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North American Bond Research – May 19, 2020

Posted on May 19, 2020

HIGH YIELD BOND RESEARCH

May 19, 2020

Bond Markets

MARKETS DROPPED PARING SOME OF MONDAY’S SURGE AFTER STAT NEWS PUBLISHED AN ARTICLE CITING EXPERTS WHO SUGGESTED “WE OUGHT TO TAKE THE EARLY READOUT” FROM THE COMPANY’S VACCINE PHASE 1 TRIAL “WITH A BIG GRAIN OF SALT.” 10 Year Treasury notes were down 3.3 basis points. S&P -1.05%, Dow -1.59%, NASDAQ -0.54%.

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 5 MILLION+ CASES AND 324000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.6 MILLION+ CASES AND 94000+ 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

+	Ford Motor Co. 9% 4/22/2025	+0.4%
	General Motors Co. 6.25% 10/2/2043	+4.2%
	Expedia Inc. 5% 2/15/2026	+0.9%
	Ford Motor Co. 9.625% 4/22/2030	+0.0%
	Briggs & Stratton Corp. 6.875% 12/15/2020	+0.0%
–	Ford Motor Co. 8.5% 4/21/2023	-0.5%
	Occidental Petroleum Corp. 2.9% 8/15/2024	-0.7%
	Occidental Petroleum Corp. 2.7% 8/15/2022	-0.3%
	Occidental Petroleum Corp. 3.5% 8/15/2029	-1.0%
	Macy’s Retail Hldg Inc. 2.875% 2/15/2023	-4.9%

Ford Motor Co.   9% 4/22/2025
General Motors Co.   6.25% 10/2/2043
Expedia Inc.   5% 2/15/2026
Ford Motor Co.   8.5% 4/21/2023
Ford Motor Co.   9.625% 4/22/2030
Occidental Petroleum Corp.   2.9% 8/15/2024
Briggs & Stratton Corp.   6.875% 12/15/2020
Occidental Petroleum Corp.   2.7% 8/15/2022
Intelsat Jackson Hldg SA   5.5% 8/1/2023 (1)
Occidental Petroleum Corp.   3.5% 8/15/2029

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.11%	-0.08%	1.45%	-6.20%	-4.40%	6.47%
Mining	1.35%	0.36%	6.47%	-25.06%	-25.39%	-17.18%
Construction	0.27%	0.17%	1.08%	-7.76%	-5.39%	3.70%
Manufacturing	0.32%	-0.08%	-1.14%	-8.22%	-6.43%	1.65%
Transportion, Communication, Electric/Gas	0.40%	0.27%	0.77%	-4.60%	-2.47%	5.22%
Wholesale	0.42%	0.36%	3.72%	-8.75%	-7.30%	-0.85%
Retail	0.58%	-0.71%	-1.84%	-11.78%	-10.29%	-2.10%
Finance, Insurance, Real-Estate	0.29%	-0.27%	-0.79%	-9.39%	-7.83%	-0.17%
Services	0.43%	-0.00%	-1.11%	-8.00%	-6.59%	2.11%
Public Administration	0.02%	-0.31%	3.65%	-8.34%	-5.60%	2.22%
Energy	1.44%	0.92%	8.69%	-22.13%	-22.38%	-15.74%

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

New Issues	Forward Calendar
1. Diamondback Energy Inc. (USD) 4.75% 5/31/2025 (05/18/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%. 2. LCPR Senior Secured Financing Designated Activity Company (USD) 6.75% 10/15/2027 144A (05/18/2020): 1215MM First Lien Notes, Price at Issuance 100, Yielding 6.75%. 3. LCPR Senior Secured Financing Designated Activity Company (USD) 6.75% 10/15/2027 (05/18/2020): 70MM First Lien Notes, Price at Issuance 100, Yielding 6.75%. 4. IRB Holding Corp (USD) 7% 6/15/2025 144A (05/18/2020): 750MM First Lien Notes, Price at Issuance 100, Yielding 7%. 5. MSCI Inc. (USD) 3.875% 2/15/2031 144A (05/18/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 6. IRB Holding Corp (USD) 7% 6/15/2025 Reg S (05/18/2020): 750MM First Lien Notes, Price at Issuance 100, Yielding 7%. 7. MSCI Inc. (USD) 3.875% 2/15/2031 Reg S (05/18/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 8. Standard Industries Inc. (USD) 5% 2/15/2027 (05/18/2020): 350MM Senior Unsecured Notes, Price at Issuance 99.5, Yielding 5.09%. 9. Clearway Energy Operating (USD) 4.75% 3/15/2028 Reg S (05/19/2020): 250MM Senior Unsecured Notes, Price at Issuance 102, Yielding 4.44%. 10. Cushman & Wakefield Inc. (USD) 6.75% 5/15/2028 144A (05/19/2020): 650MM Secured Notes, Price at Issuance 100, Yielding 6.75%.	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. Diamondback Energy Inc. (USD) 4.75% 5/31/2025 (05/18/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%.

