Grid IconAll Posts Market Summaries

North American Bond Research – March 16, 2020

Posted on March 16, 2020
HIGH YIELD BOND RESEARCH
March 16, 2020
Bond Markets

MARKETS GET CRUSHED  AS GOVERNMENTS RACE TO FIGHT THE CORONAVIRUS AND SHORE UP FINANCIAL MARKETS AND ECONOMIES. 10 Year Treasury notes were down 22.3 basis points.  S&P –11.98%, Dow -12.93%, NASDAQ  -12.32%.
CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 180000+ CASES AND 8000+ DEATHS. THE VIRUS SEEMS TO BE SLOWING DOWN IN CHINA AS NEW CASES AND DEATHS SEEM TO BE ACCELERATING INTERNATIONALLY. Among high-grade bonds showing topmost price gains at appreciable volumes traded, JC Penney Co Inc (USD) 7.125% 11/15/2023 made analysts’ ‘Conviction Buy’ list. (See the chart below for JC Penney Co Inc. bonds) Pierre Robert
Key Gainers and Losers Volume Leaders
+   SpringLeaf Finance Corp. 8.25% 12/15/2020 +1.0%
  Radiate Holdco LLC 6.625% 2/15/2025 144A +2.6%
  Barclays PLC 4.836% 5/9/2028 +0.1%
  Frontier Communications Corp. 8% 4/1/2027 144A +0.4%
–   TransDigm Inc. 6.25% 3/15/2026 144A -4.4%
  Kosmos Energy 7.125% 4/4/2026 RegS -35.5%
  HCA Inc. 5% 3/15/2024 -0.7%
  Washington Prime Group LP 5.95% 8/15/2024 -9.5%
TransDigm Inc.   6.25% 3/15/2026 144A
Kosmos Energy   7.125% 4/4/2026 RegS
HCA Inc.   5% 3/15/2024
Washington Prime Group LP   5.95% 8/15/2024
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -1.74% -8.85% -10.24% -8.10% -8.68% 3.86%
Mining -0.28% -22.62% -27.51% -27.36% -28.41% -21.22%
Construction -0.59% -4.12% -4.45% -2.08% -2.34% 8.92%
Manufacturing -0.30% -5.81% -6.85% -4.13% -5.05% 4.27%
Transportion, Communication, Electric/Gas -0.11% -6.88% -7.88% -4.92% -5.80% 4.91%
Wholesale -0.02% -5.45% -6.94% -4.77% -5.57% 2.61%
Retail -0.05% -6.26% -7.70% -5.08% -6.22% 6.17%
Finance, Insurance, Real-Estate -0.50% -5.76% -6.64% -4.61% -5.21% 4.36%
Services -0.22% -6.00% -7.29% -5.41% -6.06% 3.58%
Public Administration -1.99% -10.41% -9.84% -6.89% -7.83% 1.39%
Energy -0.03% -23.00% -27.16% -26.13% -27.75% -20.68%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar

(None Current 03/16/2020)
1. AVI-SPL: $370MM covenant lite TLB (B2/B)

2. Service Logic: $140MM bank debt: $40MM TL; $100MM DD TL

3. CJ Foods Inc.: $285MM TLB

4. Cornerstone Ondemand Inc.: $1.135MM senior secured credit facilities: $150MM revolver; $985MM TLB

5. 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

6. Innovate Xcessories & Services LLC: $695MM credit facilities: $75MM revolver; $620MM TL(B2/B)

7. Instructure: $825MM senior secured credit facilities: $50MM revolver; $775MM TL

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

9. Snapav: $390MM term loans: $290MM TL (B2); $100MM TL

10. Tata Chemicals North America Inc. : $380MM TL (Ba3)

Additional Commentary

NEW ISSUANCE WATCH: on 02/21/2020 participants welcome a $600MM new corporate-bond offering by
Mattamy Group.  The most recent data showed money flowed in of ETF/mutual funds for the week ended 01/10/2020, with a net inflow of $9.8 billion.
Top Widening Loans Top Narrowing Loans
AVSC Holding Corp. (USD) TLB L+450 09/19/2026
Mcjunkin Red Man Corp. (USD) TLB L+275 09/20/2024
Audio Visual Services Corp. (USD) TLB L+325 03/01/2025
CEVA Logistics Holdings BV (USD) TLB L+500 08/03/2025
Kingpin Intermediate Holdings LLC (USD) TLB L+350 07/03/2024
SS&C Technologies Inc. (USD) TLB4 L+175 04/18/2025
Paysafe Group PLC (USD) TL L+350 01/02/2025
Cvent Inc. (USD) TL L+375 11/02/2024
DTZ US Borrower LLC (USD) TLB L+275 08/21/2025
Ancestry.com Operations Inc. (USD) TLB L+325 10/19/2023

