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North American Bond Research – May 13, 2020

Posted on May 13, 2020

HIGH YIELD BOND RESEARCH

May 13, 2020

Bond Markets

MARKETS WAY DOWN AS FED CHIEF STATES FUTURE “HIGHLY UNCERTAIN” AND THAT THERE COULD BE “LASTING DAMAGE”. 10 Year Treasury notes were down 4.8 basis points. S&P -2.05%, Dow -1.89%, NASDAQ -2.06%.

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 4.4 MILLION+ CASES AND 300000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.4 MILLION+ CASES AND 85000+ 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

+	Ford Motor Co. 9.625% 4/22/2030	+0.2%
	Teva Pharmaceuticals Fin BV 6% 4/15/2024	+0.0%
	Societe Generale VAR% PERP Reg S (3)	+2.8%
	Occidental Petroleum Corp. 5.55% 3/15/2026	+0.5%
	Sally Hldg LLC 5.625% 12/1/2025	+1.9%
–	Ford Motor Co. 9% 4/22/2025	-3.8%
	General Motors Co. 6.25% 10/2/2043	-2.2%
	Petrobras Global Finance BV 8.75% 5/23/2026	-0.7%
	Encompass Health Corp. 4.75% 2/1/2030	-0.3%
	Ally Financial Inc. 4.125% 2/13/2022	-0.1%

Ford Motor Co.   9% 4/22/2025
General Motors Co.   6.25% 10/2/2043
Petrobras Global Finance BV   8.75% 5/23/2026
Encompass Health Corp.   4.75% 2/1/2030
Ford Motor Co.   9.625% 4/22/2030
Ally Financial Inc.   4.125% 2/13/2022
Ford Motor Co.   8.5% 4/21/2023
Continental Res Inc.   4.5% 4/15/2023
T-Mobile USA Inc.   6.5% 1/15/2026
Petrobras Global Finance BV   6.85% 6/5/2115

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.20%	1.14%	5.50%	-5.62%	-4.13%	6.41%
Mining	0.37%	0.87%	6.97%	-27.13%	-27.55%	-18.75%
Construction	0.29%	1.29%	4.09%	-7.40%	-5.22%	3.81%
Manufacturing	0.17%	1.12%	2.33%	-7.39%	-5.76%	1.96%
Transportion, Communication, Electric/Gas	0.14%	0.86%	3.51%	-4.64%	-2.73%	4.86%
Wholesale	0.14%	1.14%	8.72%	-9.08%	-7.81%	-1.49%
Retail	0.09%	-0.03%	1.47%	-11.43%	-10.10%	-2.25%
Finance, Insurance, Real-Estate	0.02%	0.33%	2.43%	-9.30%	-7.84%	-0.07%
Services	0.16%	1.00%	2.64%	-8.10%	-6.88%	2.00%
Public Administration	0.02%	0.23%	7.97%	-6.89%	-5.29%	2.87%
Energy	0.46%	2.11%	11.22%	-23.73%	-24.07%	-16.54%

Total returns (non-annualized) by rating, market weighted.

New Issues	Forward Calendar
1. Match Group Inc. (USD) 4.625% 6/1/2028 144A (05/12/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%. 2. SpringLeaf Finance Corp. (USD) 8.875% 6/1/2025 (05/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8.88%. 3. Match Group Inc. (USD) 4.625% 6/1/2028 Reg S (05/12/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%. 4. Viking Cruises LTD (USD) 13% 5/15/2025 Reg S (05/12/2020): 675MM First Lien Notes, Price at Issuance 97, Yielding 13.85%. 5. Viking Cruises LTD (USD) 13% 5/15/2025 144A (05/12/2020): 675MM First Lien Notes, Price at Issuance 97, Yielding 13.85%. 6. Goodyear Tire & Rubber Co. (USD) 9.5% 5/31/2025 (05/13/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 9.5%. 7. Boyd Gaming Corp. (USD) 8.625% 6/1/2025 144A (05/13/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8.63%. 8. Boyd Gaming Corp. (USD) 8.625% 6/1/2025 Reg S (05/13/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8.63%. 9. Outfront Media Capital LLC (USD) 6.25% 6/15/2025 144A (05/13/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.25%. 10. Outfront Media Capital LLC (USD) 6.25% 6/15/2025 Reg S (05/13/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.25%.	1. Xperi Corp. : $1.1B seven-year secured covenant lite TLB 2. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 3. Ziply Fiber: $790.5MM TLB 4. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 5. Radio Systems Corp.: $725MM Loans: $100M ABL Facility; $625MM Senior secured bridge loan 6. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL 7. 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 8. Championx: $537MM TL 9. Alterra Mountain Co. : $400MM incremental TL (B1/B) 10. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A

