GLOBAL MARKETS WERE UP AS US SENATE NEARS A DEAL. STIMULUS CHECKS WILL BE INCLUDED. MONEY FOR STATES IS A STICKING POINT AND NEEDS TO BE IRONED OUT. 10 Year Treasury notes were DOWN 0.3 bps. S&P +0.18%, Dow -0.15%, NASDAQ +0.5%.
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Market Summaries
North American Bond Research – December 16, 2020
Posted on December 16, 2020|
HIGH YIELD BOND RESEARCH
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December 16, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 74.4 MILLION+ CASES AND 1.65 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 17.3 MILLION+ CASES AND 314000+ 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 | ||||||||||||||||||||||
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Sabine Pass Liquefaction LLC 5.625% 3/1/2025 T-Mobile USA Inc. 3.5% 4/15/2025 144A Broadcom LTD 4.75% 4/15/2029 Cheniere Corpus Christi Hldgs LLC 5.125% 6/30/2027 Occidental Petroleum Corp. 6.125% 1/1/2031 Pacific Gas & Electric Co. 4.75% 2/15/2044 Occidental Petroleum Corp. 3.4% 4/15/2026 EQT Corp. 3.9% 10/1/2027 Micron Technology Inc. 4.663% 2/15/2030 Latam Finance Limited 6.875% 4/11/2024 Reg S |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. AdaptHealth LLC (USD) 4.625% 8/1/2029 144A (12/15/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%.
2. Scripps Escrow Inc. (USD) 3.875% 1/15/2029 144A (12/15/2020): 550MM First Lien Notes, Price at Issuance 100, Yielding 3.88%. 3. Scripps Escrow Inc. (USD) 5.375% 1/15/2031 144A (12/15/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.38%. 4. Affinity Gaming LLC (USD) 6.875% 12/15/2027 Reg S (12/15/2020): 475MM First Lien Notes, Price at Issuance 100, Yielding 6.88%. 5. Valvoline Inc. (USD) 3.625% 6/15/2031 144A (12/15/2020): 535MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.63%. 6. NCL Corp. LTD (USD) 5.875% 3/15/2026 144A (12/15/2020): 850MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.88%. 7. Affinity Gaming LLC (USD) 6.875% 12/15/2027 144A (12/15/2020): 475MM First Lien Notes, Price at Issuance 100, Yielding 6.88%. 8. Tallgrass Energy Partners LP (USD) 6% 12/31/2030 144A (12/15/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6%. 9. AdaptHealth LLC (USD) 4.625% 8/1/2029 Reg S (12/15/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%. 10. Scripps Escrow Inc. (USD) 3.875% 1/15/2029 Reg S (12/15/2020): 550MM First Lien Notes, Price at Issuance 100, Yielding 3.88%. |
1. Energizer Holdings Inc.: $1.2B TLB (BB+)
2. Planview: $890MM TLs: $535MM TL (B2/B-); $125MM DD; $230MM TL (Caa2/CCC+) 3. Pointclickcare: $450MM TLB (B1/B+) 4. Provation Software Group Inc.: $330MM TLs: $250MM TL; $80MM TL2 5. Centerfield: $500MM TL (B2/B): $400MM TLB; $100MM DD 6. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB 7. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB 8. Asurion LLC: $2.087B TLB8 9. Unified Women’s Healthcare LP: $560MM TLs: $420MM TLB (B-); $140MM TL 10. Community Health: $1050MM senior secured notes (Caa2/B-) |
Additional Commentary
NEW ISSUANCE WATCH: AdaptHealth LLC issued 500 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| ADB Safegate (EUR) TLB E+350 10/02/2024 ADB Safegate (EUR) RC E+325 10/02/2023 NCL Corp. LTD (USD) TLA L+150 01/02/2024 NEP NCP Holdco Inc. (USD) TL2 L+700 10/10/2026 Learning Care Group Inc. (USD) TL L+750 03/13/2026 |
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026 Aernnova Aerospace SA (EUR) TLB E+300 01/31/2027 Auris Luxembourg III SA (EUR) TL E+675 02/21/2027 Alterra Mountain (USD) TLB L+450 08/31/2026 Fortress Merger Sub Inc. (USD) TL L+400 10/21/2023 |
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 bps (basis points), as of 12/16/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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December 16, 2020
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Bond Markets
GLOBAL MARKETS WERE UP AS US SENATE NEARS A DEAL. STIMULUS CHECKS WILL BE INCLUDED. MONEY FOR STATES IS A STICKING POINT AND NEEDS TO BE IRONED OUT. 10 Year Treasury notes were DOWN 0.3 bps. S&P +0.18%, Dow -0.15%, NASDAQ +0.5%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 74.4 MILLION+ CASES AND 1.65 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 17.3 MILLION+ CASES AND 314000+ 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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Goldman Sachs BDC Inc. 2.875% 1/15/2026 Broadcom LTD 4.15% 11/15/2030 General Motors Financial Co. Inc. 3.6% 6/21/2030 Owl Rock Capital Corp. 3.4% 7/15/2026 Verizon Communications Inc. 4.522% 9/15/2048 BP Capital Markets America Inc. 2.939% 6/4/2051 AstraZeneca PLC 1.375% 8/6/2030 Sabine Pass Liquefaction LLC 5.625% 3/1/2025 Bank of America Corp. VAR% 10/24/2031 Walt Disney Co. 2% 9/1/2029 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Berry Global Inc. (USD) 1.57% 1/15/2026 144A (12/15/2020): 750MM First Lien Notes, Price at Issuance 99.966, Yielding 1.58%.
2. MET Tower Global Funding (USD) FLT% 12/14/2022 144A (12/15/2020): 100MM Secured Notes, Price at Issuance 100. 3. Berry Global Inc. (USD) 1.57% 1/15/2026 Reg S (12/15/2020): 750MM First Lien Notes, Price at Issuance 99.966, Yielding 1.58%. 4. Dream Industrial LP (CAD) 1.662% 12/22/2025 (12/15/2020): 250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.66%. 5. Mystic RE IV LTD (USD) FLT% 1/8/2024 (12/16/2020): 300MM Unsecured Notes, Price at Issuance 100. |
Additional Commentary
NEW ISSUANCE WATCH: Berry Global Inc. issued 750 MM in Notes.
| Top Widening Loans | Top Narrowing Loans |
| ADB Safegate (EUR) TLB E+350 10/02/2024 ADB Safegate (EUR) RC E+325 10/02/2023 NCL Corp. LTD (USD) TLA L+150 01/02/2024 NEP NCP Holdco Inc. (USD) TL2 L+700 10/10/2026 Learning Care Group Inc. (USD) TL L+750 03/13/2026 |
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026 Aernnova Aerospace SA (EUR) TLB E+300 01/31/2027 Auris Luxembourg III SA (EUR) TL E+675 02/21/2027 Alterra Mountain (USD) TLB L+450 08/31/2026 Fortress Merger Sub Inc. (USD) TL L+400 10/21/2023 |
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 bps (basis points), as of 12/16/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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