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  58 bp (basis points), as of 03/16/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
March 16, 2020
Bond Markets

MARKETS GET CRUSHED  AS GOVERNMENTS RACE TO FIGHT THE CORONAVIRUS AND SHORE UP FINANCIAL MARKETS AND ECONOMIES.  10 Year Treasury notes were down 22.3 basis points.  S&P –11.98%, Dow -12.93%, NASDAQ  -12.32%.
CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 180000+ CASES AND 8000+ DEATHS. THE VIRUS SEEMS TO BE SLOWING DOWN IN CHINA AS NEW CASES AND DEATHS SEEM TO BE ACCELERATING INTERNATIONALLY.  (Advantage Data Inc.). Extensive corporate-bond index data showed a net daily grade increment for high-grade versus high-yield constituents. High-yield bonds edged out high-grade debt as of 3 PM, London time.  Among European high-yield bonds showing a concurrence of top price gains at appreciable volumes traded,  Bombardier Inc. (USD) 7.5% 12/1/2024 Reg S made some analysts ‘Conviction buy’ lists. (See the chart for Bombardier Inc. bonds below). Pierre Robert
Key Gainers and Losers Volume Leaders
+   Amazon.com Inc. 2.8% 8/22/2024 +0.0%
  CVS Health Corp. 4.1% 3/25/2025 +0.1%
  Bank of America Corp. 4.33% 3/15/2050 +2.7%
  Verizon Communications Inc. 4.862% 8/21/2046 +1.6%
–   Anheuser-Busch Inbev Worldwide Inc. 5.55% 1/23/2049 -4.8%
  Bank of America Corp. 2.496% 2/13/2031 -2.8%
  JP Morgan Chase & Co. 4.6% PERP -5.9%
  GE Capital Intl. Funding Co. 4.418% 11/15/2035 -1.8%
Anheuser-Busch Inbev Worldwide Inc.   5.55% 1/23/2049
Bank of America Corp.   2.496% 2/13/2031
JP Morgan Chase & Co.   4.6% PERP
GE Capital Intl. Funding Co.   4.418% 11/15/2035
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.65% -2.08% -1.05% 1.86% 1.39% 5.87%
Mining -0.51% -11.21% -9.98% -8.00% -8.34% 2.99%
Construction -0.68% -6.74% -4.84% -2.44% -2.60% 5.19%
Manufacturing -0.58% -4.43% -1.88% 0.20% 0.14% 9.96%
Transportion, Communication, Electric/Gas -0.63% -6.80% -3.69% -1.16% -1.14% 10.77%
Wholesale -0.72% -4.05% -2.15% -0.21% -0.43% 9.90%
Retail -0.54% -4.84% -1.98% 0.06% 0.05% 10.48%
Finance, Insurance, Real-Estate -0.46% -3.37% -1.41% 0.31% 0.20% 7.90%
Services -0.61% -4.41% -1.71% 0.34% 0.26% 9.90%
Public Administration -0.14% -0.19% 2.01% 2.94% 2.90% 6.30%
Energy -0.64% -11.69% -10.50% -8.50% -8.87% 1.75%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]

(None Current 03/16/2020)
Additional Commentary

NEW ISSUANCE WATCH: on 03/06/2020 participants welcome a $700MM new corporate-bond offering by Key BankThe most recent data showed money flowed in of ETF/mutual funds for the week ended 01/10/2020, with a net inflow of $9.8 billion.
Top Widening Loans Top Narrowing Loans
AVSC Holding Corp. (USD) TLB L+450 09/19/2026
Mcjunkin Red Man Corp. (USD) TLB L+275 09/20/2024
Audio Visual Services Corp. (USD) TLB L+325 03/01/2025
CEVA Logistics Holdings BV (USD) TLB L+500 08/03/2025
Kingpin Intermediate Holdings LLC (USD) TLB L+350 07/03/2024
SS&C Technologies Inc. (USD) TLB4 L+175 04/18/2025
Paysafe Group PLC (USD) TL L+350 01/02/2025
Cvent Inc. (USD) TL L+375 11/02/2024
DTZ US Borrower LLC (USD) TLB L+275 08/21/2025
Ancestry.com Operations Inc. (USD) TLB L+325 10/19/2023

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 58 bp (basis points), as of 03/16/2020
  • Net positive capital flows into high-yield ETFs & mutual funds

Copyright 2019 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.

 


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