EUROPEAN MARKETS DOWN AS TRUMP CHOOSES TO KEEP TARIFFS ON AIRBUS AND DURABLE GOODS IN PLACE. US MARKETS ALSO DOWN AS US TREASURIES AND CORPORATE BOND PRIMARY OFFERINGS STRUGGLES TO FILL. 10 Year Treasury notes were up 4.6 bps. S&P -0.2%, Dow -0.29%, NASDAQ +0.27%.
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Market Summaries
North American Bond Research – August 13, 2020
Posted on August 13, 2020|
HIGH YIELD BOND RESEARCH
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August 13, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 21 MILLION+ CASES AND 751000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.4 MILLION+ CASES AND 170000+ 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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Eclipse Resources Corp. 8.875% 7/15/2023 T-Mobile USA Inc. 3.875% 4/15/2030 144A Ball Corp. 2.875% 8/15/2030 T-Mobile USA Inc. 3.5% 4/15/2025 144A T-Mobile USA Inc. 3.75% 4/15/2027 144A Pacific Gas & Electric Co. 4.55% 7/1/2030 Petrobras Global Finance BV 6.85% 6/5/2115 Ford Motor Co. 8.5% 4/21/2023 CDW LLC CDW Finance Corp. 3.25% 2/15/2029 Service Corp. Intl. 3.375% 8/15/2030 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Firstcash Inc. (USD) 4.625% 9/1/2028 144A (08/12/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%.
2. Occidental Petroleum Corp. (USD) 6.625% 9/1/2030 (08/12/2020): 1500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.63%. 3. Occidental Petroleum Corp. (USD) 6.375% 9/1/2028 (08/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%. 4. Occidental Petroleum Corp. (USD) 5.875% 9/1/2025 (08/12/2020): 900MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.88%. 5. Booz Allen Hamilton Inc. (USD) 3.875% 9/1/2028 144A (08/12/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 6. Firstcash Inc. (USD) 4.625% 9/1/2028 Reg S (08/12/2020): 100MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%. 7. Booz Allen Hamilton Inc. (USD) 3.875% 9/1/2028 Reg S (08/12/2020): 100MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 8. Black Knight InfoServ LLC (USD) 3.625% 9/1/2028 144A (08/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.63%. 9. Black Knight InfoServ LLC (USD) 3.625% 9/1/2028 Reg S (08/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.63%. 10. ANGI Homeservices Inc. (USD) 3.875% 8/15/2028 144A (08/13/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. |
1. Smart Start Inc.: $350MM TLB
2. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 3. MAG Aerospace: $290.7MM TL (B3/B) 4. Logmein Inc.: $2.45B credit facilities: $1.95B first lien TL; $500MM second-lien TL 5. Herschend Entertainment Co. LLC: $465MM TLB (B3/B) 6. CJ Foods Inc.: $285MM TLB 7. Tutor Perini: $375MM TLB (Ba3/BB-/BB+) 8. Herschend Entertainment Co. LLC: $465MM TLB (B3/B) 9. Logmein Inc.: $2.45B credit facilities: $1.95B first lien TL; $500MM second-lien TL 10. MAG Aerospace: $290.7MM TL (B3/B) |
Additional Commentary
NEW ISSUANCE WATCH: Firstcash Inc. issued 500 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Halcon Resources Corp. (USD) RC L+375 05/27/2021 Deoleo SA (EUR) TL2 E+675 06/12/2022 Herbalife LTD (USD) TLB L+325 08/16/2025 Albertsons LLC (USD) TLB8 L+275 08/17/2026 Mavenir Inc. (USD) TLB L+600 05/08/2025 |
NCR Corp. (USD) DDB L+250 08/28/2026 Wynn Resorts LTD. (USD) TL L+170 07/24/2025 NCL Corp. LTD (USD) TLA L+150 01/02/2024 Sequa Corp. (USD) TLB L+500 11/28/2021 Sound Inpatient Physicians Inc. (USD) RC 06/28/2023 |
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 17 bp (basis points), as of 08/13/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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August 13, 2020
|
Bond Markets
EUROPEAN MARKETS DOWN AS TRUMP CHOOSES TO KEEP TARIFFS ON AIRBUS AND DURABLE GOODS IN PLACE. US MARKETS ALSO DOWN AS US TREASURIES AND CORPORATE BOND PRIMARY OFFERINGS STRUGGLES TO FILL. 10 Year Treasury notes were up 4.6 bps. S&P -0.2%, Dow -0.29%, NASDAQ +0.27%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 21 MILLION+ CASES AND 751000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.4 MILLION+ CASES AND 170000+ 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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Alphabet Inc. 1.1% 8/15/2030 Comcast Corp. 1.5% 2/15/2031 Boeing Co. 5.805% 5/1/2050 Regeneron Pharmaceuticals Inc. 2.8% 9/15/2050 Host Hotels & Resorts LP 3.5% 9/15/2030 Wells Fargo Bank NA 3.625% 10/22/2021 Marriott Intl Inc. 5.75% 5/1/2025 Comcast Corp. 2.65% 8/15/2062 Sumitomo Mitsui Fin Grp Inc. 2.13% 7/8/2030 Alphabet Inc. 0.8% 8/15/2027 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. CVS Health Corp (USD) 2.7% 8/21/2040 (08/12/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.954, Yielding 2.7%.
2. Agree LP (USD) 2.9% 10/1/2030 (08/12/2020): 350MM Senior Unsecured Notes, Price at Issuance 99.927, Yielding 2.91%. 3. Public Service Co. Of New Hampshire (USD) 2.4% 9/1/2050 (08/12/2020): 150MM Secured Notes, Price at Issuance 99.152, Yielding 2.44%. 4. Marriott International Inc. (USD) 3.5% 10/15/2032 (08/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.278, Yielding 3.57%. 5. CVS Health Corp (USD) 1.75% 8/21/2030 (08/12/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.836, Yielding 1.77%. 6. Public Service Enterprise Group (USD) 0.8% 8/15/2025 (08/12/2020): 550MM Senior Unsecured Notes, Price at Issuance 99.775, Yielding .85%. 7. Public Service Enterprise Group (USD) 1.6% 8/15/2030 (08/12/2020): 550MM Senior Unsecured Notes, Price at Issuance 99.816, Yielding 1.62%. 8. NiSource Inc. (USD) 0.95% 8/15/2025 (08/12/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.752, Yielding 1%. 9. CVS Health Corp (USD) 1.3% 8/21/2027 (08/12/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.72, Yielding 1.34%. 10. Ford Motor Credit Co. (USD) 3.37% 11/17/2023 (08/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.988, Yielding 3.37%. |
Additional Commentary
NEW ISSUANCE WATCH: Marriott International Inc. issued 1100 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Halcon Resources Corp. (USD) RC L+375 05/27/2021 Deoleo SA (EUR) TL2 E+675 06/12/2022 Herbalife LTD (USD) TLB L+325 08/16/2025 Albertsons LLC (USD) TLB8 L+275 08/17/2026 Mavenir Inc. (USD) TLB L+600 05/08/2025 |
NCR Corp. (USD) DDB L+250 08/28/2026 Wynn Resorts LTD. (USD) TL L+170 07/24/2025 NCL Corp. LTD (USD) TLA L+150 01/02/2024 Sequa Corp. (USD) TLB L+500 11/28/2021 Sound Inpatient Physicians Inc. (USD) RC 06/28/2023 |
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 17 bp (basis points), as of 08/13/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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