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North American Bond Research – May 20, 2020

Posted on May 20, 2020

HIGH YIELD BOND RESEARCH

May 20, 2020

Bond Markets

THE MARKETS ARE ONCE AGAIN LOOKING FOR ANY SIGN THAT A RECOVERY IS STARTING TO HAPPEN AS COUNTRIES AND STATES REOPEN. MARKETS ARE ONCE AGAIN UP WITH THE HOPE THAT A “V” SHAPE RECOVERY IS HAPPENING. 10 Year Treasury notes were down 3.3 basis points. S&P +1.67%, Dow +1.52%, NASDAQ +2.08%.

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 5 MILLION+ CASES AND 330000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.6 MILLION+ CASES AND 95000+ 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	+0.7%
	Ford Motor Co. 8.5% 4/21/2023	+0.8%
	Petrobras Global Finance BV 7.375% 1/17/2027	+1.2%
	Goodyear Tire & Rubber Co. 9.5% 5/31/2025	+3.5%
	DCP Midstream Operating LP 7.375% PERP	+4.6%
–	General Motors Co. 5.2% 4/1/2045	-5.0%
	Teva Pharmaceutical Industries LTD 3.15% 10/1/2026	-0.1%
	Vereit Operating Partnership 4.875% 6/1/2026	-0.6%
	Teva Pharmaceutical Industries LTD 2.8% 7/21/2023	-0.2%
	EQT Corp. 6.125% 2/1/2025	-1.1%

Ford Motor Co.   9% 4/22/2025
Ford Motor Co.   8.5% 4/21/2023
Petrobras Global Finance BV   7.375% 1/17/2027
General Motors Co.   5.2% 4/1/2045
Goodyear Tire & Rubber Co.   9.5% 5/31/2025
DCP Midstream Operating LP   7.375% PERP
Petrobras Global Finance BV   6.85% 6/5/2115
Radian Group Inc.   6.625% 3/15/2025
EQT Midstream Partners LP   4.75% 7/15/2023
Teva Pharmaceutical Industries LTD   3.15% 10/1/2026

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.41%	0.37%	2.09%	-5.64%	-3.78%	7.14%
Mining	0.85%	0.67%	6.88%	-25.80%	-26.36%	-17.59%
Construction	0.26%	0.17%	1.10%	-7.50%	-5.05%	3.85%
Manufacturing	0.23%	-0.08%	-0.80%	-8.02%	-6.16%	1.50%
Transportion, Communication, Electric/Gas	0.27%	0.46%	1.20%	-4.20%	-1.99%	5.62%
Wholesale	0.18%	0.54%	4.07%	-8.39%	-7.00%	-0.68%
Retail	0.29%	-0.36%	-0.92%	-9.99%	-8.40%	-0.08%
Finance, Insurance, Real-Estate	0.16%	-0.01%	-0.60%	-9.72%	-8.03%	-0.02%
Services	0.20%	0.21%	-0.65%	-7.67%	-6.24%	2.19%
Public Administration	0.45%	0.45%	4.42%	-7.66%	-4.88%	2.98%
Energy	0.91%	1.18%	8.89%	-23.44%	-23.66%	-16.16%

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

New Issues	Forward Calendar
1. 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%. 2. Cushman & Wakefield Inc. (USD) 6.75% 5/15/2028 144A (05/19/2020): 650MM Secured Notes, Price at Issuance 100, Yielding 6.75%. 3. Cushman & Wakefield Inc. (USD) 6.75% 5/15/2028 Reg S (05/19/2020): 650MM Secured Notes, Price at Issuance 100, Yielding 6.75%. 4. Talen Energy Supply LLC (USD) 7.625% 6/1/2028 144A (05/19/2020): 400MM Secured Notes, Price at Issuance 100, Yielding 7.63%. 5. Talen Energy Supply LLC (USD) 7.625% 6/1/2028 Reg S (05/19/2020): 400MM Secured Notes, Price at Issuance 100, Yielding 7.63%. 6. Park Intermediate Hldg LLC (USD) 7.5% 6/1/2025 Reg S (05/19/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 7.5%. 7. Sanders RE II LTD (USD) FLT% 6/7/2026 (05/20/2020): 200MM Unsecured Notes, Price at Issuance 100. 8. Park Intermediate Hldg LLC (USD) 7.5% 6/1/2025 144A (05/20/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 7.5%.	1. Xperi Corp. : $1.1B seven-year secured covenant lite TLB 2. 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 3. Sedgwick Claimes Management Services Inc.: $300MM TL (B2/B) 4. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 5. Radio Systems Corp.: $725MM Loans: $100M ABL Facility; $625MM Senior secured bridge loan 6. Mohegan Tribal Gaming Authority: $100MM first lein TL (Caa1) 7. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL 8. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 9. Championx: $537MM TL 10. Ziply Fiber: $790.5MM TLB

New Issues

Forward Calendar

1. 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%.

