MARKETS, DURING CORONAVIRUS AND RACE RIOTS, FEEL THERE WILL BE A “V” SHAPE RECOVERY IN THE ECONOMY. OIL IS SIMILARLY SOARING UP TO $36.75 A BARREL. 10 Year Treasury notes were up 1.8 basis points. S&P +0.82%, Dow +1.05%, NASDAQ +0.59%.
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Market Summaries
North American Bond Research – June 2, 2020
Posted on June 2, 2020|
HIGH YIELD BOND RESEARCH
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June 2, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 6.4 MILLION+ CASES AND 380000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.88 MILLION+ CASES AND 108000+ 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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Ford Motor Co. 8.5% 4/21/2023 Sabine Pass Liquefaction LLC 5.625% 3/1/2025 Petrobras Global Finance BV 7.375% 1/17/2027 EQT Corp. 6.125% 2/1/2025 Latam Finance Limited 6.875% 4/11/2024 Reg S Ford Motor Co. 9% 4/22/2025 Sprint Capital Corp. 6.875% 11/15/2028 EQT Midstream Partners LP 4.75% 7/15/2023 Petrobras Global Finance BV 8.75% 5/23/2026 Pacific Gas & Electric Co. 6.05% 3/1/2034 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Picasso Finance Sub Inc. (USD) 6.125% 6/15/2025 144A (06/01/2020): 650MM Secured Notes, Price at Issuance 100, Yielding 6.13%.
2. Picasso Finance Sub Inc. (USD) 6.125% 6/15/2025 Reg S (06/01/2020): 650MM Secured Notes, Price at Issuance 100, Yielding 6.13%. 3. Axalta Coating Systems Dutch Holding B BV (USD) 4.75% 6/15/2027 144A (06/01/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%. 4. Virgin Media Finance PLC (USD) 5% 7/15/2030 144A (06/01/2020): 675MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%. 5. Virgin Media Finance PLC (USD) 5% 7/15/2030 Reg S (06/01/2020): 675MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%. 6. Axalta Coating Systems Dutch Holding B BV (USD) 4.75% 6/15/2027 Reg S (06/01/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%. |
1. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A
2. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 3. Radio Systems Corp.: $725MM Loans: $100M ABL Facility; $625MM Senior secured bridge loan 4. Mohegan Tribal Gaming Authority: $100MM first lein TL (Caa1) 5. Xplorenet Communictations Inc.: $1.425B credit facilities (B3/B-): $150MM revolver; $1.275B first-lien TL 6. 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 7. Championx: $537MM TL 8. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL 9. Martin Midstream Partners LP: $400MM senior secured notes 10. Xplorenet Communictations Inc.: $1.425B credit facilities (B3/B-): $150MM revolver; $1.275B first-lien TL |
Additional Commentary
NEW ISSUANCE WATCH: Picasso Finance Sub issued $650 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Diamond Resorts Intl. (USD) TLB L+375 09/02/2023 Fleetpride Corp. (USD) TL L+800 12/19/2026 Compass IV LTD (EUR) TLB E+450 05/09/2025 American Greetings Corp. (USD) TLB L+450 04/06/2024 Aretec Group Inc (USD) TL L+425 10/01/2025 |
ProFrac Services LLC (USD) TLB L+575 09/06/2023 Alterra Mountain (USD) TLB L+450 05/13/2026 Flint Group (USD) TLB2 L+300 09/07/2021 Delek (USD) TLB L+550 03/30/2025 ConvergeOne LLC (USD) TL L+500 01/04/2026 |
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 21 bp (basis points), as of 06/02/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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June 2, 2020
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Bond Markets
MARKETS, DURING CORONAVIRUS AND RACE RIOTS, FEEL THERE WILL BE A “V” SHAPE RECOVERY IN THE ECONOMY. OIL IS SIMILARLY SOARING UP TO $36.75 A BARREL. 10 Year Treasury notes were up 1.8 basis points. S&P +0.82%, Dow +1.05%, NASDAQ +0.59%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 6.4 MILLION+ CASES AND 380000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.88 MILLION+ CASES AND 108000+ 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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Boeing Co. 5.805% 5/1/2050 Southwest Airlines Co. 1.25% 5/1/2025 Boeing Co. 5.93% 5/1/2060 Walt Disney Co. 3.6% 1/13/2051 Marriott Intl Inc. 4.625% 6/15/2030 Stryker Corp. 1.95% 6/15/2030 Citigroup Inc. 2.572% 6/3/2031 Wells Fargo & Co. VAR% 6/2/2028 AT&T Inc. 3.65% 6/1/2051 Anthem Inc. 2.25% 5/15/2030 |
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Met Life Global Funding Inc. (USD) 0.9% 6/8/2023 Reg S (06/01/2020): 1000MM Secured Notes, Price at Issuance 99.855, Yielding .95%.
2. Ally Financial Inc. (USD) 3.05% 6/5/2023 (06/01/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.299, Yielding 3.3%. 3. American Tower Corp. (USD) 3.1% 6/15/2050 (06/01/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.014, Yielding 3.15%. 4. Amazon.com Inc. (USD) 1.5% 6/3/2030 (06/01/2020): 2000MM Senior Unsecured Notes, Price at Issuance 99.889, Yielding 1.51%. 5. American Tower Corp. (USD) 2.1% 6/15/2030 (06/01/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.425, Yielding 2.16%. 6. Amazon.com Inc. (USD) 2.5% 6/3/2050 (06/01/2020): 2500MM Senior Unsecured Notes, Price at Issuance 98.977, Yielding 2.55%. 7. Amazon.com Inc. (USD) 2.7% 6/3/2060 (06/01/2020): 200MM Senior Unsecured Notes, Price at Issuance 98.816, Yielding 2.75%. 8. American Tower Corp. (USD) 1.3% 9/15/2025 (06/01/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.719, Yielding 1.36%. 9. Amazon.com Inc. (USD) 1.2% 6/3/2027 (06/01/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.967, Yielding 1.2%. 10. Amazon.com Inc. (USD) 0.4% 6/3/2023 (06/01/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.86, Yielding .45%. |
Additional Commentary
NEW ISSUANCE WATCH: on 06/02/2020 participants welcome a $7000MM new corporate-bond offering by Amazon.com Inc.
| Top Widening Loans | Top Narrowing Loans |
| Diamond Resorts Intl. (USD) TLB L+375 09/02/2023 Fleetpride Corp. (USD) TL L+800 12/19/2026 Compass IV LTD (EUR) TLB E+450 05/09/2025 American Greetings Corp. (USD) TLB L+450 04/06/2024 Aretec Group Inc (USD) TL L+425 10/01/2025 |
ProFrac Services LLC (USD) TLB L+575 09/06/2023 Alterra Mountain (USD) TLB L+450 05/13/2026 Flint Group (USD) TLB2 L+300 09/07/2021 Delek (USD) TLB L+550 03/30/2025 ConvergeOne LLC (USD) TL L+500 01/04/2026 |
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 21 bp (basis points), as of 06/02/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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