GLOBAL MARKETS WERE GENERALLY UP AS COVID CASES CONTINUE TO CLIMB BUT CLARITY SURROUNDING VACCINES AND IT’S ROLLOUT HELPED PUSH UP MARKETS. STIMULUS TALK HEATING UP, MAKING LIKELY SOMETHING WILL HAPPEN SOON. 10 Year Treasury notes were DOWN 1.5 bps. S&P +0.28%, Dow +0.35%, NASDAQ +0.50%.
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Market Summaries
North American Bond Research – December 8, 2020
Posted on December 8, 2020|
HIGH YIELD BOND RESEARCH
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December 8, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 68.5 MILLION+ CASES AND 1.56 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 15.56 MILLION+ CASES AND 293000+ 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. 3.3% 12/1/2027 Pacific Gas & Electric Co. 4.45% 4/15/2042 Dollar General Corp. 3.25% 4/15/2023 General Motors Co. 5.2% 4/1/2045 United States STL Corp. New 6.25% 3/15/2026 Starwood Property Trust Inc. 5% 12/15/2021 Teva Pharmaceuticals Fin BV 6.75% 3/1/2028 Pacific Gas & Electric Co. 4.55% 7/1/2030 Equinix Inc. 5.375% 5/15/2027 Transocean Inc. 6.8% 3/15/2038 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Kraton Polymers LLC (USD) 4.25% 12/15/2025 144A (12/07/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.25%.
2. Kraton Polymers LLC (USD) 4.25% 12/15/2025 Reg S (12/07/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.25%. |
1. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB
2. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB 3. Commercehub Inc.: $790MM senior credit facilities: $50MM revolver; $530MM TLB; $210MM TL 4. Zaxby’s Operating Co LP: $975MM credit facilities: $100MM revolver; $625MM TLB; $250MM TL 5. Provation Software Group Inc.: $330MM TLs: $250MM TL; $80MM TL2 6. Ozark Holdings LLC: $400MM TLB 7. Unified Women’s Healthcare LP: $560MM TLs: $420MM TLB (B-); $140MM TL 8. Zaxby’s Operating Co LP: $975MM credit facilities: $100MM revolver; $625MM TLB; $250MM TL 9. Unified Women’s Healthcare LP: $560MM TLs: $420MM TLB (B-); $140MM TL 10. Railworks: $280MM credit facilities: $230MM TLB; $50MM revolver |
Additional Commentary
NEW ISSUANCE WATCH: Kraton Polymers LLC issued 200 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Pfleiderer AG (EUR) TLB E+500 04/13/2024 CSM Bakery (USD) TL L+1000 02/04/2022 Transplace (USD) TL L+375 10/10/2024 Casper Bidco (EUR) TL E+850 07/30/2027 GGP Inc. (USD) TLB L+250 08/24/2025 |
Aptean Inc. (USD) TL L+850 04/24/2027 StandardAero (USD) TL L+350 04/08/2026 Garrett Motion (USD) TLB L+250 09/27/2025 Averys SA (EUR) TLB E+825 09/25/2026 Greenway Health LLC (USD) TL L+375 02/16/2024 |
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 16 bps (basis points), as of 12/08/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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December 8, 2020
|
Bond Markets
GLOBAL MARKETS WERE GENERALLY UP AS COVID CASES CONTINUE TO CLIMB BUT CLARITY SURROUNDING VACCINES AND IT’S ROLLOUT HELPED PUSH UP MARKETS. STIMULUS TALK HEATING UP, MAKING LIKELY SOMETHING WILL HAPPEN SOON. 10 Year Treasury notes were DOWN 1.5 bps. S&P +0.28%, Dow +0.35%, NASDAQ +0.50%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 68.5 MILLION+ CASES AND 1.56 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 15.56 MILLION+ CASES AND 293000+ 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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Wells Fargo & Co. 5.013% 4/4/2051 Exxon Mobil Corp. 1.571% 4/15/2023 Verizon Communications Inc. 3% 11/20/2060 Abbvie Inc. 2.3% 11/21/2022 Charles Schwab Corp. 5.375% PERP Oneok Inc. 6.35% 1/15/2031 Verizon Communications Inc. 2.875% 11/20/2050 Morgan Stanley VAR% 7/22/2028 Verizon Communications Inc. 4.016% 12/3/2029 Bank of America Corp. VAR% 7/21/2028 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Systems Energy Resources Inc. (USD) 2.14% 12/9/2025 (12/07/2020): 200MM First Lien Notes, Price at Issuance 99.967, Yielding 2.15%.
2. CVS Health Corp (USD) 1.875% 2/28/2031 (12/07/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.988, Yielding 1.88%. 3. Guardian Life Global Funding (USD) 0.875% 12/10/2025 144A (12/07/2020): 500MM Secured Notes, Price at Issuance 99.932, Yielding .89%. 4. Key Bank NA (USD) VAR% 1/3/2024 (12/07/2020): 750MM Senior Unsecured Notes, Price at Issuance 100. 5. Nasdaq Inc. (USD) 1.65% 1/15/2031 (12/07/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.667, Yielding 1.69%. 6. Morgan Stanley (USD) VAR% 12/10/2026 (12/07/2020): 2500MM Senior Unsecured Notes, Price at Issuance 100. 7. Nasdaq Inc. (USD) 0.445% 12/21/2022 (12/07/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding .45%. 8. Key Bank NA (USD) FLT% 1/3/2024 (12/07/2020): 350MM Senior Unsecured Notes, Price at Issuance 100. 9. Nasdaq Inc. (USD) 2.5% 12/21/2040 (12/07/2020): 650MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.5%. 10. Canadian Imperial Bank of Commerce (USD) FLT% 12/14/2023 (12/07/2020): 600MM Senior Unsecured Notes, Price at Issuance 100. |
Additional Commentary
NEW ISSUANCE WATCH: Systems Energy Resources Inc. issued 200 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Pfleiderer AG (EUR) TLB E+500 04/13/2024 CSM Bakery (USD) TL L+1000 02/04/2022 Transplace (USD) TL L+375 10/10/2024 Casper Bidco (EUR) TL E+850 07/30/2027 GGP Inc. (USD) TLB L+250 08/24/2025 |
Aptean Inc. (USD) TL L+850 04/24/2027 StandardAero (USD) TL L+350 04/08/2026 Garrett Motion (USD) TLB L+250 09/27/2025 Averys SA (EUR) TLB E+825 09/25/2026 Greenway Health LLC (USD) TL L+375 02/16/2024 |
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 16 bps (basis points), as of 12/08/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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