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

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

4. Talen Energy Supply LLC (USD) 7.625% 6/1/2028 144A (05/19/2020): 400MM Secured Notes, Price at Issuance 100, Yielding 7.63%.

5. Talen Energy Supply LLC (USD) 7.625% 6/1/2028 Reg S (05/19/2020): 400MM Secured Notes, Price at Issuance 100, Yielding 7.63%.

6. Park Intermediate Hldg LLC (USD) 7.5% 6/1/2025 Reg S (05/19/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 7.5%.

7. Sanders RE II LTD (USD) FLT% 6/7/2026 (05/20/2020): 200MM Unsecured Notes, Price at Issuance 100.

8. Park Intermediate Hldg LLC (USD) 7.5% 6/1/2025 144A (05/20/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 7.5%.

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

2. 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

3. Sedgwick Claimes Management Services Inc.: $300MM TL (B2/B)

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

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

6. Mohegan Tribal Gaming Authority: $100MM first lein TL (Caa1)

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

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

9. Championx: $537MM TL

10. Ziply Fiber: $790.5MM TLB

Additional Commentary

NEW ISSUANCE WATCH: Talen Energy Supply Inc issued 400MM in notes.

Top Widening Loans	Top Narrowing Loans
American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023 LGC LTD (EUR) TLB4 E+325 03/08/2023 Rubix Group (EUR) TL E+800 09/08/2025 WIRB-Copernicus Group Inc (USD) TLB L+400 01/08/2027 Distributed Power Inc. (USD) TLB L+325 11/02/2025	Digital Realty Trust LP (USD) DD L+100 01/15/2023 Visteon Corp. (USD) TLB L+175 03/24/2024 Eaglepicher Inc. (USD) TL L+725 03/09/2026 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 Metro-Goldwyn-Mayer Inc. (USD) TL2 L+450 06/29/2026

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 26 bp (basis points), as of 05/20/2020
Net negative capital flows into high-yield ETFs & mutual funds

INVESTMENT GRADE BOND RESEARCH

May 20, 2020

Bond Markets

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 5 MILLION+ CASES AND 330000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.6 MILLION+ CASES AND 95000+ 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

+	Boeing Co. 4.875% 5/1/2025	+0.7%
	Boeing Co. 5.805% 5/1/2050	+2.6%
	General Motors Co. 6.8% 10/1/2027	+2.6%
	Walt Disney Co. 3.6% 1/13/2051	+1.8%
	Boeing Co. 5.15% 5/1/2030	+1.7%
–	Boeing Co. 5.04% 5/1/2027	-0.3%
	Dupont de Nemours Inc. 2.169% 5/1/2023	-0.4%
	Marriott Intl Inc. 5.75% 5/1/2025	-0.1%
	Nvidia Corp. 2.85% 4/1/2030	-0.0%
	Procter & Gamble Co. 3% 3/25/2030	-0.3%

Boeing Co.   4.875% 5/1/2025
Boeing Co.   5.805% 5/1/2050
General Motors Co.   6.8% 10/1/2027
Walt Disney Co.   3.6% 1/13/2051
Boeing Co.   5.15% 5/1/2030
Boeing Co.   5.93% 5/1/2060
Comcast Corp.   3.75% 4/1/2040
Walt Disney Co.   2.65% 1/13/2031
General Electric Co.   FLT% PERP (1)
Pfizer Inc.   2.7% 5/28/2050

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.52%	-0.09%	0.27%	-2.81%	0.18%	4.81%
Mining	0.57%	1.32%	2.45%	-5.83%	-3.64%	3.99%
Construction	0.11%	0.19%	-0.23%	-4.77%	-2.07%	4.33%
Manufacturing	0.21%	0.92%	-0.20%	-0.32%	2.14%	9.87%
Transportion, Communication, Electric/Gas	0.25%	0.71%	-0.40%	-1.01%	2.15%	10.91%
Wholesale	0.17%	0.65%	0.13%	-2.22%	-0.15%	7.81%
Retail	0.37%	0.98%	-0.37%	-0.01%	2.46%	10.99%
Finance, Insurance, Real-Estate	0.15%	0.49%	0.23%	-0.79%	1.22%	7.40%
Services	0.25%	0.64%	-0.55%	-1.23%	1.23%	8.81%
Public Administration	0.00%	0.02%	0.39%	3.12%	4.18%	6.24%
Energy	0.52%	1.31%	2.22%	-5.74%	-3.61%	3.91%

