GOOD NEWS ON THE VACCINE FRONT, STRONG EARNINGS AND TENSIONS LESSENING BETWEEN CHINA AND USA DROVE GLOBAL MARKETS HIGHER. 10 Year Treasury notes were up .6 bps. S&P +1.02%, Dow +0.3%, NASDAQ +1.73%.
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Market Summaries
North American Bond Research – August 26, 2020
Posted on August 26, 2020|
HIGH YIELD BOND RESEARCH
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August 26, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 24 MILLION+ CASES AND 828000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6 MILLION+ CASES AND 183000+ 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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Teva Pharmaceuticals Fin BV 6.75% 3/1/2028 Teva Pharmaceutical Industries LTD 3.15% 10/1/2026 T-Mobile USA Inc. 3.5% 4/15/2025 144A Delta Airlines 3.75% 10/28/2029 HCA Inc. 5% 3/15/2024 Ford Motor Credit Co. 4.063% 11/1/2024 Petrobras Global Finance BV 6.85% 6/5/2115 Ford Motor Credit Co. 4.134% 8/4/2025 Howmet Aerospace Inc. 6.875% 5/1/2025 Ally Financial Inc. 3.875% 5/21/2024 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. TreeHouse Foods Inc. (USD) 4% 9/1/2028 (08/25/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4%. | 1. Avianca : $1.3B DIP DD TLB
2. MAG Aerospace: $290.7MM TL (B3/B) 3. CJ Foods Inc.: $285MM TLB 4. Avianca : $1.3B DIP DD TLB 5. UPC/Sunrise: $2.4B term loans (B1/BB-/BB+): $1.2B TLB1; $1.2B TLB2 6. MAG Aerospace: $290.7MM TL (B3/B) 7. CJ Foods Inc.: $285MM TLB 8. CJ Foods Inc.: $285MM TLB 9. Herschend Entertainment Co. LLC: $465MM TLB (B3/B) 10. UPC/Sunrise: $2.4B term loans (B1/BB-/BB+): $1.2B TLB1; $1.2B TLB2 |
Additional Commentary
NEW ISSUANCE WATCH: TreeHouse Foods Inc. issued 500MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 GGP Inc. (USD) TLB L+250 08/24/2025 American Gaming Systems (USD) TL L+1300 02/15/2024 Crown Americas LLC (EUR) TLA E+150 12/13/2024 Safe Fleet Acquisition Corp. (USD) TL L+675 02/01/2026 |
Hillman Group Inc. (USD) TLB L+350 05/21/2025 LSF9 Atlantis Holdings LLC (USD) TL L+600 05/01/2023 Distributed Power Inc. (USD) TLB L+325 11/02/2025 Mavenir Inc. (USD) TLB L+600 05/08/2025 Alera Group Holdings Inc. (USD) TLB L+450 08/01/2025 |
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 08/26/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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August 26, 2020
|
Bond Markets
GOOD NEWS ON THE VACCINE FRONT, STRONG EARNINGS AND TENSIONS LESSENING BETWEEN CHINA AND USA DROVE GLOBAL MARKETS HIGHER. 10 Year Treasury notes were up .6 bps. S&P +1.02%, Dow +0.3%, NASDAQ +1.73%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 24 MILLION+ CASES AND 828000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6 MILLION+ CASES AND 183000+ 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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JP Morgan Chase & Co. 4.35% 8/15/2021 Johnson & Johnson 2.1% 9/1/2040 Intercontinental Exchange Inc. 3% 9/15/2060 Johnson & Johnson 1.3% 9/1/2030 Union Pacific Corp. 4.25% 4/15/2043 Alphabet Inc. 2.05% 8/15/2050 Banco Santander SA 2.746% 5/28/2025 Nike Inc. 3.375% 3/27/2050 AT&T Inc. 3.5% 2/1/2061 Southwest Airlines Co. 5.125% 6/15/2027 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. MassMutual Global Funding II (USD) 0.48% 8/28/2023 144A (08/25/2020): 400MM Secured Notes, Price at Issuance 100, Yielding .48%.
2. MassMutual Global Funding II (USD) 0.48% 8/28/2023 Reg S (08/25/2020): 400MM Secured Notes, Price at Issuance 100, Yielding .48%. 3. Equitable Financial Life (USD) 1.4% 8/27/2027 144A (08/25/2020): 500MM Secured Notes, Price at Issuance 99.768, Yielding 1.43%. 4. PRICOA Global Funding I (USD) 0.8% 9/1/2025 144A (08/25/2020): 400MM Secured Notes, Price at Issuance 99.79, Yielding .84%. 5. PRICOA Global Funding I (USD) 0.8% 9/1/2025 Reg S (08/25/2020): 400MM Secured Notes, Price at Issuance 99.79, Yielding .84%. 6. Equitable Financial Life (USD) 1.4% 8/27/2027 Reg S (08/25/2020): 500MM Secured Notes, Price at Issuance 99.768, Yielding 1.43%. 7. First Capital Real Estate Investment Trust (CAD) 3.447% 3/1/2028 (08/25/2020): 200MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.45%. 8. Hyatt Hotels Corp. (USD) FLT% 9/1/2022 (08/26/2020): 750MM Senior Unsecured Notes, Price at Issuance 100. 9. Catholic Health Services Of Long Island Obligated Group (USD) 3.368% 7/1/2050 (08/26/2020): 400MM Secured Notes, Price at Issuance 100, Yielding 3.37%. 10. University of Chicago (USD) 2.547% 4/1/2050 (08/26/2020): 300MM Unsecured Notes, Price at Issuance 100, Yielding 2.55%. |
Additional Commentary
NEW ISSUANCE WATCH: MassMutual Global Funding II issued 400 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 GGP Inc. (USD) TLB L+250 08/24/2025 American Gaming Systems (USD) TL L+1300 02/15/2024 Crown Americas LLC (EUR) TLA E+150 12/13/2024 Safe Fleet Acquisition Corp. (USD) TL L+675 02/01/2026 |
Hillman Group Inc. (USD) TLB L+350 05/21/2025 LSF9 Atlantis Holdings LLC (USD) TL L+600 05/01/2023 Distributed Power Inc. (USD) TLB L+325 11/02/2025 Mavenir Inc. (USD) TLB L+600 05/08/2025 Alera Group Holdings Inc. (USD) TLB L+450 08/01/2025 |
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 08/26/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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