2. LCPR Senior Secured Financing Designated Activity Company (USD) 6.75% 10/15/2027 144A (05/18/2020): 1215MM First Lien Notes, Price at Issuance 100, Yielding 6.75%.

3. LCPR Senior Secured Financing Designated Activity Company (USD) 6.75% 10/15/2027 (05/18/2020): 70MM First Lien Notes, Price at Issuance 100, Yielding 6.75%.

4. IRB Holding Corp (USD) 7% 6/15/2025 144A (05/18/2020): 750MM First Lien Notes, Price at Issuance 100, Yielding 7%.

5. MSCI Inc. (USD) 3.875% 2/15/2031 144A (05/18/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%.

6. IRB Holding Corp (USD) 7% 6/15/2025 Reg S (05/18/2020): 750MM First Lien Notes, Price at Issuance 100, Yielding 7%.

7. MSCI Inc. (USD) 3.875% 2/15/2031 Reg S (05/18/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%.

8. Standard Industries Inc. (USD) 5% 2/15/2027 (05/18/2020): 350MM Senior Unsecured Notes, Price at Issuance 99.5, Yielding 5.09%.

9. Clearway Energy Operating (USD) 4.75% 3/15/2028 Reg S (05/19/2020): 250MM Senior Unsecured Notes, Price at Issuance 102, Yielding 4.44%.

10. Cushman & Wakefield Inc. (USD) 6.75% 5/15/2028 144A (05/19/2020): 650MM Secured Notes, Price at Issuance 100, Yielding 6.75%.

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: MSCI Inc issued 1000MM in notes.

Top Widening Loans	Top Narrowing Loans
GGP Inc. (USD) TLA2 L+250 08/24/2023 Unit4 NV (EUR) TL E+450 09/26/2023 THOM Europe SAS (EUR) TLB E+450 08/03/2024 Convergint Technologies LLC (USD) TL L+300 02/01/2025 Filtration Group Inc. (EUR) TLB E+350 03/29/2025	Wall Street Systems (USD) TL L+300 11/17/2024 Archroma Global Services (EUR) TLB1 E+400 07/11/2024 Perstorp Hldg AB (EUR) TLB E+475 04/05/2026 DELTA-CAIW (EUR) TLB E+350 02/28/2025 Ball Corp. (USD) TLA L+150 03/21/2024

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 27 bp (basis points), as of 05/18/2020
Net negative capital flows into high-yield ETFs & mutual funds

INVESTMENT GRADE BOND RESEARCH

May 19, 2020

Bond Markets

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 5 MILLION+ CASES AND 324000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.6 MILLION+ CASES AND 94000+ 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

+	CVS Health Corp. 5.05% 3/25/2048	+1.1%
	Southwest Airlines Co. 1.25% 5/1/2025	+3.0%
	GE Capital Intl. Funding Co. 4.418% 11/15/2035	+2.0%
	Boeing Co. 5.15% 5/1/2030	+0.3%
	AT&T Inc. 4.5% 3/9/2048	+1.6%
–	Coca-Cola Co. 1.65% 6/1/2030	-0.5%
	Anheuser-Busch Inbev Worldwide Inc. 4.5% 6/1/2050	-0.1%
	Unilever Cap Corp. 3.25% 3/7/2024	-0.2%
	CVS Health Corp. 3.75% 4/1/2030	-0.4%
	Raytheon Co. 2.5% 12/15/2022	-0.2%
	PepsiCo. Inc. 2.75% 3/19/2030	-0.0%
	Southwest Airlines Co. 5.25% 5/4/2025	-0.4%
	Wells Fargo & Co. 5.013% 4/4/2051	-0.3%
	General Motors Co. 5.4% 10/2/2023	-0.3%
	FedEx Corp. 5.25% 5/15/2050	-0.3%

CVS Health Corp.   5.05% 3/25/2048
Southwest Airlines Co.   1.25% 5/1/2025
GE Capital Intl. Funding Co.   4.418% 11/15/2035
Boeing Co.   5.15% 5/1/2030
AT&T Inc.   4.5% 3/9/2048
Oracle Corp.   3.6% 4/1/2050
Walt Disney Co.   3.8% 5/13/2060
Boeing Co.   5.805% 5/1/2050
MetLife Inc.   4.55% 3/23/2030
Walt Disney Co.   3.8% 3/22/2030