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

New Issues	New Issues [Continued]
1. AT&T Inc. (EUR) 1.6% 5/19/2028 (05/19/2020): 1750MM Senior Unsecured Notes, Price at Issuance 99.926, Yielding 1.61%. 2. Kentucky Utilities Co. (USD) 3.3% 6/1/2050 (05/19/2020): 500MM Secured Notes, Price at Issuance 99.509, Yielding 3.33%. 3. National Fuel Gas Co. (USD) 5.5% 1/15/2026 (05/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.518, Yielding 5.6%. 4. AutoNation Inc. (USD) 4.75% 6/1/2030 (05/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.479, Yielding 4.82%. 5. Arizona Public Service (USD) 3.35% 5/15/2050 (05/19/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.531, Yielding 3.37%. 6. AT&T Inc. (EUR) 2.05% 5/19/2032 (05/19/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.801, Yielding 2.069%. 7. AT&T Inc. (EUR) 2.6% 5/19/2038 (05/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.944, Yielding 2.604%. 8. Cogent Communications Group Inc. (EUR) 4.375% 6/30/2024 (05/19/2020): 215MM Senior Unsecured Notes, Price at Issuance 99.5, Yielding 4.51%. 9. Kentucky Utilities Co. (USD) 3.3% 6/1/2050 (05/19/2020): 500MM Secured Notes, Price at Issuance 99.509, Yielding 3.33%. 10. JPMorgan Chase & Co. (USD) VAR% 6/1/2024 (05/19/2020): 2000MM Senior Unsecured Notes, Price at Issuance 100.

New Issues

New Issues [Continued]

1. AT&T Inc. (EUR) 1.6% 5/19/2028 (05/19/2020): 1750MM Senior Unsecured Notes, Price at Issuance 99.926, Yielding 1.61%.

2. Kentucky Utilities Co. (USD) 3.3% 6/1/2050 (05/19/2020): 500MM Secured Notes, Price at Issuance 99.509, Yielding 3.33%.

3. National Fuel Gas Co. (USD) 5.5% 1/15/2026 (05/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.518, Yielding 5.6%.

4. AutoNation Inc. (USD) 4.75% 6/1/2030 (05/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.479, Yielding 4.82%.

5. Arizona Public Service (USD) 3.35% 5/15/2050 (05/19/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.531, Yielding 3.37%.

6. AT&T Inc. (EUR) 2.05% 5/19/2032 (05/19/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.801, Yielding 2.069%.

7. AT&T Inc. (EUR) 2.6% 5/19/2038 (05/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.944, Yielding 2.604%.

8. Cogent Communications Group Inc. (EUR) 4.375% 6/30/2024 (05/19/2020): 215MM Senior Unsecured Notes, Price at Issuance 99.5, Yielding 4.51%.

9. Kentucky Utilities Co. (USD) 3.3% 6/1/2050 (05/19/2020): 500MM Secured Notes, Price at Issuance 99.509, Yielding 3.33%.

10. JPMorgan Chase & Co. (USD) VAR% 6/1/2024 (05/19/2020): 2000MM Senior Unsecured Notes, Price at Issuance 100.

Additional Commentary

NEW ISSUANCE WATCH: on 05/20/2020 participants welcome a $1250MM new corporate-bond offering by AT&T Inc.

Top Widening Loans	Top Narrowing Loans
American Tire Distributors Inc. (USD) TL DIP PIK L+600 09/01/2023 LGC LTD (EUR) TLB4 E+325 03/08/2023 Rubix Group (EUR) TL E+800 09/08/2025 WIRB-Copernicus Group Inc (USD) TLB L+400 01/08/2027 Distributed Power Inc. (USD) TLB L+325 11/02/2025	Digital Realty Trust LP (USD) DD L+100 01/15/2023 Visteon Corp. (USD) TLB L+175 03/24/2024 Eaglepicher Inc. (USD) TL L+725 03/09/2026 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 Metro-Goldwyn-Mayer Inc. (USD) TL2 L+450 06/29/2026

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 26 bp (basis points), as of 05/20/2020
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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