Grid IconAll Posts Market Summaries

North American Bond Research – June 12, 2020

Posted on June 12, 2020
INVESTMENT GRADE BOND RESEARCH
June 12, 2020
Bond Markets
MARKETS REBOUND BUT STILL END THE WEEK DOWN. VIX IS UP ALMOST 50%. THIS WEEK POINTING TO MORE ANXIETY BUILDING UP IN THE GLOBAL FINANCIAL SYSTEMS.  10 Year Treasury notes were up 4.6 basis points. S&P +1.31%, Dow +1.9%, NASDAQ +1.01%.

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 7.7 MILLION+ CASES AND 427000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 2.1 MILLION+ CASES AND 117000+ 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
+   Boeing Co. 5.805% 5/1/2050 +1.0%
  Boeing Co. 5.15% 5/1/2030 +0.8%
  General Electric Co. 4.35% 5/1/2050 +3.0%
  Boeing Co. 5.93% 5/1/2060 +2.1%
  CVS Health Corp. 5.05% 3/25/2048 +0.2%
–   Pfizer Inc. 2.7% 5/28/2050 -1.1%
  Walt Disney Co. 2.65% 1/13/2031 -0.1%
  Amazon.com Inc. 2.7% 6/3/2060 -0.2%
  AT&T Inc. 3.85% 6/1/2060 -0.7%
  Amazon.com Inc. 2.5% 6/3/2050 -0.3%
Boeing Co.   5.805% 5/1/2050
Boeing Co.   5.15% 5/1/2030
General Electric Co.   4.35% 5/1/2050
Boeing Co.   5.93% 5/1/2060
Walt Disney Co.   2.65% 1/13/2031
Amazon.com Inc.   2.7% 6/3/2060
CVS Health Corp.   5.05% 3/25/2048
Amazon.com Inc.   1.2% 6/3/2027
Steel Dynamics   3.25% 1/15/2031
AT&T Inc.   3.85% 6/1/2060
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Mining -0.23% 1.13% 7.38% 5.43% 1.55% 8.08%
Construction 0.12% 1.04% 2.83% -0.27% 2.67% 7.49%
Manufacturing -0.05% 0.78% 3.38% 1.49% 4.70% 11.08%
Transportion, Communication, Electric/Gas -0.04% 1.24% 4.09% 2.59% 5.52% 12.98%
Wholesale 0.01% 1.29% 4.48% 1.09% 3.56% 10.68%
Retail 0.01% 1.13% 3.88% 1.92% 5.63% 12.89%
Finance, Insurance, Real-Estate -0.03% 0.78% 2.87% 1.31% 3.67% 8.46%
Services -0.01% 0.83% 3.20% 0.21% 3.97% 9.98%
Public Administration 0.07% 0.16% 0.18% 0.90% 4.26% 5.55%
Energy -0.28% 1.19% 7.81% 6.93% 1.77% 8.34%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Alpine Banks Of Colorado (USD) VAR% 6/15/2030 (06/11/2020): 50MM Senior Unsecured Notes, Price at Issuance 100.

2. Alpine Banks Of Colorado (USD) VAR% 6/15/2030 (06/11/2020): 50MM Senior Unsecured Notes, Price at Issuance 100.

3. Fidelis Insur HLD LTD (USD) 4.875% 6/30/2030 Reg S (06/11/2020): 300MM Senior Unsecured Notes, Price at Issuance 99.021, Yielding 5%.

4. Bemis Co. Inc. (USD) 2.63% 6/19/2030 (06/12/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.63%.

5. Black Hills Corp. (USD) 2.5% 6/15/2030 (06/12/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.658, Yielding 2.54%.

6. Morgan Stanley (USD) 6.25% 6/29/2035 (06/12/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.25%.

7. United Community Banks Inc. (USD) 5% 6/15/2030 (06/12/2020): 100MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%.
Additional Commentary
NEW ISSUANCE WATCH: on 06/10/2020 participants welcome a $500MM new corporate-bond offering by Bemis Co. Inc.
Top Widening Loans Top Narrowing Loans
OVH Groupe (EUR) TLB E+325 11/29/2026
Eaglepicher Inc. (USD) TL L+725 03/09/2026
Koninklijke Ten Cate NV (EUR) TLB E+350 01/27/2023
NN Inc. (USD) TL L+525 10/19/2022
Nets Hldgs AS (EUR) TL E+700 02/06/2027		 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027
Flint Group (USD) TLB2 L+300 09/07/2021
Welbilt Corp. (USD) TL L+250 10/24/2025
CH Guenther & Son Inc. (USD) TLB L+275 03/23/2025
SMG (USD) Bridge TL L+250 01/23/2025

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 14 bp (basis points), as of 06/11/2020
  • Net positive capital flows into high-yield ETFs & mutual funds

 

HIGH YIELD BOND RESEARCH
June 12, 2020
Bond Markets
MARKETS REBOUND BUT STILL END THE WEEK DOWN. VIX IS UP ALMOST 50%. THIS WEEK POINTING TO MORE ANXIETY BUILDING UP IN THE GLOBAL FINANCIAL SYSTEMS.  10 Year Treasury notes were up 4.6 basis points. S&P +1.31%, Dow +1.9%, NASDAQ +1.01%.