New Issues

Forward Calendar

1. Match Group Inc. (USD) 4.625% 6/1/2028 144A (05/12/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%.

2. SpringLeaf Finance Corp. (USD) 8.875% 6/1/2025 (05/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8.88%.

3. Match Group Inc. (USD) 4.625% 6/1/2028 Reg S (05/12/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%.

4. Viking Cruises LTD (USD) 13% 5/15/2025 Reg S (05/12/2020): 675MM First Lien Notes, Price at Issuance 97, Yielding 13.85%.

5. Viking Cruises LTD (USD) 13% 5/15/2025 144A (05/12/2020): 675MM First Lien Notes, Price at Issuance 97, Yielding 13.85%.

6. Goodyear Tire & Rubber Co. (USD) 9.5% 5/31/2025 (05/13/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 9.5%.

7. Boyd Gaming Corp. (USD) 8.625% 6/1/2025 144A (05/13/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8.63%.

8. Boyd Gaming Corp. (USD) 8.625% 6/1/2025 Reg S (05/13/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8.63%.

9. Outfront Media Capital LLC (USD) 6.25% 6/15/2025 144A (05/13/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.25%.

10. Outfront Media Capital LLC (USD) 6.25% 6/15/2025 Reg S (05/13/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.25%.

1. Xperi Corp. : $1.1B seven-year secured covenant lite TLB

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

3. Ziply Fiber: $790.5MM TLB

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

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

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

7. 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

8. Championx: $537MM TL

9. Alterra Mountain Co. : $400MM incremental TL (B1/B)

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

Additional Commentary

NEW ISSUANCE WATCH: Match Group Inc issued $500 in notes.

Top Widening Loans	Top Narrowing Loans
Globalfoundries Inc. (USD) TLB L+400 06/05/2026 Del Monte Foods Co. (USD) TL L+725 08/18/2021 SSH Group Hldg Inc. (USD) TL2 L+825 07/30/2026 Panera Bread Co. (USD) TLA L+200 06/13/2022 Wittur (EUR) TLB E+450 09/23/2026	Wesco Aircraft Hardware Corp. (USD) TLB L+250 02/28/2021 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 Grifols Worldwide Operations LTD (EUR) TLB E+225 11/15/2027 HSE24 Multichannel GmbH (EUR) TLB3 E+375 09/30/2021

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 30 bp (basis points), as of 05/13/2020
Net negative capital flows into high-yield ETFs & mutual funds

INVESTMENT GRADE BOND RESEARCH

May 13, 2020

Bond Markets

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Key Gainers and Losers

Volume Leaders

+	Walt Disney Co. 2.65% 1/13/2031	+0.1%
	Walt Disney Co. 3.6% 1/13/2051	+0.9%
	Boeing Co. 5.15% 5/1/2030	+0.1%
	Walt Disney Co. 3.5% 5/13/2040	+1.2%
	Charles Schwab Corp. 5.375% PERP	+1.0%
–	Walt Disney Co. 1.75% 1/13/2026	-0.2%
	Boeing Co. 5.805% 5/1/2050	-1.6%
	Boeing Co. 5.93% 5/1/2060	-1.1%
	Boeing Co. 5.705% 5/1/2040	-1.3%
	General Electric Co. 4.35% 5/1/2050	-1.7%

Walt Disney Co.   2.65% 1/13/2031
Walt Disney Co.   1.75% 1/13/2026
Boeing Co.   5.805% 5/1/2050
Boeing Co.   5.93% 5/1/2060
Walt Disney Co.   3.6% 1/13/2051
Boeing Co.   5.705% 5/1/2040
Boeing Co.   5.15% 5/1/2030
Walt Disney Co.   3.5% 5/13/2040
General Electric Co.   4.35% 5/1/2050
Southwest Airlines Co.   1.25% 5/1/2025

