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North American Bond Research – May 7, 2020

Posted on May 7, 2020

HIGH YIELD BOND RESEARCH

May 7, 2020

Bond Markets

ALMOST 3.2 MILLION AMERICANS FILED FOR UNEMPLOYMENT, BUT THE MARKET SHRUGGED IT OFF AND INSTEAD FOCUSED ON EUROPE AND STATES OPENING UP THEIR ECONOMIES. 10 Year Treasury notes were down 8 basis points. S&P +1.15%, Dow +0.89%, NASDAQ +1.41%.

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.9 MILLION+ CASES AND 270000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.3 MILLION+ CASES AND 77000+ 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

+	Gap Inc. 5.95% 4/12/2021	+0.6%
	Ford Motor Co. 9% 4/22/2025	+1.2%
	Continental Resources Inc. 4.9% 6/1/2044	+1.0%
	General Motors Co. 6.25% 10/2/2043	+1.6%
	General Motors Co. 5.2% 4/1/2045	+1.0%
–	Ford Motor Co. 8.5% 4/21/2023	-1.0%
	Whiting Petroleum Corp. 5.75% 3/15/2021	-25.3%
	Petrobras Global Finance BV 6.85% 6/5/2115	-2.0%
	Whiting Petroleum Corp. 6.625% 1/15/2026	-3.1%
	Occidental Petroleum Corp. 2.7% 8/15/2022	-0.6%

Gap Inc.   5.95% 4/12/2021
Ford Motor Co.   8.5% 4/21/2023
Ford Motor Co.   9% 4/22/2025
Whiting Petroleum Corp.   5.75% 3/15/2021
Continental Resources Inc.   4.9% 6/1/2044
Petrobras Global Finance BV   6.85% 6/5/2115
General Motors Co.   6.25% 10/2/2043
Whiting Petroleum Corp.   6.625% 1/15/2026
Occidental Petroleum Corp.   2.7% 8/15/2022
General Motors Co.   5.2% 4/1/2045

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.23%	0.78%	7.26%	-6.11%	-4.97%	5.45%
Mining	0.93%	2.22%	17.32%	-27.74%	-28.28%	-20.89%
Construction	0.13%	0.28%	5.25%	-7.81%	-5.97%	2.98%
Manufacturing	0.16%	0.03%	5.64%	-8.14%	-6.88%	0.61%
Transportion, Communication, Electric/Gas	0.18%	0.53%	7.43%	-4.46%	-3.52%	3.80%
Wholesale	0.32%	0.92%	8.62%	-8.06%	-6.88%	-0.33%
Retail	0.28%	0.57%	5.46%	-10.88%	-9.74%	-2.18%
Finance, Insurance, Real-Estate	0.09%	0.26%	5.00%	-8.93%	-7.78%	-0.51%
Services	0.21%	0.07%	6.22%	-8.20%	-7.24%	0.90%
Public Administration	0.13%	0.56%	8.22%	-6.26%	-5.39%	2.76%
Energy	0.95%	3.19%	21.46%	-25.14%	-25.43%	-19.34%

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

New Issues	Forward Calendar
1. GE Capital Corp. (USD) 3.45% 5/15/2025 144A (05/06/2020): 1350MM Senior Unsecured Notes, Price at Issuance 99.909, Yielding 3.47%. 2. GE Capital Corp. (USD) 4.4% 5/15/2030 144A (05/06/2020): 1400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.4%. 3. William Carter Co. (USD) 5.5% 5/15/2025 144A (05/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%. 4. Owens-Brockway Glass Container Inc. (USD) 6.625% 5/13/2027 144A (05/06/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.63%. 5. Marriott Ownership Resorts Inc. (USD) 6.125% 9/15/2025 Reg S (05/06/2020): 500MM Secured Notes, Price at Issuance 100, Yielding 6.13%. 6. William Carter Co. (USD) 5.5% 5/15/2025 Reg S (05/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%. 7. 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%. 8. 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%. 9. Varonis System Inc. (USD) 1.25% 8/15/2025 CVT (05/07/2020): 220MM Senior Unsecured Notes.	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. GE Capital Corp. (USD) 3.45% 5/15/2025 144A (05/06/2020): 1350MM Senior Unsecured Notes, Price at Issuance 99.909, Yielding 3.47%.

2. GE Capital Corp. (USD) 4.4% 5/15/2030 144A (05/06/2020): 1400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.4%.

3. William Carter Co. (USD) 5.5% 5/15/2025 144A (05/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%.

4. Owens-Brockway Glass Container Inc. (USD) 6.625% 5/13/2027 144A (05/06/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.63%.

