MARKETS WERE DOWN IN EUROPE BUT UP IN THE US AS TALKS OF MORE STIMULUS PUSHED MARKETS HIGHER. THERE SEEMS TO BE A GROWING DIVIDE BETWEEN TECH STOCKS SOARING AND THE REST OF THE MARKET STRUGGLING. 10 Year Treasury notes were down .5 bps. S&P +0.77%, Dow +0.44%, NASDAQ +1.49%.
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Market Summaries
North American Bond Research – July 31, 2020
Posted on July 31, 2020|
HIGH YIELD BOND RESEARCH
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July 31, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 17.7 MILLION+ CASES AND 681000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 4.7 MILLION+ CASES AND 157000+ 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. 4.55% 7/1/2030 Pacific Gas & Electric Co. 4.95% 7/1/2050 Pacific Gas & Electric Co. 3.75% 7/1/2028 Pacific Gas & Electric Co. 4.3% 3/15/2045 Pacific Gas & Electric Co. 3.45% 7/1/2025 Pacific Gas & Electric Co. 3.3% 12/1/2027 Pacific Gas & Electric Co. 4.75% 2/15/2044 Pacific Gas & Electric Co. 2.95% 3/1/2026 Pacific Gas & Electric Co. 3.95% 12/1/2047 T-Mobile USA Inc. 3.5% 4/15/2025 144A |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. NFP Corp. (USD) 6.875% 8/15/2028 144A (07/30/2020): 1250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.88%.
2. NFP Corp. (USD) 6.875% 8/15/2028 Reg S (07/30/2020): 1250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.88%. 3. G-III Apparel Group LTD (USD) 7.875% 8/15/2025 144A (07/30/2020): 400MM First Lien Notes, Price at Issuance 100, Yielding 7.88%. 4. G-III Apparel Group LTD (USD) 7.875% 8/15/2025 Reg S (07/30/2020): 400MM First Lien Notes, Price at Issuance 100, Yielding 7.88%. 5. United Rentals North AM (USD) 3.875% 2/15/2031 (07/31/2020): 1100MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. |
1. Aldevron LLC: $50MM TL (B1/B)
2. Concord : $850MM credit facilities (B1/BB-): $450MM revolver; $400MM TLB 3. CJ Foods Inc.: $285MM TLB 4. 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+) 5. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL 6. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 7. Huntsworth PLC: $300MM TL 8. Sequa Corp.: $200MM TL 9. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 10. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL |
Additional Commentary
NEW ISSUANCE WATCH: NFP Corp.issued $1250MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Petco Animal Supplies Inc. (USD) TLB1 L+325 01/26/2023 Web.com Group Inc. (USD) TL2 L+775 09/17/2026 Duravant LLC (USD) TL2 L+725 07/25/2025 Tacala LLC (USD) TLB L+350 02/05/2027 Verifone Inc. (USD) TL L+400 08/20/2025 |
Colfax Corp. (USD) TLA1 L+150 12/06/2024 DTZ US Borrower LLC (USD) TLB L+275 08/21/2025 Tecomet Inc. (USD) TL L+350 05/01/2024 Albertsons LLC (USD) TL L+275 11/17/2025 Ball Corp. (USD) TLA L+150 03/21/2024 |
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 bp (basis points), as of 07/31/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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July 31, 2020
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Bond Markets
MARKETS WERE DOWN IN EUROPE BUT UP IN THE US AS TALKS OF MORE STIMULUS PUSHED MARKETS HIGHER. THERE SEEMS TO BE A GROWING DIVIDE BETWEEN TECH STOCKS SOARING AND THE REST OF THE MARKET STRUGGLING. 10 Year Treasury notes were down .5 bps. S&P +0.77%, Dow +0.44%, NASDAQ +1.49%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 17.7 MILLION+ CASES AND 681000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 4.7 MILLION+ CASES AND 157000+ 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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Pacific Gas & Electric Co. 4.55% 7/1/2030 Pacific Gas & Electric Co. 3.15% 1/1/2026 Pacific Gas & Electric Co. 4.95% 7/1/2050 Bank of America Corp. 1.898% 7/23/2031 AT&T Inc. 2.25% 2/1/2032 Nomura Hldg Inc. 1.851% 4/16/2025 Pacific Gas & Electric Co. 3.75% 7/1/2028 Southwest Airlines Co. 5.125% 6/15/2027 Bank of America Corp. VAR% 6/19/2041 Citibank NA 3.4% 7/23/2021 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Highwoods Realty LP (USD) 2.6% 2/1/2031 (07/30/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.591, Yielding 2.64%.
2. Enterprise Products Operating LLC (USD) 3.2% 2/15/2052 (07/30/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.233, Yielding 3.24%. 3. Truist Financial Corp. (USD) 1.125% 8/3/2027 (07/30/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.839, Yielding 1.15%. 4. Fedex Corp. 2020-1 Class Aa Pass Through Trust (USD) 1.875% 2/20/2034 (07/30/2020): 970MM First Lien Notes, Price at Issuance 100, Yielding 1.88%. |
Additional Commentary
NEW ISSUANCE WATCH: on 07/31/2020 participants welcome a $400MM new corporate-bond offering by
Highwoods Realty LP .
Highwoods Realty LP .
| Top Widening Loans | Top Narrowing Loans |
| Petco Animal Supplies Inc. (USD) TLB1 L+325 01/26/2023 Web.com Group Inc. (USD) TL2 L+775 09/17/2026 Duravant LLC (USD) TL2 L+725 07/25/2025 Tacala LLC (USD) TLB L+350 02/05/2027 Verifone Inc. (USD) TL L+400 08/20/2025 |
Colfax Corp. (USD) TLA1 L+150 12/06/2024 DTZ US Borrower LLC (USD) TLB L+275 08/21/2025 Tecomet Inc. (USD) TL L+350 05/01/2024 Albertsons LLC (USD) TL L+275 11/17/2025 Ball Corp. (USD) TLA L+150 03/21/2024 |
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 bp (basis points), as of 07/31/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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