DOLLAR POPPED AND MARKETS WERE DOWN TODAY AS THE FED TAKES A WAIT AND SEE ATTITUDE AND KEPT RATES UNCHANGED. GOLD, SILVER, BITCOIN AND OIL WERE ALL DOWN DUE TO THE POP IN THE DOLLAR. 10 Year Treasury notes were down 1.4 bps. S&P -0.44%, Dow -0.31%, NASDAQ -0.57%.
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Market Summaries
North American Bond Research – August 19, 2020
Posted on August 19, 2020|
HIGH YIELD BOND RESEARCH
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August 19, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 22.5 MILLION+ CASES AND 787000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.7 MILLION+ CASES AND 176000+ 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 Ball Corp. 2.875% 8/15/2030 Ally Financial Inc. 3.875% 5/21/2024 CBL & Associates LP 5.25% 12/1/2023 Petrobras Global Finance BV 8.75% 5/23/2026 Petrobras Global Finance BV 6.85% 6/5/2115 Teva Pharmaceuticals Fin BV 6.75% 3/1/2028 Pacific Gas & Electric Co. 4.95% 7/1/2050 Howmet Aerospace Inc. 6.875% 5/1/2025 Vale Overseas LTD 6.25% 8/10/2026 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Southwestern Energy Co. (USD) 8.375% 9/15/2028 (08/18/2020): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8.38%.
2. Range Resources Corp. (USD) 9.25% 2/1/2026 (08/18/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 9.25%. 3. HAT Hldg I LLC Hat Hldg II LLC (USD) 3.75% 9/15/2030 144A (08/18/2020): 375MM Senior Unsecured Notes, Price at Issuance 99, Yielding 3.87%. 4. HAT Hldg I LLC Hat Hldg II LLC (USD) 3.75% 9/15/2030 Reg S (08/18/2020): 375MM Senior Unsecured Notes, Price at Issuance 99, Yielding 3.87%. 5. ON Semiconductor Corp. (USD) 3.875% 9/1/2028 144A (08/18/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 6. iStar Inc. (USD) 5.5% 2/15/2026 (08/18/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%. 7. ON Semiconductor Corp. (USD) 3.875% 9/1/2028 Reg S (08/18/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. |
1. CJ Foods Inc.: $285MM TLB
2. Herschend Entertainment Co. LLC: $465MM TLB (B3/B) 3. UPC/Sunrise: $2.4B term loans (B1/BB-/BB+): $1.2B TLB1; $1.2B TLB2 4. Pike Corp.: $336MM TLB (Ba3/BB-) 5. MAG Aerospace: $290.7MM TL (B3/B) 6. CJ Foods Inc.: $285MM TLB 7. Herschend Entertainment Co. LLC: $465MM TLB (B3/B) 8. UPC/Sunrise: $2.4B term loans (B1/BB-/BB+): $1.2B TLB1; $1.2B TLB2 9. MAG Aerospace: $290.7MM TL (B3/B) 10. Logmein Inc.: $2.45B credit facilities: $1.95B first lien TL; $500MM second-lien TL |
Additional Commentary
NEW ISSUANCE WATCH: HAT Hldg I LLC Hat Hldg II issued 375 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| PDC Brands (USD) TLB L+475 06/29/2024 API Technologies Corp. (USD) TL L+425 05/09/2026 Lightstone Holdco LLC (USD) TLB L+375 01/30/2024 LogMeIn Inc. (USD) TLB L+475 08/14/2027 Web.com Group Inc. (USD) TL2 L+775 09/17/2026 |
Fleetpride Corp. (USD) TL L+450 12/19/2025 Tacala LLC (USD) TLB L+350 02/05/2027 American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023 Wynn Resorts LTD. (USD) TL L+170 07/24/2025 Kindercare Education LLC (USD) TL L+825 08/16/2025 |
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 08/19/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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August 19, 2020
|
Bond Markets
DOLLAR POPPED AND MARKETS WERE DOWN TODAY AS THE FED TAKES A WAIT AND SEE ATTITUDE AND KEPT RATES UNCHANGED. GOLD, SILVER, BITCOIN AND OIL WERE ALL DOWN DUE TO THE POP IN THE DOLLAR. 10 Year Treasury notes were down 1.4 bps. S&P -0.44%, Dow -0.31%, NASDAQ -0.57%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 22.5 MILLION+ CASES AND 787000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.7 MILLION+ CASES AND 176000+ 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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Dow Chemical Co. 3.6% 11/15/2050 Oracle Corp. 3.6% 4/1/2050 Alphabet Inc. 2.25% 8/15/2060 Biogen Inc. 3.15% 5/1/2050 Santander UK Group Hldg PLC VAR% 8/21/2026 Cummins Inc. 1.5% 9/1/2030 Anthem Inc. 3.125% 5/15/2050 JPMorgan Chase & Co. VAR% 4/22/2051 Regeneron Pharmaceuticals Inc. 2.8% 9/15/2050 Alphabet Inc. 0.45% 8/15/2025 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Roper Technologies Inc. (USD) 1.4% 9/15/2027 (08/18/2020): 700MM Senior Unsecured Notes, Price at Issuance 99.86, Yielding 1.42%.
2. Roper Technologies Inc. (USD) 1.75% 2/15/2031 (08/18/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.839, Yielding 1.77%. 3. Community Health Network, Inc. (USD) 3.099% 5/1/2050 (08/18/2020): 449MM Unsecured Notes, Price at Issuance 100, Yielding 3.1%. 4. Roper Technologies Inc. (USD) 0.45% 8/15/2022 (08/18/2020): 300MM Senior Unsecured Notes, Price at Issuance 99.913, Yielding .49%. 5. Roper Technologies Inc. (USD) 1% 9/15/2025 (08/18/2020): 700MM Senior Unsecured Notes, Price at Issuance 99.868, Yielding 1.03%. 6. Athene Global Funding (USD) 2.45% 8/20/2027 (08/18/2020): 550MM Secured Notes, Price at Issuance 99.866, Yielding 2.47%. 7. Retail Properties of America (USD) 4.75% 9/15/2030 (08/18/2020): 400MM Senior Unsecured Notes, Price at Issuance 98.684, Yielding 4.92%. 8. Globe Life Inc. (USD) 2.15% 8/15/2030 (08/18/2020): 350MM Senior Unsecured Notes, Price at Issuance 99.822, Yielding 2.17%. 9. KKR Group Finance Co. VII LLC (USD) 3.5% 8/25/2050 144A (08/18/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.1, Yielding 3.55%. 10. Athene Global Funding (USD) 2.45% 8/20/2027 Reg S (08/18/2020): 550MM Secured Notes, Price at Issuance 99.866, Yielding 2.47%. |
Additional Commentary
NEW ISSUANCE WATCH: Roper Technologies Inc. issued 2700 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| PDC Brands (USD) TLB L+475 06/29/2024 API Technologies Corp. (USD) TL L+425 05/09/2026 Lightstone Holdco LLC (USD) TLB L+375 01/30/2024 LogMeIn Inc. (USD) TLB L+475 08/14/2027 Web.com Group Inc. (USD) TL2 L+775 09/17/2026 |
Fleetpride Corp. (USD) TL L+450 12/19/2025 Tacala LLC (USD) TLB L+350 02/05/2027 American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023 Wynn Resorts LTD. (USD) TL L+170 07/24/2025 Kindercare Education LLC (USD) TL L+825 08/16/2025 |
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 08/19/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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