Grid IconAll Posts Market Summaries

North American Bond Research – August 20, 2020

Posted on August 20, 2020
HIGH YIELD BOND RESEARCH
August 20, 2020
Bond Markets

MARKETS UP DESPITE OVER 1 MILLION PEOPLE FILING FOR  UNEMPLOYMENT THIS WEEK. WALL STREET AND MAINSTREET DIVERGING IS PERPLEXING. EUROPE’S MARKETS WERE DOWN IN RESPONSE TO THESE BAD NUMBERS. 10 Year Treasury notes were down 3.1 bps. S&P +0.32%, Dow +0.72%, NASDAQ +1.06%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 22.8 MILLION+ CASES AND 795000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.73 MILLION+ CASES AND 177000+ DEATHS.  Among high-grade bonds showing topmost price gains at appreciable volumes traded, Hertz Corp (The) (USD) 7% 1/15/2028made analysts’ ‘Conviction Buy’ list. (See the chart below for Hertz Corp  bonds) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Vale Overseas LTD 3.75% 7/8/2030 +0.3%
Pacific Gas & Electric Co. 4.25% 8/1/2023 +0.2%
L Brands Inc. 7.5% 6/15/2029 +2.7%
HCA Inc. 5.375% 2/1/2025 +0.3%
Delta Airlines 7.375% 1/15/2026 +0.7%
–   Cheniere Corpus Christi Hldgs LLC 5.125% 6/30/2027 -0.4%
Eclipse Resources Corp. 8.875% 7/15/2023 -1.9%
L Brands Inc. 6.875% 11/1/2035 -0.1%
Pacific Gas & Electric Co. 2.95% 3/1/2026 -0.2%
Vereit Operating Partnership 4.875% 6/1/2026 -0.0%
Cheniere Corpus Christi Hldgs LLC   5.125% 6/30/2027
Eclipse Resources Corp.   8.875% 7/15/2023
L Brands Inc.   6.875% 11/1/2035
Pacific Gas & Electric Co.   2.95% 3/1/2026
Vale Overseas LTD   3.75% 7/8/2030
Vereit Operating Partnership   4.875% 6/1/2026
Pacific Gas & Electric Co.   4.25% 8/1/2023
Pacific Gas & Electric Co.   4.55% 7/1/2030
L Brands Inc.   7.5% 6/15/2029
Occidental Petroleum Corp.   4.625% 6/15/2045
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.03% -0.22% 2.20% 6.68% 5.10% 8.73%
Mining 0.03% -0.81% 4.29% 20.17% -11.02% -6.09%
Construction 0.02% -0.12% 1.33% 8.47% 2.15% 5.89%
Manufacturing -0.02% -0.56% 2.15% 9.68% 1.51% 6.39%
Transportion, Communication, Electric/Gas 0.01% -0.55% 1.51% 6.38% 3.49% 6.59%
Wholesale -0.00% -0.06% 2.50% 8.78% 2.08% 6.11%
Retail -0.03% -0.22% 3.30% 11.94% 0.79% 4.86%
Finance, Insurance, Real-Estate 0.00% -0.31% 2.59% 10.28% 1.33% 4.99%
Services -0.02% -0.39% 2.54% 8.56% 1.72% 6.55%
Public Administration 0.02% -0.26% 3.96% 11.26% 5.83% 8.78%
Energy -0.01% -0.75% 4.33% 18.76% -8.51% -3.95%
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. Wynn Macau LTD (USD) 5.625% 8/26/2028 144A (08/19/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.63%.

2. Pike Corp. (USD) 5.5% 9/1/2028 144A (08/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%.

3. Pike Corp. (USD) 5.5% 9/1/2028 Reg S (08/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%.

4. NEW Fortress Energy Inc. (USD) 6.75% 9/15/2025 144A (08/19/2020): 1000MM Secured Notes, Price at Issuance 100, Yielding 6.75%.

