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North American Bond Research – May 6, 2020

Posted on May 6, 2020

HIGH YIELD BOND RESEARCH

May 6, 2020

Bond Markets

MARKETS MIXED TO DOWN AS INVESTORS FACE 4 COLLIDING FACTORS: OPENING AN ECONOMY, CORONAVIRUS STILL RAGING, TERRIBLE ECONOMIC DAMAGE, AND NOT KNOWING WHAT IS ENOUGH TO PULL THE MARKETS OUT OF THIS CONUNDRUM AND CURING THIS VIRUS. 10 Year Treasury notes were up 5.4 basis points. S&P -0.7%, Dow -0.91%, NASDAQ +0.51%.

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.8 MILLION+ CASES AND 264000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.25 MILLION+ CASES AND 74000+ 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

+	Ford Motor Co. 8.5% 4/21/2023	+1.5%
	Ford Motor Co. 9% 4/22/2025	+1.2%
	General Motors Co. 5.2% 4/1/2045	+1.8%
	Intelsat Jackson Hldg SA 5.5% 8/1/2023 (1)	+4.1%
	EQT Corp. 7% 2/1/2030	+2.4%
–	Whiting Petroleum Corp. 6.25% 4/1/2023 144A	-15.1%
	General Motors Co. 6.25% 10/2/2043	-0.4%
	Occidental Petroleum Corp. 2.7% 8/15/2022	-3.2%
	Occidental Petroleum Corp. 5.55% 3/15/2026	-2.0%
	Gap Inc. 5.95% 4/12/2021	-0.3%

Ford Motor Co.   8.5% 4/21/2023
Whiting Petroleum Corp.   6.25% 4/1/2023 144A
Ford Motor Co.   9% 4/22/2025
General Motors Co.   5.2% 4/1/2045
General Motors Co.   6.25% 10/2/2043
Occidental Petroleum Corp.   2.7% 8/15/2022
Intelsat Jackson Hldg SA   5.5% 8/1/2023 (1)
Occidental Petroleum Corp.   5.55% 3/15/2026
EQT Corp.   7% 2/1/2030
Gap Inc.   5.95% 4/12/2021

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.21%	1.66%	7.08%	-6.13%	-5.18%	5.09%
Mining	1.64%	2.01%	17.25%	-29.26%	-29.93%	-21.55%
Construction	-0.03%	0.44%	5.05%	-7.93%	-6.16%	2.43%
Manufacturing	0.06%	0.06%	5.68%	-8.29%	-7.18%	0.35%
Transportion, Communication, Electric/Gas	0.13%	0.64%	7.34%	-4.59%	-3.91%	3.20%
Wholesale	0.06%	0.77%	10.23%	-9.50%	-8.39%	-1.80%
Retail	-0.05%	0.42%	5.14%	-10.00%	-9.05%	-1.37%
Finance, Insurance, Real-Estate	-0.20%	0.32%	4.62%	-9.66%	-8.53%	-1.13%
Services	0.01%	-0.13%	5.42%	-8.94%	-8.15%	0.36%
Public Administration	-0.09%	1.00%	8.11%	-6.64%	-5.61%	2.33%
Energy	1.78%	3.34%	21.56%	-26.58%	-26.94%	-19.81%

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

New Issues	Forward Calendar
1. Avis Budget Finance PLC (USD) 10.5% 5/15/2025 144A (05/05/2020): 500MM Secured Notes, Price at Issuance 97, Yielding 11.3%. 2. Avis Budget Finance PLC (USD) 10.5% 5/15/2025 Reg S (05/05/2020): 500MM Secured Notes, Price at Issuance 97, Yielding 11.3%. 3. NCL Corp. LTD (USD) 12.25% 5/15/2024 144A (05/05/2020): 675MM Secured Notes, Price at Issuance 99, Yielding 12.57%. 4. Compass Group Diversified Holdings LLC (USD) 8% 5/1/2026 (05/05/2020): 200MM Senior Unsecured Notes, Price at Issuance 101, Yielding 7.79%. 5. NCL Corp. LTD (USD) 12.25% 5/15/2024 Reg S (05/05/2020): 675MM Secured Notes, Price at Issuance 99, Yielding 12.57%. 6. Wolverine World Wide Inc. (USD) 6.375% 5/15/2025 144A (05/06/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%. 7. Wolverine World Wide Inc. (USD) 6.375% 5/15/2025 Reg S (05/06/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%.	1. BRP Inc.: $600MM TL B2 (B1) 2. Championx: $537MM TL 3. Xperi Corp. : $1.1B seven-year secured covenant lite TLB 4. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 5. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL 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. Conservice Midco LLc: $715MM credit facilities: $50MM revolver (B2/B); $475MM cove-lite TL (B2/B); $190MM TL 9. Whole Earth Brands (ACT II GLOBAL ACQUISTION CORP.):: $235 MM credit facilities: $50MM reolver; $185MM term A 10. RSA: $1.425B credit facilities: $75MM revolver; $1B TL; $350MM TL

New Issues

Forward Calendar

1. Avis Budget Finance PLC (USD) 10.5% 5/15/2025 144A (05/05/2020): 500MM Secured Notes, Price at Issuance 97, Yielding 11.3%.

