TRUMP THREATENING TO LEVY TARIFFS AGAINST CHINA. AMAZON’S REVENUES WERE UP, BUT ITS PROFITS WERE WAY DOWN. FINANCIAL FALLOUT FROM COVID-19 IS SPREADING WIDELY. 10 Year Treasury notes were up 2 basis points. S&P -2.81%, Dow -2.55%, NASDAQ -3.83%.
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Market Summaries
North American Bond Research – May 1, 2020
Posted on May 1, 2020|
HIGH YIELD BOND RESEARCH
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May 1, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.33 MILLION+ CASES AND 240000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.12 MILLION+ CASES AND 65500+ DEATHS. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Ferrellgas Partners LP (USD) 8.625% 6/15/2020 made analysts’ ‘Conviction Buy’ list. (See the chart below for Ferrellgas Partners LP bonds) Pierre Robert
| Key Gainers and Losers | Volume Leaders | ||||||||||||||||||||||||||||||
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Ford Motor Co. 9% 4/22/2025 MGM Resorts Intl 6.75% 5/1/2025 Ford Motor Co. 9.625% 4/22/2030 Macy’s Retail Hldg Inc. 3.625% 6/1/2024 Ford Motor Co. 8.5% 4/21/2023 Hertz Corp. 6.25% 10/15/2022 Occidental Petroleum Corp. 2.9% 8/15/2024 Southwestern Energy Co. 7.5% 4/1/2026 Antero Resources Finance Corp. 5.375% 11/1/2021 Diamondback Energy Inc. 3.5% 12/1/2029 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Vail Resorts Inc. (USD) 6.25% 5/15/2025 144A (04/30/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.25%.
2. HanesBrands Inc. (USD) 5.375% 5/15/2025 144A (04/30/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.38%. 3. HanesBrands Inc. (USD) 5.375% 5/15/2025 Reg S (04/30/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.38%. 4. Tempo Acquisition LLC/FI (USD) 5.75% 6/1/2025 144A (04/30/2020): 300MM First Lien Notes, Price at Issuance 100, Yielding 5.75%. |
1. Open Lending LLC: $225MM TLB
2. Xperi Corp. : $1.1B seven-year secured covenant lite TLB 3. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 4. T-Mobile USA Inc.: $8B senior secured credit facilities: $4B five-year revolver; $4B seven-year cove-lite TL 5. Tata Chemicals North America Inc. : $380MM TL (Ba3) 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. Service Logic: $140MM bank debt: $40MM TL; $100MM DD TL |
Additional Commentary
NEW ISSUANCE WATCH: Vail Resorts issued $600 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Nets Hldgs AS (NOK) TLB1N L+400 02/06/2025 USIC Holdings Inc. (USD) TL L+325 12/09/2023 Savage Enterprises LLC (USD) TLB L+300 08/02/2025 Monitronics Intl. Inc. (USD) TL EXIT L+500 07/03/2024 SMG (USD) Bridge TL L+250 01/23/2025 |
Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Internet Brands Inc. (USD) TL2 L+750 08/16/2025 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 Hayward Ind Inc (USD) TLB L+350 08/04/2024 Beteiligungsgesellschaft Fuer Pensionsgelder (EUR) TLB E+350 06/14/2024 |
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 46 bp (basis points), as of 05/01/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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May 1, 2020
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Bond Markets
TRUMP THREATENING TO LEVY TARIFFS AGAINST CHINA. AMAZON’S REVENUES WERE UP, BUT ITS PROFITS WERE WAY DOWN. FINANCIAL FALLOUT FROM COVID-19 IS SPREADING WIDELY. 10 Year Treasury notes were up 2 basis points. S&P -2.81%, Dow -2.55%, NASDAQ -3.83%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.2 MILLION+ CASES AND 227000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.1 MILLION+ CASES AND 64000+ DEATHS. Among high-grade bonds showing topmost price gains at appreciable volumes traded, United Parcel Service Inc. (USD) 4.875% 11/15/2040 made analysts’ ‘Conviction Buy’ list. (See the chart below for United Parcel Service Inc. bonds) Pierre Robert
| Key Gainers and Losers | Volume Leaders | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Southwest Airlines Co. 1.25% 5/1/2025 Wells Fargo & Co. 3.068% 4/30/2041 General Electric Co. 4.35% 5/1/2050 Citigroup Inc. 4.412% 3/31/2031 Coca-Cola Co. 2.6% 6/1/2050 Boeing Co. 2.3% 8/1/2021 Coca-Cola Co. 1.65% 6/1/2030 Goldman Sachs Group Inc. 3.5% 4/1/2025 Public Storage 3.385% 5/1/2029 Marriott Intl Inc. 5.75% 5/1/2025 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Tempo Acquisition LLC/FI (USD) 5.75% 6/1/2025 Reg S (04/30/2020): 300MM First Lien Notes, Price at Issuance 100, Yielding 5.75%.
2. Export Development Canada (USD) 0.375% 11/12/2021 (04/30/2020): 250MM Senior Unsecured Notes. 3. Loblaw Cos LTD (CAD) 2.284% 5/7/2030 (04/30/2020): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.28%. 4. Cominar REIT (CAD) 5.95% 5/5/2025 (04/30/2020): 150MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.95%. 5. Anthem Inc. (USD) 3.125% 5/15/2050 (04/30/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.748, Yielding 3.14%. 6. Anthem Inc. (USD) 2.25% 5/15/2030 (04/30/2020): 1100MM Senior Unsecured Notes, Price at Issuance 99.625, Yielding 2.29%. 7. Reliance Standard Life Global Funding II (USD) 2.75% 5/7/2025 144A (04/30/2020): 400MM Secured Notes, Price at Issuance 99.565, Yielding 2.84%. 8. NVR Inc. (USD) 3% 5/15/2030 (04/30/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.81, Yielding 3.02%. 9. Fred Hutchinson Cancer Research Center (USD) 3.949% 1/1/2050 (04/30/2020): 121MM Unsecured Notes, Price at Issuance 100, Yielding 3.95%. 10. Norfolk Southern Corp. (USD) 3.05% 5/11/2050 (04/30/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.765, Yielding 3.06%. |
Additional Commentary
NEW ISSUANCE WATCH: on 05/01/2020 participants welcome a $2100MM new corporate-bond offering by Anthem Inc.
| Top Widening Loans | Top Narrowing Loans |
| Nets Hldgs AS (NOK) TLB1N L+400 02/06/2025 USIC Holdings Inc. (USD) TL L+325 12/09/2023 Savage Enterprises LLC (USD) TLB L+300 08/02/2025 Monitronics Intl. Inc. (USD) TL EXIT L+500 07/03/2024 SMG (USD) Bridge TL L+250 01/23/2025 |
Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Internet Brands Inc. (USD) TL2 L+750 08/16/2025 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 Hayward Ind Inc (USD) TLB L+350 08/04/2024 Beteiligungsgesellschaft Fuer Pensionsgelder (EUR) TLB E+350 06/14/2024 |
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 46 bp (basis points), as of 05/01/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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