5. Genworth Mortgage Hldg Inc. (USD) 6.5% 8/15/2025 144A (08/19/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.5%.

6. NEW Fortress Energy Inc. (USD) 6.75% 9/15/2025 Reg S (08/19/2020): 1000MM Secured Notes, Price at Issuance 100, Yielding 6.75%.

7. Genworth Mortgage Hldg Inc. (USD) 6.5% 8/15/2025 Reg S (08/19/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.5%.

1. Avianca : $1.3B DIP DD TLB

2. UPC/Sunrise: $2.4B term loans (B1/BB-/BB+): $1.2B TLB1; $1.2B TLB2

3. MAG Aerospace: $290.7MM TL (B3/B)

4. CJ Foods Inc.: $285MM TLB

5. CJ Foods Inc.: $285MM TLB

6. Herschend Entertainment Co. LLC: $465MM TLB (B3/B)

7. UPC/Sunrise: $2.4B term loans (B1/BB-/BB+): $1.2B TLB1; $1.2B TLB2

8. Pike Corp.: $336MM TLB (Ba3/BB-)

9. MAG Aerospace: $290.7MM TL (B3/B)

10. CJ Foods Inc.: $285MM TLB

Additional Commentary

NEW ISSUANCE WATCH: Wynn Macau LTDissued 600 MM in notes.
Top Widening Loans Top Narrowing Loans
Wittur (EUR) TL E+850 09/19/2027
American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023
Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023
EG Group (USD) TLB L+400 02/06/2025
Epic Y-Grade (USD) TLB L+600 06/13/2024
Wynn Resorts LTD. (USD) TL L+170 07/24/2025
Mavenir Inc. (USD) TLB L+600 05/08/2025
Deoleo SA (EUR) TL2 E+675 06/12/2022
Jazz Securities LTD (USD) TLA 06/07/2023
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 08/20/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
August 20, 2020
Bond Markets

MARKETS UP DESPITE OVER 1 MILLION PEOPLE FILING FOR  UNEMPLOYMENT THIS WEEK. WALL STREET AND MAINSTREET DIVERGING IS PERPLEXING. EUROPE’S MARKETS WERE DOWN IN RESPONSE TO THESE BAD NUMBERS. 10 Year Treasury notes were down 3.1 bps. S&P +0.32%, Dow +0.72%, NASDAQ +1.06%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 22.8 MILLION+ CASES AND 795000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5.73 MILLION+ CASES AND 177000+ 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
+   Chevron Corp. 1.554% 5/11/2025 +0.1%
  General Motors Financial Co. Inc. 1.7% 8/18/2023 +0.1%
  AT&T Inc. 1.65% 2/1/2028 +0.1%
  Gilead Sciences Inc. 4.15% 3/1/2047 +0.1%
  Alphabet Inc. 2.05% 8/15/2050 +0.5%
–   Comcast Corp. 3.1% 4/1/2025 -0.0%
  Eli Lilly & Co. 2.25% 5/15/2050 -0.1%
  Activision Blizzard Inc. 1.35% 9/15/2030 -1.1%
  Pacific Gas & Electric Co. 3.5% 8/1/2050 -0.5%
  Dupont de Nemours Inc. 2.169% 5/1/2023 -0.0%
Chevron Corp.   1.554% 5/11/2025
Comcast Corp.   3.1% 4/1/2025
General Motors Financial Co. Inc.   1.7% 8/18/2023
AT&T Inc.   1.65% 2/1/2028
Eli Lilly & Co.   2.25% 5/15/2050
Activision Blizzard Inc.   1.35% 9/15/2030
Dow Chemical Co.   3.6% 11/15/2050
Gilead Sciences Inc.   4.15% 3/1/2047
Alphabet Inc.   2.05% 8/15/2050
Oracle Corp.   3.6% 4/1/2050
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Mining 0.01% -0.48% 1.70% 9.97% 5.91% 7.21%
Construction 0.09% -0.18% 1.12% 7.26% 7.09% 6.92%
Manufacturing 0.01% -0.68% 0.21% 5.17% 7.00% 7.97%
Transportion, Communication, Electric/Gas -0.02% -0.88% 0.02% 6.57% 8.61% 9.46%
Wholesale -0.03% -0.44% 0.84% 6.86% 6.25% 9.06%
Retail 0.03% -0.90% -0.39% 4.83% 8.15% 9.75%
Finance, Insurance, Real-Estate -0.02% -0.35% 0.50% 4.86% 6.04% 7.20%
Services 0.03% -0.59% 0.18% 5.37% 6.59% 7.47%
Public Administration 0.00% 0.04% 0.10% 0.58% 4.49% 3.74%
Energy 0.00% -0.55% 1.21% 9.34% 4.81% 6.51%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Hanover Insurance Group Inc. (USD) 2.5% 9/1/2030 (08/19/2020): 300MM Senior Unsecured Notes, Price at Issuance 99.868, Yielding 2.51%.

