GLOBAL MARKETS WERE UP AS PAYROLL NUMBERS WERE LOWER THAN EXPECTED. TIMETABLE FOR VACCINE DISTRIBUTION IS BECOMING CLEAR THAT BY JUNE 2021 THE PANDEMIC WILL BE OVER. 10 Year Treasury notes were UP 4.9 bps. S&P +0.88%, Dow +0.83%, NASDAQ +0.70%.
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Market Summaries
North American Bond Research – December 4, 2020
Posted on December 4, 2020|
HIGH YIELD BOND RESEARCH
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December 4, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 66.1 MILLION+ CASES AND 1.52 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 14.7 MILLION+ CASES AND 285000+ 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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Pacific Gas & Electric Co. 4% 12/1/2046 Cinemark Inc. 4.875% 6/1/2023 Ford Motor Credit Co. 3.336% 3/18/2021 Cheniere Corpus Christi Hldgs LLC 5.125% 6/30/2027 Lennar Corp. 4.75% 11/29/2027 Intelsat Luxembourg SA 8.125% 6/1/2023 Broadcom LTD 4.3% 11/15/2032 General Motors Co. 6.25% 10/2/2043 PulteGroup Inc. 5% 1/15/2027 Pacific Gas & Electric Co. 4.3% 3/15/2045 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. AssuredPartners Inc. (USD) 5.625% 1/15/2029 144A (12/03/2020): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.63%.
2. IPL Plastics PLC (USD) 9% 1/15/2026 Reg S (12/03/2020): 125MM Senior Unsecured Notes, Price at Issuance 99, Yielding 9.25%. 3. FS Luxembourg SA R.L (USD) 10% 12/15/2025 Reg S (12/03/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 10%. 4. AssuredPartners Inc. (USD) 5.625% 1/15/2029 Reg S (12/03/2020): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.63%. 5. Seagate HDD Cayman (USD) 3.375% 7/15/2031 Reg S (12/03/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.38%. 6. Seagate HDD Cayman (USD) 3.125% 7/15/2029 Reg S (12/03/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.13%. 7. IPL Plastics PLC (USD) 9% 1/15/2026 144A (12/03/2020): 125MM Senior Unsecured Notes, Price at Issuance 99, Yielding 9.25%. 8. FS Luxembourg SA R.L (USD) 10% 12/15/2025 144A (12/03/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 10%. 9. Citigroup Inc. (USD) VAR% PERP (12/03/2020): 1500MM Junior Subordinated Notes, Price at Issuance 100. 10. Seagate HDD Cayman (USD) 3.375% 7/15/2031 144A (12/03/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.38%. |
1. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB
2. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB 3. Zaxby’s Operating Co LP: $975MM credit facilities: $100MM revolver; $625MM TLB; $250MM TL 4. Railworks: $280MM credit facilities: $230MM TLB; $50MM revolver 5. Service King Collision Repair Centers: $700MM TLB 6. Cano Health LLC: $685MM credit facilities: $30MM revolver; $480MM TL; $175MM DD 7. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB 8. American Bath Group LLC: $1.2B TL (B2/B) 9. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB 10. Astoria Energy LLC: $800MM TLB (Ba3) |
Additional Commentary
NEW ISSUANCE WATCH: AssuredPartners Inc. ISSUED 550MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Casper Bidco (EUR) TL E+850 07/30/2027 Robertshaw Holdings Corp (USD) TL L+350 02/28/2025 HarbourVest Partners LLC (USD) TLB L+225 03/01/2025 ADB Safegate (EUR) TLB E+350 10/02/2024 CPV Shore LLC (USD) TLB L+375 12/27/2025 |
AVSC Holding Corp. (USD) TLB L+450 10/15/2026 Travel Leaders Group (USD) TLB L+400 01/25/2024 Cirque Du Soleil (USD) TL 11/24/2027 Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025 Transplace (USD) TL L+375 10/10/2024 |
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 12/04/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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December 4, 2020
|
Bond Markets
GLOBAL MARKETS WERE UP AS PAYROLL NUMBERS WERE LOWER THAN EXPECTED. TIMETABLE FOR VACCINE DISTRIBUTION IS BECOMING CLEAR THAT BY JUNE 2021 THE PANDEMIC WILL BE OVER. 10 Year Treasury notes were UP 4.9 bps. S&P +0.88%, Dow +0.83%, NASDAQ +0.70%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 66.1 MILLION+ CASES AND 1.52 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 14.7 MILLION+ CASES AND 285000+ 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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Walgreens Boots Alliance Inc. 4.8% 11/18/2044 Verizon Communications Inc. 2.65% 11/20/2040 Boeing Co. 3.25% 2/1/2028 Comcast Corp. 2.45% 8/15/2052 Boeing Co. 3.625% 2/1/2031 General Electric Co. 4.35% 5/1/2050 Anheuser-Busch Inbev Worldwide Inc. 4.5% 6/1/2050 Boeing Co. 5.805% 5/1/2050 Walgreens Boots Alliance Inc. 4.1% 4/15/2050 GE Capital Intl. Funding Co. 4.418% 11/15/2035 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. AIG Global Funding (USD) 0.45% 12/8/2023 Reg S (12/03/2020): 550MM Secured Notes, Price at Issuance 99.89, Yielding .49%.
2. FortisAlberta Inc. (CAD) 2.632% 6/8/2051 (12/03/2020): 175MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.63%. 3. AIG Global Funding (USD) 0.45% 12/8/2023 144A (12/03/2020): 550MM Secured Notes, Price at Issuance 99.89, Yielding .49%. 4. West Virginia United Health System Obligated Group (USD) 3.129% 6/1/2050 (12/03/2020): 333MM Secured Notes, Price at Issuance 100, Yielding 3.13%. 5. Barclays PLC (USD) 1.007% 12/10/2024 (12/03/2020): 1500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.01%. 6. FS KKR Capital Corp. (USD) 3.4% 1/15/2026 (12/03/2020): 1000MM Senior Unsecured Notes, Price at Issuance 98.83, Yielding 3.65%. 7. Juniper Networks Inc. (USD) 2% 12/10/2030 (12/03/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.811, Yielding 2.02%. 8. Juniper Networks Inc. (USD) 1.2% 12/10/2025 (12/03/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.976, Yielding 1.2%. 9. Bank of Montreal (USD) FLT% 12/8/2023 (12/03/2020): 600MM Senior Unsecured Notes, Price at Issuance 100. 10. Bank of Montreal (USD) 0.45% 12/8/2023 (12/03/2020): 900MM Senior Unsecured Notes, Price at Issuance 99.935, Yielding .47%. |
Additional Commentary
NEW ISSUANCE WATCH: AIG Global Funding issued 550 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Casper Bidco (EUR) TL E+850 07/30/2027 Robertshaw Holdings Corp (USD) TL L+350 02/28/2025 HarbourVest Partners LLC (USD) TLB L+225 03/01/2025 ADB Safegate (EUR) TLB E+350 10/02/2024 CPV Shore LLC (USD) TLB L+375 12/27/2025 |
AVSC Holding Corp. (USD) TLB L+450 10/15/2026 Travel Leaders Group (USD) TLB L+400 01/25/2024 Cirque Du Soleil (USD) TL 11/24/2027 Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025 |
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 12/04/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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