THE CORONA VIRUS SPREAD IN MULTIPLE STATES AT THE SLOWEST RATE IN OVER A WEEK. EMERGING TREATMENTS ARE HELPING SPEED UP RECOVERY AND HELP LESSEN THE NEED FOR RESPIRATORS. 10 Year Treasury notes were up 1.7 bps. S&P +1.54%, Dow +0.85%, NASDAQ +1.87%.
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Market Summaries
North American Bond Research – June 30, 2020
Posted on June 30, 2020|
HIGH YIELD BOND RESEARCH
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June 30, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 10.6 MILLION+ CASES AND 512000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 2.7 MILLION+ CASES AND 130000+ 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 Chesapeake Energy Corp. 7% 10/1/2024 Delta Airlines 7.375% 1/15/2026 Pacific Gas & Electric Co. 3.75% 2/15/2024 PG&E Corp. 5% 7/1/2028 Occidental Petroleum Corp. 8.875% 7/15/2030 Ford Motor Co. 8.5% 4/21/2023 Pacific Gas & Electric Co. 2.95% 3/1/2026 Western Digital Corp. 4.75% 2/15/2026 Meredith Corp. 6.875% 2/1/2026 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Enviva Partners LP (USD) 6.5% 1/15/2026 (06/29/2020): 150MM Senior Unsecured Notes, Price at Issuance 103.75, Yielding 5.7%.
2. Garda World Security Corp. (USD) 4.625% 2/15/2027 Reg S (06/29/2020): 120MM First Lien Notes, Price at Issuance 98, Yielding 4.98%. |
1. Martin Midstream Partners LP: $400MM senior secured notes
2. Carnival Cruise Line: $2.76B equivalent U.S. and euro five-year term B (Baa3); $1.86B TL; ¬800 TL 3. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL 4. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 5. Ultimate Software Group: $3.545B Term Loans: $2.945B TLB (B1/B); $600MM TL (Caa1/CCC) 6. Angus Chemical Co. : $500MM TL (B1/B/BB+): equivalent U.S. and euro 7. Blucora Inc.: $175MM add-on senior secured TL (BB) 8. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 9. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 10. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL |
Additional Commentary
NEW ISSUANCE WATCH: Enviva Partners LP issued $150MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Superior Industries Intl. Inc. (USD) TLB L+400 05/23/2024 Hurtigruten Group AS (EUR) TLC E+800 06/16/2023 Syncsort Inc. (USD) TLB L+600 08/16/2024 Automate Intermediate Hldg II Sarl (EUR) TLB E+350 07/22/2026 |
Distributed Power Inc. (USD) TLB L+325 11/02/2025 PortAventura World (EUR) TLB E+350 06/14/2024 Moneygram Intl. Inc. (USD) TLB L+600 06/30/2023 American Renal Holdings Inc. (USD) TLB L+325 06/22/2024 Philadelphia Energy Solutions (USD) TLA L+625 12/31/2022 |
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 17 bp (basis points), as of 06/30/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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June 30, 2020
|
Bond Markets
THE CORONA VIRUS SPREAD IN MULTIPLE STATES AT THE SLOWEST RATE IN OVER A WEEK. EMERGING TREATMENTS ARE HELPING SPEED UP RECOVERY AND HELP LESSEN THE NEED FOR RESPIRATORS. 10 Year Treasury notes were up 1.7 bps. S&P +1.54%, Dow +0.85%, NASDAQ +1.87%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 10.6 MILLION+ CASES AND 512000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 2.7 MILLION+ CASES AND 130000+ 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. 5.15% 5/1/2030 General Electric Co. 4.35% 5/1/2050 Citigroup Inc. 2.572% 6/3/2031 Amazon.com Inc. 1.5% 6/3/2030 Bank of America Corp. VAR% 6/19/2041 Amazon.com Inc. 2.7% 6/3/2060 Pacific Gas & Electric Co. 2.5% 2/1/2031 Pacific Gas & Electric Co. 3.5% 8/1/2050 AerCap Ireland Capital LTD 6.5% 7/15/2025 Fifth Third Bank Cincinnati OH 2.25% 6/14/2021 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. AIG Global Funding (USD) 0.8% 7/7/2023 144A (06/29/2020): 500MM Secured Notes, Price at Issuance 99.923, Yielding .83%.
2. AIG Global Funding (USD) 0.8% 7/7/2023 Reg S (06/29/2020): 500MM Secured Notes, Price at Issuance 99.923, Yielding .83%. 3. AEP Texas Inc. (USD) 2.1% 7/1/2030 (06/29/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.597, Yielding 2.14%. 4. Met Life Global Funding Inc. (USD) 0.95% 7/2/2025 144A (06/29/2020): 750MM Secured Notes, Price at Issuance 99.825, Yielding .99%. 5. Met Life Global Funding Inc. (USD) 0.95% 7/2/2025 Reg S (06/29/2020): 750MM Secured Notes, Price at Issuance 99.825, Yielding .99%. 6. Equitable Financial Life (USD) 1.4% 7/7/2025 144A (06/29/2020): 650MM Secured Notes, Price at Issuance 99.817, Yielding 1.44%. 7. Equitable Financial Life (USD) 1.4% 7/7/2025 Reg S (06/29/2020): 650MM Secured Notes, Price at Issuance 99.817, Yielding 1.44%. 8. Children’s Hospital Corp (USD) 2.585% 2/1/2050 (06/29/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.59%. 9. Deutsche Bank AG of New York (USD) VAR% 7/8/2031 (06/29/2020): 500MM Subordinated Notes, Price at Issuance 100. 10. Sumitomo Mitsui Fin Grp Inc. (USD) 2.13% 7/8/2030 (06/29/2020): 1500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.13%. |
Additional Commentary
NEW ISSUANCE WATCH: on 06/30/2020 participants welcome a $500MM new corporate-bond offering by AIG Global Funding.
| Top Widening Loans | Top Narrowing Loans |
| Superior Industries Intl. Inc. (USD) TLB L+400 05/23/2024 Hurtigruten Group AS (EUR) TLC E+800 06/16/2023 Syncsort Inc. (USD) TLB L+600 08/16/2024 Automate Intermediate Hldg II Sarl (EUR) TLB E+350 07/22/2026 Automate Intermediate Hldg II Sarl (USD) TLB L+425 07/22/2026 |
Distributed Power Inc. (USD) TLB L+325 11/02/2025 PortAventura World (EUR) TLB E+350 06/14/2024 Moneygram Intl. Inc. (USD) TLB L+600 06/30/2023 American Renal Holdings Inc. (USD) TLB L+325 06/22/2024 Philadelphia Energy Solutions (USD) TLA L+625 12/31/2022 |
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 17 bp (basis points), as of 06/30/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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