

4. Cornerstone Ondemand Inc.: $1.135MM senior secured credit facilities: $150MM revolver; $985MM TLB

5. Eldorado Resorts Inc./Caesars Entertainment Corp.: $6.4B credit facilities:$1B revolver at Eldorados; $3B seven-year cove-lite TLB due 2027 at Eldorado; $2.4B seven-year cove-lite TLB due 2027 at Caesars Resorts Collection

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

Additional Commentary

NEW ISSUANCE WATCH: LifePoint Health issued $600MM debt on 4/7/2020.
Top Widening Loans Top Narrowing Loans
Jostens Inc. (USD) TL L+550 12/21/2025
Institutional Shareholder Services Inc. (USD) TL L+450 03/05/2026
GVC Holdings PLC (USD) TLB L+225 03/16/2024
Eaglepicher Inc. (USD) TL L+725 03/09/2026
Core & Main LP (USD) TLB L+300 08/01/2024
Bombardier Recreational Products Inc. (USD) TLB L+200 05/07/2025
Verisure Holding AB (EUR) TLB1E E+300 10/21/2022
Atlantic Aviation Fbo Inc. (USD) TLB L+375 12/06/2025
Element Materials Technology Group (USD) TLB L+350 06/05/2024
DTZ US Borrower LLC (USD) TLB L+275 08/21/2025

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  127 bp (basis points), as of 04/7/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
April 7, 2020
Bond Markets

MARKETS STARTED WAY UP DUE TO THE HUGE GAINS FROM YESTERDAY. BUT BY MIDDAY AS MORE CASES AND DEATHS WERE REPORTED, REALITY SET IN THAT WE HAVE A LONG WAY TO GO BEFORE THIS IS OVER. THE MARKET ENDED SLIGHTLY LOWER. 10 Year Treasury notes were down 4 basis points. S&P -0.16%, Dow -0.12%, NASDAQ -0.33%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 1450000+ CASES AND 81000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 365000+ CASES AND 13000+ DEATHS. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Baker Hughes Inc. (USD) 4.08% 12/15/2047 made analysts’ ‘Conviction Buy’ list. (See the chart below for Baker Hughes Inc. bonds) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Oracle Corp. 3.6% 4/1/2050 +2.0%
  FedEx Corp. 3.8% 5/15/2025 +1.3%
  Oracle Corp. 2.5% 4/1/2025 +0.7%
  Anheuser-Busch Inbev Worldwide Inc. 4.5% 6/1/2050 +1.5%
  VMWARE Inc. 4.7% 5/15/2030 +0.9%
–   Mastercard Inc. 3.35% 3/26/2030 -1.8%
  Walt Disney Co. 3.8% 3/22/2030 -0.6%
  Intel Corp. 4.95% 3/25/2060 -0.8%
  Coca-Cola Co. 3.45% 3/25/2030 -0.0%
  National Bank of Canada 2.2% 11/2/2020 -0.0%
Oracle Corp.   3.6% 4/1/2050
Oracle Corp.   2.5% 4/1/2025
FedEx Corp.   3.8% 5/15/2025
Anheuser-Busch Inbev Worldwide Inc.   4.5% 6/1/2050
VMWARE Inc.   4.7% 5/15/2030
Oracle Corp.   3.85% 4/1/2060
Royal Bank of Canada   2.25% 11/1/2024
Goldman Sachs Group Inc.   3.5% 4/1/2025
Wells Fargo & Co.   VAR% 2/11/2031
Oracle Corp.   3.6% 4/1/2040
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.14% 0.62% -5.37% -1.36% -1.18% 3.79%
Mining 0.55% 1.64% -16.86% -14.51% -14.09% -3.04%
Construction -0.20% 0.15% -10.68% -6.55% -5.97% 2.82%
Manufacturing -0.09% 0.15% -6.34% -2.13% -1.74% 7.05%
Transportion, Communication, Electric/Gas -0.01% 0.79% -8.53% -3.41% -2.82% 7.46%
Wholesale 0.01% -0.34% -8.26% -4.93% -4.64% 4.20%
Retail -0.06% 0.36% -6.76% -2.32% -1.90% 7.45%
Finance, Insurance, Real-Estate -0.05% 0.37% -5.57% -2.22% -1.91% 5.42%
Services -0.11% -0.09% -6.63% -2.10% -1.76% 7.39%
Public Administration -0.10% 0.09% 0.17% 3.13% 3.31% 6.18%
Energy 0.32% 1.51% -16.20% -13.94% -13.51% -3.86%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Sinai Health System (CAD) 3.209% 4/8/2060 (04/06/2020): 200MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.21%.

2. Burlingtn NTHN San (USD) 3.05% 2/15/2051 (04/06/2020): 575MM Senior Unsecured Notes, Price at Issuance 99.171, Yielding 3.09%.

3. Tucson Electric Power Co. (USD) 4% 6/15/2050 (04/06/2020): 350MM Senior Unsecured Notes, Price at Issuance 99.138, Yielding 4.05%.

4. Analog Devices Inc. (USD) 2.95% 4/1/2025 (04/06/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.496, Yielding 3.06%.

5. Mitsubishi Ufj Lease&Fin (USD) 3.637% 4/13/2025 (04/06/2020): 450MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.64%.

6. Pacificorp (USD) 3.3% 3/15/2051 (04/06/2020): 600MM Secured Notes, Price at Issuance 99.176, Yielding 3.34%.

7. BMW US Capital LLC (USD) 4.15% 4/9/2030 (04/06/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.854, Yielding 4.17%.

8. BMW US Capital LLC (USD) 3.8% 4/6/2023 (04/06/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.897, Yielding 3.84%.

9. Pacificorp (USD) 2.7% 9/15/2030 (04/06/2020): 400MM Secured Notes, Price at Issuance 99.82, Yielding 2.72%.

10. BMW US Capital LLC (USD) 3.9% 4/9/2025 144A (04/06/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.829, Yielding 3.94%.

 

 

(None Current 04/07/2020)
Additional Commentary

NEW ISSUANCE WATCH: on 04/03/2020 participants welcome a $4500MM new corporate-bond offering by BMW US Capital LLC.
Top Widening Loans Top Narrowing Loans
Jostens Inc. (USD) TL L+550 12/21/2025
Institutional Shareholder Services Inc. (USD) TL L+450 03/05/2026
GVC Holdings PLC (USD) TLB L+225 03/16/2024
Eaglepicher Inc. (USD) TL L+725 03/09/2026
Core & Main LP (USD) TLB L+300 08/01/2024
Bombardier Recreational Products Inc. (USD) TLB L+200 05/07/2025
Verisure Holding AB (EUR) TLB1E E+300 10/21/2022
Atlantic Aviation Fbo Inc. (USD) TLB L+375 12/06/2025
Element Materials Technology Group (USD) TLB L+350 06/05/2024
DTZ US Borrower LLC (USD) TLB L+275 08/21/2025

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 131 bp (basis points), as of 04/6/2020
  • 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