A COMBINATION OF FACTORS PUSHED MARKETS UP. TRUMP IS LEANING ON NOT SANCTIONING CHINA. FIGURES FOR CAR, HOMES, DURABLE GOOD AND REFINANCING HELPED KEEP THE ECONOMY GOING. 10 Year Treasury notes were up 1.8 bps. S&P +0.91%, Dow +0.85%, NASDAQ +0.59%.
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Market Summaries
North American Bond Research – July 15, 2020
Posted on July 15, 2020|
HIGH YIELD BOND RESEARCH
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July 15, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 13.7 MILLION+ CASES AND 586000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 3.6 MILLION+ CASES AND 140000+ 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. 3.95% 12/1/2047 Delta Airlines 7.375% 1/15/2026 Delta Airlines 2.9% 10/28/2024 Pacific Gas & Electric Co. 4% 12/1/2046 Smithsonian Institution 2.645% 9/1/2039 Petrobras Global Finance BV 8.75% 5/23/2026 Western Midstream Operating, LP 3.1% 2/1/2025 Freeport-McMoRan Inc. 4.375% 8/1/2028 Freeport-McMoRan Inc. 4.625% 8/1/2030 Pacific Gas & Electric Co. 3.3% 12/1/2027 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Pattern Energy Group LP (USD) 4.5% 8/15/2028 144A (07/14/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.5%.
2. Pattern Energy Group LP (USD) 4.5% 8/15/2028 Reg S (07/14/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.5%. 3. Carnival Corp. (USD) 10.5% 2/1/2026 144A (07/15/2020): 775MM Second Lien Notes, Price at Issuance 100, Yielding 10.5%. 4. Carnival Corp. (USD) 10.5% 2/1/2026 Reg S (07/15/2020): 775MM Second Lien Notes, Price at Issuance 100, Yielding 10.5%. 5. AdaptHealth LLC (USD) 6.125% 8/1/2028 144A (07/15/2020): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.13%. 6. Joseph T Ryerson & Son Inc. (USD) 8.5% 8/1/2028 144A (07/15/2020): 500MM Secured Notes, Price at Issuance 100, Yielding 8.5%. 7. AdaptHealth LLC (USD) 6.125% 8/1/2028 Reg S (07/15/2020): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.13%. 8. Joseph T Ryerson & Son Inc. (USD) 8.5% 8/1/2028 Reg S (07/15/2020): 100MM Secured Notes, Price at Issuance 100, Yielding 8.5%. |
1. Thyssenkrupp Elevator: $2.875B seven-year first-lien term loan B (B1/B/B+); ¬1.1015B seven-year first-lien first-lien term loan B (B1/B/B+)
2. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL 3. Alion Science & Technology Corp.: $400MM credit facilities: $40MM Revolver (Ba1/BB); $360MM TL (B1/BB-) 4. Authentic Brands Group LLC: $150MM TL (B2/B) 5. First Brands Group LLC: $710MM TL 6. Huntsworth PLC: $300MM TL 7. Agrofesh Solutions Inc.: $50MM covenant-lite TL 8. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 9. Huntsworth PLC: $300MM TL 10. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL |
Additional Commentary
NEW ISSUANCE WATCH: Carnival Corp issued $775MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Casper Bidco (EUR) TL E+850 07/30/2027 Unifrax Corp. (USD) TL2 L+850 12/14/2026 Distributed Power Inc. (EUR) TL E+800 11/02/2026 Automate Intermediate Hldg II Sarl (USD) TLB L+425 07/22/2026 Automate Intermediate Hldg II Sarl (EUR) TLB E+350 07/22/2026 |
Logoplaste (EUR) TLB E+400 10/31/2023 Tacala LLC (USD) TLB L+750 02/05/2028 ProFrac Services LLC (USD) TLB L+575 09/06/2023 Albertsons LLC (USD) TL L+275 11/17/2025 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 |
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 14 bp (basis points), as of 07/15/2020
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INVESTMENT GRADE BOND RESEARCH
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July 15, 2020
|
Bond Markets
A COMBINATION OF FACTORS PUSHED MARKETS UP. TRUMP IS LEANING ON NOT SANCTIONING CHINA. FIGURES FOR CAR, HOMES, DURABLE GOOD AND REFINANCING HELPED KEEP THE ECONOMY GOING. 10 Year Treasury notes were up 1.8 bps. S&P +0.91%, Dow +0.85%, NASDAQ +0.59%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 13.7 MILLION+ CASES AND 586000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 3.6 MILLION+ CASES AND 140000+ 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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Australia & New Zealand Banking Grp 2.625% 11/9/2022 Anheuser-Busch Inbev Worldwide Inc. 4.9% 2/1/2046 Altria Group Inc. 4.8% 2/14/2029 Boeing Co. 4.875% 5/1/2025 Banco Santander SA 3.49% 5/28/2030 Verizon Communications Inc. 4.125% 3/16/2027 CVS Health Corp. 4.3% 3/25/2028 American Intl Group Inc. 3.4% 6/30/2030 Pacific Gas & Electric Co. 3.5% 8/1/2050 Oracle Corp. 3.85% 4/1/2060 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. UDR Inc. (USD) 2.1% 8/1/2032 (07/14/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.894, Yielding 2.11%.
2. HP Enterprise Services LLC (USD) 1.75% 4/1/2026 (07/14/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.82, Yielding 1.78%. 3. HP Enterprise Services LLC (USD) 1.45% 4/1/2024 (07/14/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.883, Yielding 1.48%. 4. Canadian Imperial Bank of Commerce (CAD) VAR% 7/21/2030 (07/14/2020): 1000MM Subordinated Notes, Price at Issuance 99.962. 5. Tengizchevroil Finance Co. SAr.L (USD) 2.625% 8/15/2025 144A (07/15/2020): 500MM Secured Notes, Price at Issuance 99.412, Yielding 2.75%. 6. Tengizchevroil Finance Co. SAr.L (USD) 3.25% 8/15/2030 144A (07/15/2020): 750MM Secured Notes, Price at Issuance 98.939, Yielding 3.37%. 7. Multicare Health System (USD) 2.803% 8/15/2050 (07/15/2020): 300MM Unsecured Notes, Price at Issuance 100, Yielding 2.8%. 8. Drexel University (USD) 3.215% 5/1/2050 (07/15/2020): 104MM Unsecured Notes, Price at Issuance 100, Yielding 3.22%. |
Additional Commentary
NEW ISSUANCE WATCH: on 07/15/2020 participants welcome a $400MM new corporate-bond offering by UDR Inc.
| Top Widening Loans | Top Narrowing Loans |
| Casper Bidco (EUR) TL E+850 07/30/2027 Unifrax Corp. (USD) TL2 L+850 12/14/2026 Distributed Power Inc. (EUR) TL E+800 11/02/2026 Automate Intermediate Hldg II Sarl (USD) TLB L+425 07/22/2026 Automate Intermediate Hldg II Sarl (EUR) TLB E+350 07/22/2026 |
Logoplaste (EUR) TLB E+400 10/31/2023 Tacala LLC (USD) TLB L+750 02/05/2028 ProFrac Services LLC (USD) TLB L+575 09/06/2023 Albertsons LLC (USD) TL L+275 11/17/2025 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 |
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 14 bp (basis points), as of 07/15/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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