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.23%	-0.42%	-0.24%	-3.29%	-0.34%	4.75%
Mining	0.13%	0.84%	1.88%	-5.98%	-3.91%	3.78%
Construction	-0.15%	0.09%	0.23%	-5.41%	-2.58%	3.89%
Manufacturing	0.03%	0.74%	-0.38%	-0.44%	1.92%	9.61%
Transportion, Communication, Electric/Gas	-0.15%	0.45%	-0.74%	-1.18%	1.84%	10.66%
Wholesale	0.07%	0.42%	0.06%	-1.93%	-0.00%	7.61%
Retail	-0.01%	0.52%	-0.77%	-0.56%	1.75%	10.24%
Finance, Insurance, Real-Estate	0.01%	0.36%	0.06%	-0.91%	1.05%	7.27%
Services	0.04%	0.42%	-0.90%	-1.39%	1.06%	8.94%
Public Administration	-0.08%	0.05%	0.39%	3.14%	4.18%	6.26%
Energy	0.11%	0.91%	1.59%	-6.13%	-4.15%	3.50%

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

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%. 2. Northern States Power Co. of Wisconsin (USD) 3.05% 5/1/2051 (05/18/2020): 100MM Secured Notes, Price at Issuance 98.834, Yielding 3.11%. 3. Evergy MO West Inc. (USD) 2.25% 6/1/2030 (05/18/2020): 400MM Secured Notes, Price at Issuance 99.884, Yielding 2.26%. 4. Intercontinental Exchange Inc. (USD) 2.1% 6/15/2030 (05/18/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.29, Yielding 2.18%. 5. Intercontinental Exchange Inc. (USD) 3% 6/15/2050 (05/18/2020): 1250MM Senior Unsecured Notes, Price at Issuance 98.496, Yielding 3.08%. 6. Piedmont Natural Gas Co. Inc (USD) 3.35% 6/1/2050 (05/18/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.287, Yielding 3.39%. 7. Alcon Finance Corp. (USD) 2.6% 5/27/2030 (05/18/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.843, Yielding 2.62%. 8. Alcon Finance Corp. (USD) 2.6% 5/27/2030 Reg S (05/18/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.843, Yielding 2.62%. 9. Relx Capital Inc. (USD) 3% 5/22/2030 (05/18/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.342, Yielding 3.08%. 10. Diamondback Energy Inc. (USD) 4.75% 5/31/2025 (05/18/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%. (None Current 05/19/2020)

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%.

2. Northern States Power Co. of Wisconsin (USD) 3.05% 5/1/2051 (05/18/2020): 100MM Secured Notes, Price at Issuance 98.834, Yielding 3.11%.

3. Evergy MO West Inc. (USD) 2.25% 6/1/2030 (05/18/2020): 400MM Secured Notes, Price at Issuance 99.884, Yielding 2.26%.

4. Intercontinental Exchange Inc. (USD) 2.1% 6/15/2030 (05/18/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.29, Yielding 2.18%.

5. Intercontinental Exchange Inc. (USD) 3% 6/15/2050 (05/18/2020): 1250MM Senior Unsecured Notes, Price at Issuance 98.496, Yielding 3.08%.

6. Piedmont Natural Gas Co. Inc (USD) 3.35% 6/1/2050 (05/18/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.287, Yielding 3.39%.

7. Alcon Finance Corp. (USD) 2.6% 5/27/2030 (05/18/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.843, Yielding 2.62%.

8. Alcon Finance Corp. (USD) 2.6% 5/27/2030 Reg S (05/18/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.843, Yielding 2.62%.

9. Relx Capital Inc. (USD) 3% 5/22/2030 (05/18/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.342, Yielding 3.08%.

10. Diamondback Energy Inc. (USD) 4.75% 5/31/2025 (05/18/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%.

(None Current 05/19/2020)

Additional Commentary

NEW ISSUANCE WATCH: on 05/19/2020 participants welcome a $750MM new corporate-bond offering by Relx Capital Inc.

Top Widening Loans	Top Narrowing Loans
GGP Inc. (USD) TLA2 L+250 08/24/2023 Unit4 NV (EUR) TL E+450 09/26/2023 THOM Europe SAS (EUR) TLB E+450 08/03/2024 Convergint Technologies LLC (USD) TL L+300 02/01/2025 Filtration Group Inc. (EUR) TLB E+350 03/29/2025	Wall Street Systems (USD) TL L+300 11/17/2024 Archroma Global Services (EUR) TLB1 E+400 07/11/2024 Perstorp Hldg AB (EUR) TLB E+475 04/05/2026 DELTA-CAIW (EUR) TLB E+350 02/28/2025 Ball Corp. (USD) TLA L+150 03/21/2024

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:

TED spread held below 27 bp (basis points), as of 05/19/2020
Net positive capital flows into high-yield ETFs & mutual funds

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.

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