GLOBAL MARKETS WERE MIXED AS COVID DEATHS AND CASES SEEMED TO REACH A PEEK IN THE US AND EUROPE. VACCINE APPROVED IN UK AND PROGRESS ON US STIMULUS. 10 Year Treasury notes were UP 1.4 bps. S&P +0.18%, Dow +0.20%, NASDAQ -0.05%.
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Market Summaries
North American Bond Research – December 2, 2020
Posted on December 2, 2020|
HIGH YIELD BOND RESEARCH
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December 2, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 64.7 MILLION+ CASES AND 1.5 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 14.26 MILLION+ CASES AND 279000+ 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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General Motors Co. 5.2% 4/1/2045 Pacific Gas & Electric Co. 4.3% 3/15/2045 Pacific Gas & Electric Co. 4.95% 7/1/2050 Syngenta Finance NV 4.892% 4/24/2025 Reg S Pacific Gas & Electric Co. 3.45% 7/1/2025 Pacific Gas & Electric Co. 2.95% 3/1/2026 General Motors Co. 6.25% 10/2/2043 Science Applications Intl Corp. 5.5% 7/1/2033 Vale Overseas LTD 6.25% 8/10/2026 Vale Overseas LTD 3.75% 7/8/2030 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. C&S Group Enterprises LLC (USD) 5% 12/15/2028 144A (12/01/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%.
2. C&S Group Enterprises LLC (USD) 5% 12/15/2018 Reg S (12/01/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%. 3. Nationstar MTG HLD Inc. (USD) 5.125% 12/15/2030 Reg S (12/01/2020): 650MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%. 4. Nationstar MTG HLD Inc. (USD) 5.125% 12/15/2030 144A (12/01/2020): 650MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%. 5. PowerTeam Services LLC (USD) 9.033% 12/4/2025 (12/01/2020): 250MM First Lien Notes, Price at Issuance 108, Yielding 7.11%. |
1. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB
2. American Bath Group LLC: $1.2B TL (B2/B) 3. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB 4. Astoria Energy LLC: $800MM TLB (Ba3) 5. Railworks: $280MM credit facilities: $230MM TLB; $50MM revolver 6. Smartbear: $565MM credit facilities: $50MM revolver (B2/B-); $385MM TL (B2/B-); $130MM TL 7. Sinclair: $550MM senior secured notes 8. American Bath: $335MM senior unsecured notes (Caa2/CCC+) 9. Carnival: $1000MM senior unsecured notes (B2/B) 10. Double Eagle: $650MM senior unsecured notes (B3/B) |
Additional Commentary
NEW ISSUANCE WATCH: C&S Group Enterprises LLC ISSUED 400MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Applied Systems Inc. (USD) TLB L+300 09/18/2024 Unifrax Corp. (EUR) TLB E+375 12/14/2025 Assystem (EUR) TLB E+425 09/28/2024 Road Infrastructure Investment LLC (USD) TL L+350 06/13/2023 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 |
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026 Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025 Aptean Inc. (USD) TL L+850 04/24/2027 Ahlsell AB (EUR) TL E+825 03/01/2027 Fluidra SA (USD) TLB L+200 07/02/2025 |
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 bps (basis points), as of 12/02/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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December 2, 2020
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Bond Markets
GLOBAL MARKETS WERE UP SOLIDLY ON NEWS THAT A BI-PARTISAN SENATE GROUP ARE PUSHING $908 BILLION IN AID TO INDIVIDUALS, BUSINESSES AND CASH STRAPPED STATES. 10 Year Treasury notes were DOWN .1 bps. S&P +1.13%, Dow +0.63%, NASDAQ +1.28%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 64.7 MILLION+ CASES AND 1.5 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 14.26 MILLION+ CASES AND 279000+ 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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Magellan Midstream Partners LP 3.95% 3/1/2050 Banco Santander SA 2.749% 12/3/2030 Verizon Communications Inc. 2.875% 11/20/2050 General Electric Co. 4.35% 5/1/2050 Bank of America Corp. VAR% 10/24/2051 Bank of America Corp. 4.083% 3/20/2051 Verizon Communications Inc. 3% 11/20/2060 JPMorgan Chase & Co. 2.522% 4/22/2031 Johnson & Johnson 2.45% 9/1/2060 Wells Fargo & Co. 1% 6/30/2022 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Southern California Edison Co. (USD) FLT% 12/3/2021 (12/01/2020): 900MM First Lien Notes, Price at Issuance 100.
2. CSX Corp. (USD) 2.5% 5/15/2051 (12/01/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.199, Yielding 2.54%. 3. BP Capital Markets America Inc. (USD) 2.939% 6/4/2051 (12/01/2020): 1500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.94%. 4. Bridge Housing Corp. (USD) 3.25% 7/15/2030 (12/01/2020): 100MM Unsecured Notes, Price at Issuance 100, Yielding 3.25%. 5. Virginia Electric & Power Co. (USD) 2.45% 12/15/2050 (12/01/2020): 900MM Senior Unsecured Notes, Price at Issuance 98.408, Yielding 2.53%. 6. Owl Rock Capital Corp. (USD) 3.4% 7/15/2026 (12/01/2020): 1000MM Senior Unsecured Notes, Price at Issuance 98.845, Yielding 3.63%. 7. Principal Life Global Fund II (USD) 0.5% 1/8/2024 Reg S (12/01/2020): 600MM Secured Notes, Price at Issuance 99.921, Yielding .53%. 8. CNP Assurances (EUR) 0.375% 3/8/2028 (12/01/2020): 500MM Subordinated Notes. 9. Principal Life Global Fund II (USD) 0.5% 1/8/2024 144A (12/01/2020): 600MM Secured Notes, Price at Issuance 99.921, Yielding .53%. 10. NorthShore Re LTD (USD) FLT% 1/8/2024 (12/02/2020): 150MM Unsecured Notes, Price at Issuance 100. |
Additional Commentary
NEW ISSUANCE WATCH: Southern California Edison Co. issued 900 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Applied Systems Inc. (USD) TLB L+300 09/18/2024 Unifrax Corp. (EUR) TLB E+375 12/14/2025 Assystem (EUR) TLB E+425 09/28/2024 Road Infrastructure Investment LLC (USD) TL L+350 06/13/2023 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 |
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026 Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025 Aptean Inc. (USD) TL L+850 04/24/2027 Ahlsell AB (EUR) TL E+825 03/01/2027 Fluidra SA (USD) TLB L+200 07/02/2025 |
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 15bps (basis points), as of 12/02/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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