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.03%	-0.15%	1.53%	-1.25%	1.37%	4.82%
Mining	0.19%	0.23%	4.98%	-6.91%	-5.19%	2.97%
Construction	0.03%	-0.45%	3.43%	-4.11%	-1.48%	5.29%
Manufacturing	0.09%	-0.62%	1.13%	-0.84%	1.29%	9.31%
Transportion, Communication, Electric/Gas	0.01%	-1.06%	2.50%	-1.27%	1.35%	10.44%
Wholesale	0.02%	-0.20%	2.23%	-2.38%	-0.37%	7.36%
Retail	0.05%	-0.96%	0.98%	-0.55%	1.57%	10.76%
Finance, Insurance, Real-Estate	0.03%	-0.28%	1.63%	-0.90%	0.78%	7.09%
Services	0.05%	-0.83%	0.98%	-1.41%	0.71%	8.98%
Public Administration	0.05%	0.13%	0.64%	3.20%	4.19%	6.39%
Energy	0.17%	0.26%	5.48%	-6.72%	-5.11%	2.78%

Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. Appalachian Power Co. (USD) 3.7% 5/1/2050 (05/12/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.409, Yielding 3.73%. 2. Caterpillar Financial Services Corp. (USD) 1.45% 5/15/2025 (05/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.794, Yielding 1.49%. 3. Caterpillar Financial Services Corp. (USD) FLT% 5/13/2022 (05/12/2020): 300MM Senior Unsecured Notes, Price at Issuance 100. 4. Meglobal Canada Inc. (USD) 5.875% 5/18/2030 Reg S (05/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.88%. 5. Meglobal Canada Inc. (USD) 5.875% 5/18/2030 144A (05/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.88%. 6. Viacom Inc. (USD) 4.95% 5/19/2050 (05/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 94.987, Yielding 5.28%. 7. Meglobal Canada Inc. (USD) 5% 5/18/2025 144A (05/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%. 8. Aon Corp. (USD) 2.8% 5/15/2030 (05/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.965, Yielding 2.8%. 9. Williams Cos Inc. (USD) 3.5% 11/15/2030 (05/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.495, Yielding 3.56%.

New Issues

New Issues [Continued]

1. Appalachian Power Co. (USD) 3.7% 5/1/2050 (05/12/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.409, Yielding 3.73%.

2. Caterpillar Financial Services Corp. (USD) 1.45% 5/15/2025 (05/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.794, Yielding 1.49%.

3. Caterpillar Financial Services Corp. (USD) FLT% 5/13/2022 (05/12/2020): 300MM Senior Unsecured Notes, Price at Issuance 100.

4. Meglobal Canada Inc. (USD) 5.875% 5/18/2030 Reg S (05/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.88%.

5. Meglobal Canada Inc. (USD) 5.875% 5/18/2030 144A (05/12/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.88%.

6. Viacom Inc. (USD) 4.95% 5/19/2050 (05/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 94.987, Yielding 5.28%.

7. Meglobal Canada Inc. (USD) 5% 5/18/2025 144A (05/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%.

8. Aon Corp. (USD) 2.8% 5/15/2030 (05/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.965, Yielding 2.8%.

9. Williams Cos Inc. (USD) 3.5% 11/15/2030 (05/12/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.495, Yielding 3.56%.

Additional Commentary

NEW ISSUANCE WATCH: on 05/13/2020 participants welcome a $1000MM new corporate-bond offering by AON Corp.

Top Widening Loans	Top Narrowing Loans
Globalfoundries Inc. (USD) TLB L+400 06/05/2026 Del Monte Foods Co. (USD) TL L+725 08/18/2021 SSH Group Hldg Inc. (USD) TL2 L+825 07/30/2026 Panera Bread Co. (USD) TLA L+200 06/13/2022 Wittur (EUR) TLB E+450 09/23/2026	Wesco Aircraft Hardware Corp. (USD) TLB L+250 02/28/2021 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 Grifols Worldwide Operations LTD (EUR) TLB E+225 11/15/2027 HSE24 Multichannel GmbH (EUR) TLB3 E+375 09/30/2021

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:

TED spread held below 30 bp (basis points), as of 05/13/2020
Net positive capital flows into high-yield ETFs & mutual funds

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