MARKETS UP ON VACCINE NEWS. JOHNSON AND JOHNSON, AS WELL AS MODERNA, ARE BOTH MAKING SIGNIFICANT PROGRESS TOWARDS A VACCINE. 10 Year Treasury notes were up 2.8 bps. S&P +0.55%, Dow +1.15%, NASDAQ +0.45%.
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Market Summaries
North American Bond Research – August 5, 2020
Posted on August 5, 2020|
HIGH YIELD BOND RESEARCH
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August 5, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 18.9 MILLION+ CASES AND 708000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5 MILLION+ CASES AND 161000+ 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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Alphabet Inc. 2.05% 8/15/2050 Alphabet Inc. 2.25% 8/15/2060 Walt Disney Co. 3.6% 1/13/2051 General Motors Financial Co. Inc. 2.75% 6/20/2025 Boeing Co. 5.805% 5/1/2050 Boeing Co. 5.15% 5/1/2030 Alphabet Inc. 0.8% 8/15/2027 Bank of America Corp. 1.898% 7/23/2031 Alphabet Inc. 0.45% 8/15/2025 Viacom Inc. 4.2% 5/19/2032 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Morgan Stanley Finance LLC (USD) 0% 8/11/2060 (08/04/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 0%.
2. New York Life Global Funding (USD) 1.2% 8/7/2030 144A (08/04/2020): 600MM Secured Notes, Price at Issuance 99.831, Yielding 1.22%. 3. AutoZone Inc. (USD) 1.65% 1/15/2031 (08/04/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.696, Yielding 1.68%. 4. PACCAR Financial Corp. (USD) 0.35% 8/11/2023 (08/04/2020): 450MM Senior Unsecured Notes, Price at Issuance 99.869, Yielding .39%. 5. Moody’s Corp. (USD) 2.55% 8/18/2060 (08/04/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.155, Yielding 2.58%. 6. Boardwalk Pipelines LLC (USD) 3.4% 2/15/2031 (08/04/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.886, Yielding 3.41%. 7. Public Service Electric & Gas Co. (USD) 2.05% 8/1/2050 (08/04/2020): 375MM Secured Notes, Price at Issuance 99.201, Yielding 2.09%. |
Additional Commentary
NEW ISSUANCE WATCH: AutoZone Inc. issued 600 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| CPV Shore LLC (USD) TLB L+375 12/27/2025 Indivior Finance LLC (USD) TLB L+450 12/14/2022 Pitney Bowes Inc. (USD) TLA L+175 11/01/2024 API Technologies Corp. (USD) TL L+425 05/09/2026 Exclusive Group (EUR) TLB E+400 06/06/2025 |
TCW Group (USD) TLB L+175 12/27/2024 Tacala LLC (USD) TLB L+350 02/05/2027 Vertafore Inc. (USD) TL1 L+325 06/30/2023 Kiwi Holding IV Sarl (GBP) TLB L+400 07/27/2024 CH Guenther & Son Inc. (USD) TLB L+275 03/23/2025 |
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 08/05/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
|
August 5, 2020
|
Bond Markets
MARKETS UP ON VACCINE NEWS. JOHNSON AND JOHNSON, AS WELL AS MODERNA, ARE BOTH MAKING SIGNIFICANT PROGRESS TOWARDS A VACCINE. 10 Year Treasury notes were up 2.8 bps. S&P +0.55%, Dow +1.15%, NASDAQ +0.45%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 18.9 MILLION+ CASES AND 708000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 5 MILLION+ CASES AND 161000+ 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 | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Alphabet Inc. 2.05% 8/15/2050 Alphabet Inc. 2.25% 8/15/2060 Walt Disney Co. 3.6% 1/13/2051 General Motors Financial Co. Inc. 2.75% 6/20/2025 Boeing Co. 5.805% 5/1/2050 Boeing Co. 5.15% 5/1/2030 Alphabet Inc. 0.8% 8/15/2027 Bank of America Corp. 1.898% 7/23/2031 Alphabet Inc. 0.45% 8/15/2025 Viacom Inc. 4.2% 5/19/2032 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Morgan Stanley Finance LLC (USD) 0% 8/11/2060 (08/04/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 0%.
2. New York Life Global Funding (USD) 1.2% 8/7/2030 144A (08/04/2020): 600MM Secured Notes, Price at Issuance 99.831, Yielding 1.22%. 3. AutoZone Inc. (USD) 1.65% 1/15/2031 (08/04/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.696, Yielding 1.68%. 4. PACCAR Financial Corp. (USD) 0.35% 8/11/2023 (08/04/2020): 450MM Senior Unsecured Notes, Price at Issuance 99.869, Yielding .39%. 5. Moody’s Corp. (USD) 2.55% 8/18/2060 (08/04/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.155, Yielding 2.58%. 6. Boardwalk Pipelines LLC (USD) 3.4% 2/15/2031 (08/04/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.886, Yielding 3.41%. 7. Public Service Electric & Gas Co. (USD) 2.05% 8/1/2050 (08/04/2020): 375MM Secured Notes, Price at Issuance 99.201, Yielding 2.09%. 8. Block Financial LLC (USD) 3.875% 8/15/2030 (08/04/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.687, Yielding 3.91%. 9. Texas Health Resources (USD) 2.328% 11/15/2050 (08/04/2020): 300MM Senior Unsecured Notes, Price at Issuance 100. 10. New York Life Global Funding (USD) 1.2% 8/7/2030 Reg S (08/04/2020): 600MM Secured Notes, Price at Issuance 99.831, Yielding 1.22%. |
Additional Commentary
NEW ISSUANCE WATCH: AutoZone Inc. issued 600 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| CPV Shore LLC (USD) TLB L+375 12/27/2025 Indivior Finance LLC (USD) TLB L+450 12/14/2022 Pitney Bowes Inc. (USD) TLA L+175 11/01/2024 API Technologies Corp. (USD) TL L+425 05/09/2026 Exclusive Group (EUR) TLB E+400 06/06/2025 |
TCW Group (USD) TLB L+175 12/27/2024 Tacala LLC (USD) TLB L+350 02/05/2027 Vertafore Inc. (USD) TL1 L+325 06/30/2023 Kiwi Holding IV Sarl (GBP) TLB L+400 07/27/2024 CH Guenther & Son Inc. (USD) TLB L+275 03/23/2025 |
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 16bp (basis points), as of 08/05/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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