FED HELD RATES NEAR ZERO CAUSING MARKETS TO MOSTLY FALL. FED PROJECTED GDP CONTRACTION IN THE RANGE OF 4-10% NASDAQ AND TECHNOLOGY STOCKS DID HAVE AN UPDAY AGAIN. FTSE 100 -0.1%, 10 Year Treasury notes were down 8.1 basis points. S&P -.53%, Dow -1.04%, NASDAQ +0.67%.
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Market Summaries
North American Bond Research – June 10, 2020
Posted on June 10, 2020|
HIGH YIELD BOND RESEARCH
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June 10, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 7.4 MILLION+ CASES AND 416000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 2.1 MILLION+ CASES AND 115000+ 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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T-Mobile USA Inc. 3.875% 4/15/2030 144A Hertz Corp. 6.25% 10/15/2022 T-Mobile USA Inc. 3.75% 4/15/2027 144A Hertz Corp. 5.5% 10/15/2024 Reg S Ford Motor Co. 9% 4/22/2025 T-Mobile USA Inc. 3.5% 4/15/2025 144A Micron Technology Inc. 5.327% 2/6/2029 Enbridge Inc. VAR% 3/1/2089 United Rentals North AM 4% 7/15/2030 Sprint Capital Corp. 6.875% 11/15/2028 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. American Axle & Manufacturing Inc. (USD) 6.875% 7/1/2028 (06/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.88%.
2. BWX Technologies Inc. (USD) 4.125% 6/30/2028 Reg S (06/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.13%. 3. BWX Technologies Inc. (USD) 4.125% 6/30/2028 144A (06/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.13%. 4. HTA Group Ltd (USD) 7% 12/18/2025 144A (06/09/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.439, Yielding 7.12%. 5. Realogy Group LLC (USD) 7.625% 6/15/2025 Reg S (06/09/2020): 550MM Second Lien Notes, Price at Issuance 100, Yielding 7.63%. 6. Hillenbrand Inc. (USD) 5.75% 6/15/2025 (06/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%. 7. Realogy Group LLC (USD) 7.625% 6/15/2025 144A (06/09/2020): 550MM Second Lien Notes, Price at Issuance 100, Yielding 7.63%. 8. Delta Airlines (USD) 7.375% 1/15/2026 (06/10/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.986, Yielding 7.38%. 9. Level 3 Financing Inc. (USD) 4.25% 7/1/2028 (06/10/2020): 1200MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.25%. 10. Great Southern Bancorp Inc. (USD) VAR% 6/15/2030 (06/10/2020): 75MM Subordinated Notes, Price at Issuance 100. |
1. Eldorado Resorts Inc./Caesars Entertainment Corp.: $6.4B credit facilities:$1B revolver at Eldorados; $3B seven-year cove-lite TLB due 2027 at Eldorado; $2.4B seven-year cove-lite TLB due 2027 at Caesars Resorts Collection
2. Hamilton Projects Acquiror LLC: $1.015B credit facilities: $115MM revolver; $900MM TLB 3. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL 4. Mohegan Tribal Gaming Authority: $100MM first lein TL (Caa1) 5. Radio Systems Corp.: $725MM Loans: $100M ABL Facility; $625MM Senior secured bridge loan 6. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 7. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 8. Xplorenet Communictations Inc.: $1.425B credit facilities (B3/B-): $150MM revolver; $1.275B first-lien TL 9. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 10. Xplorenet Communictations Inc.: $1.425B credit facilities (B3/B-): $150MM revolver; $1.275B first-lien TL |
Additional Commentary
NEW ISSUANCE WATCH: Realogy Group LLC issued $550MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Jostens Inc. (USD) TL L+950 12/21/2026 Specialty Chemical Resources Inc. (EUR) TLB1 E+450 03/05/2027 Ahlsell AB (EUR) TL E+825 03/01/2027 Paysafe Group PLC (EUR) TL E+700 12/01/2025 Concordia International (USD) TL EXIT L+550 09/06/2024 |