2. Avis Budget Finance PLC (USD) 10.5% 5/15/2025 Reg S (05/05/2020): 500MM Secured Notes, Price at Issuance 97, Yielding 11.3%.

3. NCL Corp. LTD (USD) 12.25% 5/15/2024 144A (05/05/2020): 675MM Secured Notes, Price at Issuance 99, Yielding 12.57%.

4. Compass Group Diversified Holdings LLC (USD) 8% 5/1/2026 (05/05/2020): 200MM Senior Unsecured Notes, Price at Issuance 101, Yielding 7.79%.

5. NCL Corp. LTD (USD) 12.25% 5/15/2024 Reg S (05/05/2020): 675MM Secured Notes, Price at Issuance 99, Yielding 12.57%.

6. Wolverine World Wide Inc. (USD) 6.375% 5/15/2025 144A (05/06/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%.

7. Wolverine World Wide Inc. (USD) 6.375% 5/15/2025 Reg S (05/06/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%.

1. BRP Inc.: $600MM TL B2 (B1)

2. Championx: $537MM TL

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

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

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

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. Conservice Midco LLc: $715MM credit facilities: $50MM revolver (B2/B); $475MM cove-lite TL (B2/B); $190MM TL

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

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

Additional Commentary

NEW ISSUANCE WATCH: Avis Budget Finance PLC issued 1000 MM in Notes.

Top Widening Loans	Top Narrowing Loans
Del Monte Foods Co. (USD) TL L+725 08/18/2021 Monitronics Intl. Inc. (USD) TL EXIT L+500 07/03/2024 Alliance Laundry Systems LLC (USD) TLA L+225 02/28/2024 CB Richard Ellis Services Inc. (USD) TLA L+100 03/04/2024 ABM Industries Inc. (USD) TLA L+225 09/01/2022	BI-Lo LLC (USD) TLB L+800 05/31/2024 Samsonite Intl. SA (USD) TLB L+175 04/19/2025 Hayward Ind Inc (USD) TLB L+350 08/04/2024 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Wolverine World Wide Inc. (USD) TL L+125 12/06/2023

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 36 bp (basis points), as of 05/06/2020
Net negative capital flows into high-yield ETFs & mutual funds

INVESTMENT GRADE BOND RESEARCH

May 6, 2020

Bond Markets

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.7 MILLION+ CASES AND 258000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.23 MILLION+ CASES AND 72000+ 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

+	Boeing Co. 5.04% 5/1/2027	+0.4%
	Wells Fargo & Co. VAR% 4/30/2026	+0.0%
	Apple Inc. 0.75% 5/11/2023	+0.0%
	Marsh & McLennan Cos Inc. 2.25% 11/15/2030	+0.4%
	Host Hotels & Resorts LP 3.375% 12/15/2029	+1.7%
–	Boeing Co. 5.15% 5/1/2030	-1.2%
	Boeing Co. 5.805% 5/1/2050	-2.0%
	Boeing Co. 5.93% 5/1/2060	-2.2%
	Apple Inc. 2.65% 5/11/2050	-2.0%
	Southwest Airlines Co. 1.25% 5/1/2025	-2.4%

Boeing Co.   5.15% 5/1/2030
Boeing Co.   5.805% 5/1/2050
Boeing Co.   5.93% 5/1/2060
Apple Inc.   2.65% 5/11/2050
Southwest Airlines Co.   1.25% 5/1/2025
Boeing Co.   4.875% 5/1/2025
Boeing Co.   4.508% 5/1/2023
Boeing Co.   5.04% 5/1/2027
General Electric Co.   FLT% PERP (1)
General Electric Co.   4.35% 5/1/2050

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.03%	-0.35%	3.30%	-0.67%	1.57%	4.79%
Mining	0.11%	0.98%	8.79%	-6.49%	-5.23%	3.15%
Construction	-0.19%	-0.01%	5.60%	-1.34%	1.04%	7.59%
Manufacturing	-0.09%	-0.40%	3.90%	-0.03%	1.77%	9.71%
Transportion, Communication, Electric/Gas	-0.17%	-0.43%	5.96%	0.28%	2.56%	11.99%
Wholesale	-0.12%	-0.13%	4.72%	-2.02%	-0.27%	8.17%
Retail	-0.14%	-0.40%	3.82%	0.92%	2.61%	11.81%
Finance, Insurance, Real-Estate	-0.05%	0.00%	3.24%	-0.41%	1.07%	7.80%
Services	-0.11%	-0.36%	3.58%	-0.18%	1.62%	9.98%
Public Administration	-0.00%	0.12%	0.35%	3.10%	4.06%	6.55%
Energy	0.13%	1.07%	9.05%	-6.36%	-5.21%	2.77%

