HOPES OF A STIMULUS DEAL AND PROGRESS ON A VACCINE PUSHED MARKETS HIGHER. FEDERAL GOVERNMENT’S STIMULUS AND LIQUIDITY ARE DRIVING THESE MARKETS, NOT COMPANY FUNDAMENTALS. 10 Year Treasury notes were up 1.2 bps. S&P +1.4%, Dow +1.05%, NASDAQ +2.13%.
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Market Summaries
North American Bond Research – August 12, 2020
Posted on August 12, 2020|
HIGH YIELD BOND RESEARCH
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August 12, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 20.7 MILLION+ CASES AND 750000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.35 MILLION+ CASES AND 169000+ 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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Petrobras Global Finance BV 7.375% 1/17/2027 Eclipse Resources Corp. 8.875% 7/15/2023 Ball Corp. 2.875% 8/15/2030 Pacific Gas & Electric Co. 4.25% 3/15/2046 Ford Motor Co. 8.5% 4/21/2023 Petrobras Global Finance BV 6.85% 6/5/2115 Pacific Gas & Electric Co. 4.95% 7/1/2050 CNO Financial Group 5.25% 5/30/2025 United Rentals North AM 3.875% 2/15/2031 Occidental Petroleum Corp. 8.875% 7/15/2030 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Covanta Holding Corp. (USD) 5% 9/1/2030 (08/11/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%.
2. Albertsons Cos Safeway (USD) 3.25% 3/15/2026 144A (08/11/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.25%. 3. Windstream Escrow LLC Windstream Escrow Finance Corp. (USD) 7.75% 8/15/2028 144A (08/11/2020): 1400MM First Lien Notes, Price at Issuance 100, Yielding 7.75%. 4. Albertsons Cos Safeway (USD) 3.25% 3/15/2026 Reg S (08/11/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.25%. 5. Targa Resources Partners LP (USD) 4.875% 2/1/2031 Reg S (08/11/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%. 6. Targa Resources Partners LP (USD) 4.875% 2/1/2031 144A (08/11/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%. 7. Albertsons Cos Safeway (USD) 3.5% 3/15/2029 144A (08/11/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.5%. 8. Albertsons Cos Safeway (USD) 3.5% 3/15/2029 Reg S (08/11/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.5%. 9. Windstream Escrow LLC Windstream Escrow Finance Corp. (USD) 7.75% 8/15/2028 Reg S (08/11/2020): 1400MM First Lien Notes, Price at Issuance 100, Yielding 7.75%. 10. Clearwater Paper Corp. (USD) 4.75% 8/15/2028 144A (08/11/2020): 275MM Senior Unsecured Notes, Price at Issuance 275, Yielding -9.4%. |
1. Tutor Perini: $375MM TLB (Ba3/BB-/BB+)
2. Smart Start Inc.: $350MM TLB 3. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 4. MAG Aerospace: $290.7MM TL (B3/B) 5. Logmein Inc.: $2.45B credit facilities: $1.95B first lien TL; $500MM second-lien TL 6. Herschend Entertainment Co. LLC: $465MM TLB (B3/B) 7. CJ Foods Inc.: $285MM TLB 8. Tutor Perini: $375MM TLB (Ba3/BB-/BB+) 9. Smart Start Inc.: $350MM TLB 10. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL |
Additional Commentary
NEW ISSUANCE WATCH: Covanta Holding Corp. issued 400 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| McClatchy Co. (USD) TLA 7.795% 07/15/2030 Excelitas Technologies Corp. (EUR) TL E+350 12/04/2024 Grosvenor Capital Mgmt Hldg LLP (USD) TLB L+275 03/29/2025 American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023 Coty Inc. (EUR) TLB E+250 04/05/2025 |
Mavenir Inc. (USD) TLB L+600 05/08/2025 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 TCW Group (USD) TLB L+175 12/27/2024 Tacala LLC (USD) TLB L+350 02/05/2027 Fleetpride Corp. (USD) TL L+450 12/19/2025 |
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 16 bp (basis points), as of 08/12/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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August 12, 2020
|
Bond Markets
HOPES OF A STIMULUS DEAL AND PROGRESS ON A VACCINE PUSHED MARKETS HIGHER. FEDERAL GOVERNMENT’S STIMULUS AND LIQUIDITY ARE DRIVING THESE MARKETS, NOT COMPANY FUNDAMENTALS. 10 Year Treasury notes were up 1.2 bps. S&P +1.4%, Dow +1.05%, NASDAQ +2.13%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 20.7 MILLION+ CASES AND 750000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.35 MILLION+ CASES AND 169000+ 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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CVS Health Corp. 5.05% 3/25/2048 JPMorgan Chase & Co. 2.522% 4/22/2031 Host Hotels & Resorts LP 3.5% 9/15/2030 CVS Health Corp. 4.3% 3/25/2028 Visa Inc. 2% 8/15/2050 CVS Health Corp. 3.75% 4/1/2030 Anheuser-Busch Inbev Worldwide Inc. 4.9% 2/1/2046 AstraZeneca PLC 1.375% 8/6/2030 SYSCO Corp. 6.6% 4/1/2050 Chevron USA Inc. 0.687% 8/12/2025 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Yale-New Haven Hospital (USD) 2.496% 7/1/2050 (08/11/2020): 400MM Unsecured Notes, Price at Issuance 100, Yielding 2.5%.
2. Republic Services Inc. (USD) 1.45% 2/15/2031 (08/11/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.517, Yielding 1.5%. 3. Host Hotels & Resorts LP (USD) 3.5% 9/15/2030 (08/11/2020): 600MM Senior Unsecured Notes, Price at Issuance 98.702, Yielding 3.65%. 4. CNA Financial Corp. (USD) 2.05% 8/15/2030 (08/11/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.748, Yielding 2.08%. 5. Toyota Motor Credit Corp. (USD) 1.15% 8/13/2027 (08/11/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.953, Yielding 1.16%. 6. Toyota Motor Credit Corp. (USD) FLT% 2/14/2022 (08/11/2020): 750MM Senior Unsecured Notes, Price at Issuance 100. 7. Toyota Motor Credit Corp. (USD) 0.5% 8/14/2023 (08/11/2020): 1400MM Senior Unsecured Notes, Price at Issuance 99.923, Yielding .53%. 8. Comcast Corp. (USD) 2.45% 8/15/2052 (08/11/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.21, Yielding 2.49%. 9. Brookfield Renewable Energy Partners (CAD) 3.33% 8/13/2050 (08/11/2020): 425MM Senior Unsecured Notes, Price at Issuance 99.925, Yielding 3.33%. 10. Bell Canada (CAD) 1.65% 8/16/2027 (08/11/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.993, Yielding 1.65%. |
Additional Commentary
NEW ISSUANCE WATCH: Republic Services Inc. issued 1100 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| McClatchy Co. (USD) TLA 7.795% 07/15/2030 Excelitas Technologies Corp. (EUR) TL E+350 12/04/2024 Grosvenor Capital Mgmt Hldg LLP (USD) TLB L+275 03/29/2025 American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023 Coty Inc. (EUR) TLB E+250 04/05/2025 |
Mavenir Inc. (USD) TLB L+600 05/08/2025 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 TCW Group (USD) TLB L+175 12/27/2024 Tacala LLC (USD) TLB L+350 02/05/2027 Fleetpride Corp. (USD) TL L+450 12/19/2025 |
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 16 bp (basis points), as of 08/12/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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