EUROPEAN MARKETS TANK WHILE US MARKETS GO UP AS THE FED STATES IT WILL LET INFLATION RUN HIGHER THAN 2% FOR EXTENDED PERIOD OF TIME. THIS MEANS THE MONEY SUPPLY WILL BE VERY CHEAP AND PLENTIFUL FOR A LONG TIME. 10 Year Treasury notes were up 6.3 bps. S&P +0.67%, Dow +0.57%, NASDAQ +0.60%.
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Market Summaries
North American Bond Research – August 28, 2020
Posted on August 28, 2020|
HIGH YIELD BOND RESEARCH
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August 28, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 24.9 MILLION+ CASES AND 839000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.1 MILLION+ CASES AND 186000+ 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 TreeHouse Foods Inc. 4% 9/1/2028 Sabine Pass Liquefaction LLC 5.625% 3/1/2025 Cheniere Corpus Christi Hldgs LLC 5.125% 6/30/2027 Valaris PLC 4.75% 1/15/2024 L Brands Inc. 5.625% 10/15/2023 Frontier Communications Corp. 11% 9/15/2025 Crown Castle Intl Corp. 5.25% 1/15/2023 Hilton Worldwide Finance LLC 4.875% 4/1/2027 Occidental Petroleum Corp. 6.625% 9/1/2030 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
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(None Current 08/28/2020)
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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: No New Issues.
| Top Widening Loans | Top Narrowing Loans |
| Web.com Group Inc. (USD) TL2 L+775 09/17/2026 Fortress Merger Sub Inc. (USD) TL L+400 10/21/2023 GGP Inc. (USD) TLB L+250 08/24/2025 Hanjin Intl. Corp. (USD) TLB L+250 09/20/2020 Hillman Group Inc. (USD) TLB L+350 05/21/2025 |
Crown Americas LLC (EUR) TLA E+150 12/13/2024 Deoleo SA (EUR) TL2 E+675 06/12/2022 Exclusive Group (EUR) TLB E+400 06/06/2025 Garrett Motion (USD) TLB L+250 09/27/2025 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 15 bp (basis points), as of 08/28/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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August 28, 2020
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Bond Markets
EUROPEAN MARKETS TANK WHILE US MARKETS GO UP AS THE FED STATES IT WILL LET INFLATION RUN HIGHER THAN 2% FOR EXTENDED PERIOD OF TIME. THIS MEANS THE MONEY SUPPLY WILL BE VERY CHEAP AND PLENTIFUL FOR A LONG TIME. 10 Year Treasury notes were up 6.3 bps. S&P +0.67%, Dow +0.57%, NASDAQ +0.60%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 24.9 MILLION+ CASES AND 839000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.1 MILLION+ CASES AND 186000+ 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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Johnson & Johnson 2.45% 9/1/2060 Microsoft Corp. 2.525% 6/1/2050 Apple Inc. 2.55% 8/20/2060 General Electric Co. 4.35% 5/1/2050 Viacom Inc. 4.95% 1/15/2031 Johnson & Johnson 2.1% 9/1/2040 Johnson & Johnson 0.95% 9/1/2027 Home Depot Inc. 3.35% 4/15/2050 Verizon Communications Inc. 4.5% 8/10/2033 CVS Health Corp. 3.875% 7/20/2025 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Brookfield Infrastructure Finance ULC (CAD) 2.855% 9/1/2032 (08/27/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.86%.
2. Met Life Global Funding Inc. (USD) 0.45% 9/1/2023 144A (08/28/2020): 350MM Senior Unsecured Notes, Price at Issuance 99.884, Yielding .49%. 3. Met Life Global Funding Inc. (USD) 0.45% 9/1/2023 Reg S (08/28/2020): 350MM Senior Unsecured Notes, Price at Issuance 350, Yielding -37.36%. |
Additional Commentary
NEW ISSUANCE WATCH: Met Life Global Funding Inc. issued 750 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Web.com Group Inc. (USD) TL2 L+775 09/17/2026 Fortress Merger Sub Inc. (USD) TL L+400 10/21/2023 GGP Inc. (USD) TLB L+250 08/24/2025 Hanjin Intl. Corp. (USD) TLB L+250 09/20/2020 Hillman Group Inc. (USD) TLB L+350 05/21/2025 |
Crown Americas LLC (EUR) TLA E+150 12/13/2024 Deoleo SA (EUR) TL2 E+675 06/12/2022 Exclusive Group (EUR) TLB E+400 06/06/2025 Garrett Motion (USD) TLB L+250 09/27/2025 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 15 bp (basis points), as of 08/28/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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