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

New Issues	New Issues [Continued]
1. Clorox Co. (USD) 1.8% 5/15/2030 (05/05/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.109, Yielding 1.9%. 2. NextEra Energy Capital Holding Inc. (USD) 2.25% 6/1/2030 (05/05/2020): 2000MM Senior Unsecured Notes, Price at Issuance 99.963, Yielding 2.25%. 3. Ryder System Inc. (USD) 3.35% 9/1/2025 (05/05/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.931, Yielding 3.36%. 4. Sabine Pass Liquefaction LLC (USD) 4.5% 5/15/2030 144A (05/05/2020): 2000MM Secured Notes, Price at Issuance 99.744, Yielding 4.53%. 5. Sabine Pass Liquefaction LLC (USD) 4.5% 5/15/2030 Reg S (05/05/2020): 2000MM Secured Notes, Price at Issuance 99.744, Yielding 4.53%. 6. Berkley W R Corp. (USD) 4% 5/12/2050 (05/05/2020): 300MM Senior Unsecured Notes, Price at Issuance 99.515, Yielding 4.03%. 7. EPCOR Utilities Inc. (CAD) 2.899% 5/19/2050 (05/05/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.9%. 8. EPCOR Utilities Inc. (CAD) 1.299% 5/19/2023 (05/05/2020): 100MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.3%. 9. Barclays Bank PLC (USD) 1.7% 5/12/2022 (05/05/2020): 1750MM Senior Unsecured Notes, Price at Issuance 99.918, Yielding 1.74%. 10. Broadcom LTD (USD) 4.3% 11/15/2032 144A (05/05/2020): 2000MM Senior Unsecured Notes, Price at Issuance 99.874, Yielding 4.31%.

New Issues

New Issues [Continued]

1. Clorox Co. (USD) 1.8% 5/15/2030 (05/05/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.109, Yielding 1.9%.

2. NextEra Energy Capital Holding Inc. (USD) 2.25% 6/1/2030 (05/05/2020): 2000MM Senior Unsecured Notes, Price at Issuance 99.963, Yielding 2.25%.

3. Ryder System Inc. (USD) 3.35% 9/1/2025 (05/05/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.931, Yielding 3.36%.

4. Sabine Pass Liquefaction LLC (USD) 4.5% 5/15/2030 144A (05/05/2020): 2000MM Secured Notes, Price at Issuance 99.744, Yielding 4.53%.

5. Sabine Pass Liquefaction LLC (USD) 4.5% 5/15/2030 Reg S (05/05/2020): 2000MM Secured Notes, Price at Issuance 99.744, Yielding 4.53%.

6. Berkley W R Corp. (USD) 4% 5/12/2050 (05/05/2020): 300MM Senior Unsecured Notes, Price at Issuance 99.515, Yielding 4.03%.

7. EPCOR Utilities Inc. (CAD) 2.899% 5/19/2050 (05/05/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.9%.

8. EPCOR Utilities Inc. (CAD) 1.299% 5/19/2023 (05/05/2020): 100MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.3%.

9. Barclays Bank PLC (USD) 1.7% 5/12/2022 (05/05/2020): 1750MM Senior Unsecured Notes, Price at Issuance 99.918, Yielding 1.74%.

10. Broadcom LTD (USD) 4.3% 11/15/2032 144A (05/05/2020): 2000MM Senior Unsecured Notes, Price at Issuance 99.874, Yielding 4.31%.

Additional Commentary

NEW ISSUANCE WATCH: on 05/06/2020 participants welcome a $500MM new corporate-bond offering by Clorox Co.

Top Widening Loans	Top Narrowing Loans
Del Monte Foods Co. (USD) TL L+725 08/18/2021 Monitronics Intl. Inc. (USD) TL EXIT L+500 07/03/2024 Alliance Laundry Systems LLC (USD) TLA L+225 02/28/2024 CB Richard Ellis Services Inc. (USD) TLA L+100 03/04/2024 ABM Industries Inc. (USD) TLA L+225 09/01/2022	BI-Lo LLC (USD) TLB L+800 05/31/2024 Samsonite Intl. SA (USD) TLB L+175 04/19/2025 Hayward Ind Inc (USD) TLB L+350 08/04/2024 Hamilton Holdco LLC (USD) TLB L+200 01/02/2027 Wolverine World Wide Inc. (USD) TL L+125 12/06/2023

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 36 bp (basis points), as of 05/06/2020
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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