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 7.6 MILLION+ CASES AND 422000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 2.1 MILLION+ CASES AND 117000+ 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
+   Hertz Corp. 6.25% 10/15/2022 +43.6%
  Petrobras Global Finance BV 6.85% 6/5/2115 +1.2%
  T-Mobile USA Inc. 3.875% 4/15/2030 144A +0.5%
  Ford Motor Co. 8.5% 4/21/2023 +1.3%
  Delta Airlines 7.375% 1/15/2026 +1.8%
–   General Motors Co. 5.2% 4/1/2045 -1.1%
  Summit Midstream Hldg LLC 5.75% 4/15/2025 -0.9%
  Qorvo Inc. 5.5% 7/15/2026 (1) -0.1%
  Group 1 Automotive 5% 6/1/2022 -0.3%
  CenterPoint Energy Inc. VAR% PERP -2.0%
Hertz Corp.   6.25% 10/15/2022
Petrobras Global Finance BV   6.85% 6/5/2115
T-Mobile USA Inc.   3.875% 4/15/2030 144A
Ford Motor Co.   8.5% 4/21/2023
Delta Airlines   7.375% 1/15/2026
T-Mobile USA Inc.   3.5% 4/15/2025 144A
Ford Motor Co.   9% 4/22/2025
General Motors Co.   5.2% 4/1/2045
Occidental Petroleum Corp.   2.7% 8/15/2022
Micron Technology Inc.   4.975% 2/6/2026
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.44% 0.03% 3.37% 2.75% 1.43% 8.63%
Mining -1.65% 2.45% 21.61% 2.30% -17.48% -10.66%
Construction -0.61% -0.18% 5.27% -1.07% -0.94% 6.18%
Manufacturing -0.69% 0.24% 5.67% 0.61% -1.26% 5.25%
Transportion, Communication, Electric/Gas -0.62% 0.00% 4.68% 2.57% 1.00% 7.22%
Wholesale -0.49% 1.19% 6.21% 2.55% -2.29% 2.95%
Retail -0.67% 0.75% 7.80% -1.88% -2.96% 3.25%
Finance, Insurance, Real-Estate -0.54% 0.71% 6.18% -1.36% -2.66% 3.60%
Services -0.77% -0.13% 6.50% -0.02% -1.41% 5.49%
Public Administration -0.28% 0.94% 6.04% 3.44% 0.35% 7.45%
Energy -1.54% 2.05% 19.08% 5.45% -14.09% -8.26%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. Watco Cos Inc. (USD) 6.5% 6/15/2027 144A (06/11/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.5%.

2. Watco Cos Inc. (USD) 6.5% 6/15/2027 Reg S (06/11/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.5%.

3. Fidelis Insur HLD LTD (USD) 4.875% 6/30/2030 144A (06/11/2020): 300MM Senior Unsecured Notes, Price at Issuance 99.021, Yielding 5%.

4. Wynn Macau LTD (USD) 5.5% 1/15/2026 144A (06/12/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%.

5. Wynn Macau LTD (USD) 5.5% 1/15/2026 Reg S (06/12/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%.

6. WR Grace & Co. (USD) 4.875% 6/15/2027 144A (06/12/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%.

7. WR Grace & Co. (USD) 4.875% 6/15/2027 Reg S (06/12/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%.

 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. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL

3. Mohegan Tribal Gaming Authority: $100MM first lein TL (Caa1)

4. Radio Systems Corp.: $725MM Loans: $100M ABL Facility; $625MM Senior secured bridge loan

5. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL

6. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A

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. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL

10. Radio Systems Corp.: $725MM Loans: $100M ABL Facility; $625MM Senior secured bridge loan
Additional Commentary
NEW ISSUANCE WATCH: WR GRACE & Co. issued $750MM in notes.
Top Widening Loans Top Narrowing Loans
OVH Groupe (EUR) TLB E+325 11/29/2026
Eaglepicher Inc. (USD) TL L+725 03/09/2026
Koninklijke Ten Cate NV (EUR) TLB E+350 01/27/2023
NN Inc. (USD) TL L+525 10/19/2022
Nets Hldgs AS (EUR) TL E+700 02/06/2027		 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027
Flint Group (USD) TLB2 L+300 09/07/2021
Welbilt Corp. (USD) TL L+250 10/24/2025
CH Guenther & Son Inc. (USD) TLB L+275 03/23/2025
SMG (USD) Bridge TL L+250 01/23/2025

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 14 bp (basis points), as of 06/12/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

Copyright 2020 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

Disclaimer: The information on this blog site is for informational purposes only.  Advantage Data makes no representations as to the accuracy, completeness, suitability, or validity, of any information. Advantage Data will not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. All information is provided AS-IS with no warranties and confers no rights. Information is not and should not be considered professional financial investment advice. In all events, Advantage Data is not a broker-dealer, shall not operate as a broker or a dealer, is not holding itself out as a broker or dealer and is not engaged in the business of buying or selling securities or otherwise required to register with the National Association of Securities Dealers.

Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 300,000+ BDC fair value assessments dating back to 2000
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 15 products and services from debt to loans to mid-market
  • Used by top buy and sell-side firms worldwide

Share

facebook share icon twitter share icon linkedin share icon
Ready to get Started? Free Trial