Speedster Bidco GmbH (EUR) TL E+625 02/14/2028 Albea Beauty Holdings SA (USD) TLB L+300 04/12/2024 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 American Gaming Systems (USD) TLB L+350 02/15/2024 Alera Group Holdings Inc. (USD) TLB L+450 08/01/2025 |
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 bp (basis points), as of 06/10/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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June 10, 2020
|
Bond Markets
FED HELD RATES NEAR ZERO CAUSING MARKETS TO MOSTLY FALL. FED PROJECTED GDP CONTRACTION IN THE RANGE OF 4-10% NASDAQ AND TECHNOLOGY STOCKS DID HAVE AN UPDAY AGAIN. FTSE 100 -0.1%, 10 Year Treasury notes were down 8.1 basis points. S&P -.53%, Dow -1.04%, NASDAQ +0.67%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 7.4 MILLION+ CASES AND 416000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 2.1 MILLION+ CASES AND 115000+ 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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Southwest Airlines Co. 1.25% 5/1/2025 Boeing Co. 5.805% 5/1/2050 CVS Health Corp. 5.05% 3/25/2048 General Electric Co. 4.35% 5/1/2050 Equinix Inc. 3% 7/15/2050 JPMorgan Chase & Co. 5% PERP (1) GE Capital Intl. Funding Co. 4.418% 11/15/2035 AT&T Inc. 3.65% 6/1/2051 Southwest Airlines Co. 4.75% 5/4/2023 Citigroup Inc. 2.572% 6/3/2031 |
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| New Issues | New Issues [Continued] |
|---|---|
| 1. H&R Real Estate Investment Trust (CAD) 4.071% 6/16/2025 (06/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.07%.
2. Saputo Inc. (CAD) 2.242% 6/16/2027 (06/09/2020): 700MM Unsecured Notes, Price at Issuance 100, Yielding 2.24%. 3. Pacific Premier Bancorp Inc. (USD) VAR% 6/15/2030 (06/09/2020): 150MM Subordinated Notes, Price at Issuance 100. 4. Memorial Sloan-Kettering (USD) 2.955% 1/1/2050 (06/09/2020): 450MM Unsecured Notes, Price at Issuance 100, Yielding 2.96%. 5. Hewlett-Packard Co. (USD) 3.4% 6/17/2030 (06/09/2020): 850MM Senior Unsecured Notes, Price at Issuance 99.79, Yielding 3.42%. 6. Hewlett-Packard Co. (USD) 2.2% 6/17/2025 (06/09/2020): 1150MM Senior Unsecured Notes, Price at Issuance 99.769, Yielding 2.25%. 7. Hewlett-Packard Co. (USD) 3% 6/17/2027 (06/09/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.718, Yielding 3.04%. 8. Memorial Sloan-Kettering (USD) 2.65% 1/1/2040 (06/09/2020): 50MM Unsecured Notes, Price at Issuance 100, Yielding 2.65%. 9. Credit Agricole London (USD) VAR% 6/16/2026 144A (06/09/2020): 1500MM Senior Non Preferred Notes, Price at Issuance 100. 10. Credit Agricole London (USD) 1.907% 6/16/2026 Reg S (06/09/2020): 1500MM Senior Non Preferred Notes, Price at Issuance 100, Yielding 1.91%. |
Additional Commentary
NEW ISSUANCE WATCH: on 06/10/2020 participants welcome a $3000MM new corporate-bond offering by Hewlett-Packard Co.
| Top Widening Loans | Top Narrowing Loans |
| Jostens Inc. (USD) TL L+950 12/21/2026 Specialty Chemical Resources Inc. (EUR) TLB1 E+450 03/05/2027 Ahlsell AB (EUR) TL E+825 03/01/2027 Paysafe Group PLC (EUR) TL E+700 12/01/2025 Concordia International (USD) TL EXIT L+550 09/06/2024 |
Speedster Bidco GmbH (EUR) TL E+625 02/14/2028 Albea Beauty Holdings SA (USD) TLB L+300 04/12/2024 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 American Gaming Systems (USD) TLB L+350 02/15/2024 Alera Group Holdings Inc. (USD) TLB L+450 08/01/2025 |
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 bp (basis points), as of 06/10/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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