MARKETS TOOK OFF AS POWELL GAVE BROAD ASSURANCES THAT THE FED WILL DO ANYTHING TO SUPPORT THE ECONOMY. HE STATED THAT IF THE CORONAVIRUS DOES NOT HAVE A SECOND WAVE THAT THE ECONOMY WOULD MOST LIKELY START RECOVERING IN THE SECOND HALF OF 2020. 10 Year Treasury notes were up 10.41 basis points. S&P +3.16%, Dow +3.83%, NASDAQ +2.41%.
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Market Summaries
North American Bond Research – May 18, 2020
Posted on May 18, 2020|
HIGH YIELD BOND RESEARCH
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May 18, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 4.9 MILLION+ CASES AND 320000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.6 MILLION+ CASES AND 92000+ 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 Ford Motor Co. 9% 4/22/2025 Intl Lease Finance Corp. 4.625% 4/15/2021 Occidental Petroleum Corp. 2.7% 8/15/2022 General Motors Co. 6.25% 10/2/2043 AerCap Ireland Capital LTD 4.625% 7/1/2022 Barclays Bank PLC 5.14% 10/14/2020 Ford Motor Co. 9.625% 4/22/2030 Gap Inc. 5.95% 4/12/2021 Occidental Petroleum Corp. 3.5% 8/15/2029 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
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(None Current 05/18/2020)
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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: No New Issues
| Top Widening Loans | Top Narrowing Loans |
| Netsmart Technologies Inc. (USD) TL L+750 10/19/2023 Fujairah Asia Power (AED) TL L+50 07/28/2030 Logoplaste (EUR) TLB E+400 10/31/2023 Tacala LLC (USD) TLB L+775 02/01/2026 Entertainment Properties Trust (USD) TL L+110 02/27/2023 |
Allsup’s (USD) TLB L+625 11/18/2024 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Albea Beauty Holdings SA (USD) TLB L+300 04/12/2024 Salient CRGT Inc. (USD) TL L+575 02/24/2022 Imperva Inc. (USD) TL2 L+775 01/10/2027 |
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 27 bp (basis points), as of 05/18/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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May 18, 2020
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Bond Markets
MARKETS TOOK OFF AS POWELL GAVE BROAD ASSURANCES THAT THE FED WILL DO ANYTHING TO SUPPORT THE ECONOMY. HE STATED THAT IF THE CORONAVIRUS DOES NOT HAVE A SECOND WAVE THAT THE ECONOMY WOULD MOST LIKELY START RECOVERING IN THE SECOND HALF OF 2020. 10 Year Treasury notes were up 10.41 basis points. S&P +3.16%, Dow +3.83%, NASDAQ +2.41%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 4.9 MILLION+ CASES AND 320000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.6 MILLION+ CASES AND 92000+ 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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Coca-Cola Co. 2.6% 6/1/2050 Lowe’s Companies Inc. 5% 4/15/2040 Walt Disney Co. 3.6% 1/13/2051 Viacom Inc. 4.95% 5/19/2050 Viacom Inc. 4.2% 5/19/2032 Boeing Co. 5.93% 5/1/2060 Walt Disney Co. 2.65% 1/13/2031 Southwest Airlines Co. 1.25% 5/1/2025 Intl Business Machines Corp. 1.95% 5/15/2030 UnitedHealth Group Inc. 2.9% 5/15/2050 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Royal Bank of Canada (CAD) 2.7% 5/22/2035 (05/18/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.7%. |
Additional Commentary
NEW ISSUANCE WATCH: on 05/18/2020 participants welcome a $50MM new corporate-bond offering by Royal Bank of Canada.
| Top Widening Loans | Top Narrowing Loans |
| Netsmart Technologies Inc. (USD) TL L+750 10/19/2023 Fujairah Asia Power (AED) TL L+50 07/28/2030 Logoplaste (EUR) TLB E+400 10/31/2023 Tacala LLC (USD) TLB L+775 02/01/2026 Entertainment Properties Trust (USD) TL L+110 02/27/2023 |
Allsup’s (USD) TLB L+625 11/18/2024 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Albea Beauty Holdings SA (USD) TLB L+300 04/12/2024 Salient CRGT Inc. (USD) TL L+575 02/24/2022 Imperva Inc. (USD) TL2 L+775 01/10/2027 |
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 27 bp (basis points), as of 05/18/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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