STOCKS WERE HIGHER AS TECH AND ENERGY COMPANIES CLIMBED. OIL JUMPED TO 21.38. THE US IS SEEKING TO RAISE UP TO $3 TRILLION THIS QUARTER TO HELP BUSINESSES AND INDIVIDUALS DEAL WITH THE FINANCIAL FALLOUT SURROUNDING THE COVID-19 PANDEMIC. FTSE 100 -0.16%, 10 Year Treasury notes were up 2 basis points. S&P +0.42%, Dow +0.11%, NASDAQ +1.23%.
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Market Summaries
North American Bond Research – May 4, 20202
Posted on May 4, 2020|
HIGH YIELD BOND RESEARCH
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May 4, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.6 MILLION+ CASES AND 251000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.2 MILLION+ CASES AND 70000+ 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. 9.625% 4/22/2030 Ford Motor Co. 9% 4/22/2025 Petrobras Global Finance BV 6.85% 6/5/2115 Southwestern Energy Co. 4.95% 1/23/2025 Ford Motor Co. 8.5% 4/21/2023 Howmet Aerospace Inc. 6.875% 5/1/2025 Chesapeake Energy Corp. 11.5% 1/1/2025 Reg S Dynegy Inc. 5.875% 6/1/2023 (1) Western Digital Corp. 4.75% 2/15/2026 TransDigm Inc. 6.5% 7/15/2024 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
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(None Current 05/04/2020)
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1. BRP Inc.: $600MM TL B2 (B1)
2. Championx: $537MM TL 3. 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 4. Xperi Corp. : $1.1B seven-year secured covenant lite TLB 5. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 6. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 7. Logmein Inc.: $3.55B credit facilities: $250MM Revolver; $2.7B first lien TL; $600MM second-lien TL 8. Open Lending LLC: $225MM TLB 9. Xperi Corp. : $1.1B seven-year secured covenant lite TLB 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 |
| Aptean Inc. (USD) TL L+425 04/24/2026 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 Samsonite Intl. SA (USD) TLB L+175 04/19/2025 Panera Bread Co. (USD) TLA L+200 06/13/2022 Concordia International (USD) TL EXIT L+550 09/06/2024 |
Archroma Global Services (EUR) TLB1 E+400 07/11/2024 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Rocket Software (USD) TL L+425 11/28/2025 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 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 44 bp (basis points), as of 05/04/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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May 4, 2020
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Bond Markets
STOCKS WERE HIGHER AS TECH AND ENERGY COMPANIES CLIMBED. OIL JUMPED TO 21.38. THE US IS SEEKING TO RAISE UP TO $3 TRILLION THIS QUARTER TO HELP BUSINESSES AND INDIVIDUALS DEAL WITH THE FINANCIAL FALLOUT SURROUNDING THE COVID-19 PANDEMIC. FTSE 100 -0.16%, 10 Year Treasury notes were up 2 basis points. S&P +0.42%, Dow +0.11%, NASDAQ +1.23%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.6 MILLION+ CASES AND 251000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.2 MILLION+ CASES AND 70000+ 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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Boeing Co. 5.15% 5/1/2030 Boeing Co. 5.805% 5/1/2050 Boeing Co. 4.508% 5/1/2023 Boeing Co. 4.875% 5/1/2025 Boeing Co. 5.93% 5/1/2060 Boeing Co. 5.705% 5/1/2040 Boeing Co. 5.04% 5/1/2027 Southwest Airlines Co. 1.25% 5/1/2025 Oracle Corp. 2.95% 4/1/2030 AT&T Inc. 4.5% 3/9/2048 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. New York Life Insurance Co. (USD) 1.1% 5/5/2023 (05/04/2020): 650MM Secured Notes, Price at Issuance 99.979, Yielding 1.11%.
2. Teachers Insurance & Annuity Assoc. Of America (USD) 3.3% 5/15/2050 144A (05/04/2020): 1250MM Subordinated Notes, Price at Issuance 99.867, Yielding 3.31%. 3. Oneok Inc. (USD) 6.35% 1/15/2031 (05/04/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.667, Yielding 6.39%. 4. Oneok Inc. (USD) 7.15% 1/15/2051 (05/04/2020): 300MM Senior Unsecured Notes, Price at Issuance 99.632, Yielding 7.18%. 5. Oneok Inc. (USD) 5.85% 1/15/2026 (05/04/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.943, Yielding 5.86%. 6. Marsh & McLennan Cos Inc. (USD) 2.25% 11/15/2030 (05/04/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.146, Yielding 2.34%. 7. Starbucks Corp. (USD) 1.3% 5/7/2022 (05/04/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.933, Yielding 1.33%. 8. Starbucks Corp. (USD) 2.55% 11/15/2030 (05/04/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.725, Yielding 2.58%. 9. Starbucks Corp. (USD) 3.5% 11/15/2050 (05/04/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.33, Yielding 3.54%. 10. Altria Group Inc. (USD) 4.45% 5/6/2050 (05/04/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.198, Yielding 4.5%. |
Additional Commentary
NEW ISSUANCE WATCH: on 05/04/2020 participants welcome a $650MM new corporate-bond offering by New York Life Insurance Co.
| Top Widening Loans | Top Narrowing Loans |
| Aptean Inc. (USD) TL L+425 04/24/2026 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 Samsonite Intl. SA (USD) TLB L+175 04/19/2025 Panera Bread Co. (USD) TLA L+200 06/13/2022 Concordia International (USD) TL EXIT L+550 09/06/2024 |
Archroma Global Services (EUR) TLB1 E+400 07/11/2024 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Rocket Software (USD) TL L+425 11/28/2025 Orion EngineeRed Carbons Hldgs GmbH (USD) TLB L+200 07/25/2024 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 44 bp (basis points), as of 05/04/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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