INFECTION RATES HAVE STARTED TO SLOW HELPING MARKETS MOVE UP EXCEPT NASDAQ. TRUMP EXECUTIVE ORDER PROMPTS THE MARKETS TO SURMISE THAT ONE WAY OR ANOTHER WORKERS WILL GET HELP. 10 Year Treasury notes were up 12 bps. S&P +0.27%, Dow +1.30%, NASDAQ -0.39%.
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Market Summaries
North American Bond Research – August 10, 2020
Posted on August 10, 2020|
HIGH YIELD BOND RESEARCH
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August 10, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 20.2 MILLION+ CASES AND 737000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.2 MILLION+ CASES AND 166000+ DEATHS. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Hertz Corp (The) (USD) 7% 1/15/2028 made analysts’ ‘Conviction Buy’ list. (See the chart below for Hertz Corp bonds) Pierre Robert
| Key Gainers and Losers | Volume Leaders | ||||||||||||||||||||||||||||||
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Pacific Gas & Electric Co. 4.55% 7/1/2030 T-Mobile USA Inc. 3.75% 4/15/2027 144A Comstock Resources Inc. 9.75% 8/15/2026 United Rentals North AM 3.875% 2/15/2031 T-Mobile USA Inc. 3.5% 4/15/2025 144A HCA Inc. 5% 3/15/2024 T-Mobile USA Inc. 3.875% 4/15/2030 144A Ford Motor Credit Co. 3.815% 11/2/2027 MGM Resorts Intl 6.75% 5/1/2025 L Brands Inc. 7.5% 6/15/2029 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Iron Mountain Inc. (USD) 4.5% 2/15/2031 144A (08/10/2020): 1100MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.5%. | 1. CJ Foods Inc.: $285MM TLB
2. Tutor Perini: $375MM TLB (Ba3/BB-/BB+) 3. Smart Start Inc.: $350MM TLB 4. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 5. MAG Aerospace: $290.7MM TL (B3/B) 6. Logmein Inc.: $2.45B credit facilities: $1.95B first lien TL; $500MM second-lien TL 7. Windstream Holdings Inc.: $750MM TLB (B3/B) 8. Concord : $1.05B credit facilities (B1/B+): $450MM revolver; $600MM TLB 9. Tutor Perini: $375MM TLB (Ba3/BB-/BB+) 10. Smart Start Inc.: $350MM TLB |
Additional Commentary
NEW ISSUANCE WATCH: Iron Mountain Inc. issued 1100 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023 Coty Inc. (EUR) TLA E+175 04/05/2023 Albertsons LLC (USD) TLB8 L+275 08/17/2026 Eagle 4 Limited (USD) TL L+775 06/14/2027 |
Diebold Inc. (USD) RC L+350 08/30/2022 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 NCL Corp. LTD (USD) TLA L+150 01/02/2024 Autokiniton US Hldg, Inc. (USD) TLB L+575 05/22/2025 Carrols Restaurant Group (USD) TLB1 L+625 04/30/2026 |
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 16 bp (basis points), as of 08/10/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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August 10, 2020
|
Bond Markets
INFECTION RATES HAVE STARTED TO SLOW HELPING MARKETS MOVE UP EXCEPT NASDAQ. TRUMP EXECUTIVE ORDER PROMPTS THE MARKETS TO SURMISE THAT ONE WAY OR ANOTHER WORKERS WILL GET HELP. 10 Year Treasury notes were up 12 bps. S&P +0.27%, Dow +1.30%, NASDAQ -0.39%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 20.2 MILLION+ CASES AND 737000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.2 MILLION+ CASES AND 166000+ DEATHS. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Halliburton Co. (USD) 5% 11/15/2045 made analysts’ ‘Conviction Buy’ list. (See the chart below for Halliburton Co. bonds) Pierre Robert
| Key Gainers and Losers | Volume Leaders | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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BP Capital Markets America Inc. 2.772% 11/10/2050 Activision Blizzard Inc. 2.5% 9/15/2050 Pacific Gas & Electric Co. 4.55% 7/1/2030 Alphabet Inc. 2.05% 8/15/2050 Lincoln National Corp. 3.05% 1/15/2030 Alphabet Inc. 2.25% 8/15/2060 AstraZeneca PLC 1.375% 8/6/2030 Dupont de Nemours Inc. 2.169% 5/1/2023 Verizon Communications Inc. FLT% 5/15/2025 Marriott Intl Inc. 5.75% 5/1/2025 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Air Lease Corp. (USD) 2.875% 1/15/2026 (08/10/2020): 700MM Senior Unsecured Notes, Price at Issuance 98.972, Yielding 3.08%.
2. Chevron USA Inc. (USD) FLT% 8/11/2023 (08/10/2020): 500MM Senior Unsecured Notes, Price at Issuance 100. 3. Chevron USA Inc. (USD) FLT% 8/12/2022 (08/10/2020): 350MM Senior Unsecured Notes, Price at Issuance 100. 4. Bunge LTD Finance Corp. (USD) 1.63% 8/17/2025 (08/10/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.995, Yielding 1.63%. 5. Kimco Realty Corp. (USD) 1.9% 3/1/2028 (08/10/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.554, Yielding 1.96%. 6. Great-West Lifeco Inc. (USD) 0.904% 8/12/2025 144A (08/10/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding .9%. 7. Visa Inc. (USD) 2% 8/15/2050 (08/10/2020): 1750MM Senior Unsecured Notes, Price at Issuance 98.928, Yielding 2.05%. 8. Ecolab Inc. (USD) 1.3% 1/30/2031 (08/10/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.942, Yielding 1.31%. 9. Ecolab Inc. (USD) 2.125% 8/15/2050 (08/10/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.121, Yielding 2.16%. 10. Chevron USA Inc. (USD) 1.018% 8/12/2027 (08/10/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.02%. |
Additional Commentary
NEW ISSUANCE WATCH: Air Lease Corp. issued 2000 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023 Coty Inc. (EUR) TLA E+175 04/05/2023 Albertsons LLC (USD) TLB8 L+275 08/17/2026 Eagle 4 Limited (USD) TL L+775 06/14/2027 |
Diebold Inc. (USD) RC L+350 08/30/2022 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 NCL Corp. LTD (USD) TLA L+150 01/02/2024 Autokiniton US Hldg, Inc. (USD) TLB L+575 05/22/2025 Carrols Restaurant Group (USD) TLB1 L+625 04/30/2026 |
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 16 bp (basis points), as of 08/10/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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