2. Florida Power & Light (USD) FLT% 8/24/2070 (08/19/2020): 145MM Senior Unsecured Notes, Price at Issuance 100.

3. Hackensack Meridian Health (USD) 2.875% 9/1/2050 (08/19/2020): 500MM Secured Notes, Price at Issuance 100, Yielding 2.88%.

4. Hackensack Meridian Health (USD) 2.675% 9/1/2041 (08/19/2020): 500MM Secured Notes.

5. THE Methodist Hospital (USD) 2.705% 12/1/2050 (08/19/2020): 530MM Unsecured Notes, Price at Issuance 100, Yielding 2.71%.

6. Enstar Finance Company LLC (USD) VAR% 9/1/2040 (08/19/2020): 350MM Junior Subordinated Notes, Price at Issuance 100.

7. John D. And Catherine T. Macarthur Foundation (USD) 1.299% 12/1/2030 (08/20/2020): 125MM Unsecured Notes, Price at Issuance 100, Yielding 1.3%.

8. Principal Life Global Fund II (USD) 1.5% 8/27/2030 144A (08/20/2020): 400MM Secured Notes, Price at Issuance 99.391, Yielding 1.57%.

9. Principal Life Global Fund II (USD) 1.5% 8/27/2030 Reg S (08/20/2020): 400MM Secured Notes, Price at Issuance 99.391, Yielding 1.57%.

10. Children’S National Hospital (USD) 2.928% 7/15/2050 (08/20/2020): 300MM Unsecured Notes, Price at Issuance 100, Yielding 2.93%.

Additional Commentary

NEW ISSUANCE WATCH:  Hanover Insurance Group Inc. issued 300 MM in notes.
Top Widening Loans Top Narrowing Loans
Wittur (EUR) TL E+850 09/19/2027
American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023
Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023
EG Group (USD) TLB L+400 02/06/2025
Epic Y-Grade (USD) TLB L+600 06/13/2024
Wynn Resorts LTD. (USD) TL L+170 07/24/2025
Mavenir Inc. (USD) TLB L+600 05/08/2025
Deoleo SA (EUR) TL2 E+675 06/12/2022
Jazz Securities LTD (USD) TLA 06/07/2023
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 08/20/2020
  • 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.


Disclaimer: The information on this blog site is for informational purposes only.  Advantage Data makes no representations as to the accuracy, completeness, suitability, or validity, of any information. Advantage Data will not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. All information is provided AS-IS with no warranties and confers no rights. Information is not and should not be considered professional financial investment advice. In all events, Advantage Data is not a broker-dealer, shall not operate as a broker or a dealer, is not holding itself out as a broker or dealer and is not engaged in the business of buying or selling securities or otherwise required to register with the National Association of Securities Dealers.


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 300,000+ BDC fair value assessments dating back to 2000
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 15 products and services from debt 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