5. Marriott Ownership Resorts Inc. (USD) 6.125% 9/15/2025 Reg S (05/06/2020): 500MM Secured Notes, Price at Issuance 100, Yielding 6.13%.

6. William Carter Co. (USD) 5.5% 5/15/2025 Reg S (05/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%.

7. 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%.

8. 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%.

9. Varonis System Inc. (USD) 1.25% 8/15/2025 CVT (05/07/2020): 220MM Senior Unsecured Notes.

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: GE Capital Corp issued 2750 MM in Notes.

Top Widening Loans	Top Narrowing Loans
Delachaux SA (USD) TLB L+450 04/16/2026 Entertainment Properties Trust (USD) TL L+110 02/27/2023 Aruba Investments Inc. (USD) TL L+325 02/01/2022 G-III Apparel Group LTD (USD) TLB L+525 12/01/2022 Ball Corp. (USD) RC L+150 03/25/2024	Sebia SA (EUR) TLB E+300 10/24/2024 Kenan Advantage Group Inc. (USD) TLB2 L+300 07/24/2022 KIK Custom Products Inc. (USD) TLB L+400 05/15/2023 Convergint Technologies LLC (USD) TL L+375 02/03/2025 Broadcom LTD (USD) TLA7 05/07/2026

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 34 bp (basis points), as of 05/07/2020
Net negative capital flows into high-yield ETFs & mutual funds

INVESTMENT GRADE BOND RESEARCH

May 7, 2020

Bond Markets

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CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 3.9 MILLION+ CASES AND 270000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 1.3 MILLION+ CASES AND 77000+ 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. 5.805% 5/1/2050	+0.8%
	Apple Inc. 1.125% 5/11/2025	+0.7%
	Boeing Co. 5.15% 5/1/2030	+0.1%
	Boeing Co. 5.93% 5/1/2060	+0.1%
	Charles Schwab Corp. 5.375% PERP	+0.1%
–	Southwest Airlines Co. 4.75% 5/4/2023	-0.5%
	General Electric Co. FLT% PERP (1)	-0.1%
	Oracle Corp. 3.6% 4/1/2050	-0.0%
	Southwest Airlines Co. 1.25% 5/1/2025	-0.7%
	JP Morgan Chase & Co. 3.25% 9/23/2022	-0.0%

Boeing Co.   5.805% 5/1/2050
Apple Inc.   1.125% 5/11/2025
Boeing Co.   5.15% 5/1/2030
Boeing Co.   5.93% 5/1/2060
Charles Schwab Corp.   5.375% PERP
Gap Inc.   5.95% 4/12/2021
Boeing Co.   4.508% 5/1/2023
Boeing Co.   4.875% 5/1/2025
Amgen Inc.   3.375% 2/21/2050
Apple Inc.   1.65% 5/11/2030

Industry Returns Tracker

Industry	Past Day	Past Week	Past Month	Past Quarter	YTD	Past Year
Agriculture, Forestry, Fishing	0.03%	-0.03%	4.26%	-2.19%	0.16%	4.93%
Mining	-0.03%	0.62%	8.62%	-6.29%	-4.94%	2.98%
Construction	-0.14%	0.04%	5.99%	-4.32%	-2.32%	4.19%
Manufacturing	-0.33%	-0.78%	3.66%	-0.45%	1.35%	9.16%
Transportion, Communication, Electric/Gas	-0.43%	-0.88%	5.46%	-0.32%	1.97%	11.20%
Wholesale	-0.02%	-0.20%	4.67%	-2.17%	-0.60%	7.26%
Retail	-0.39%	-0.84%	3.71%	0.20%	1.91%	11.18%
Finance, Insurance, Real-Estate	-0.10%	-0.22%	3.14%	-0.43%	1.02%	7.49%
Services	-0.37%	-0.77%	3.37%	-0.83%	1.00%	9.13%
Public Administration	-0.02%	0.03%	0.44%	3.13%	4.03%	6.51%
Energy	-0.07%	0.60%	8.60%	-6.48%	-5.25%	2.62%

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

New Issues	New Issues [Continued]
1. Volkswagen Group of America Finance LLC (USD) 3.35% 5/13/2025 Reg S (05/06/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.895, Yielding 3.37%. 2. Volkswagen Group of America Finance LLC (USD) 2.9% 5/13/2022 Reg S (05/06/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.946, Yielding 2.93%. 3. Apellis Pharmaceuticals, Inc. (USD) 3.5% 9/15/2026 CVT (05/06/2020): 300MM Senior Unsecured Notes. 4. Transcontinental Gas Pipe Corp. (USD) 3.25% 5/15/2030 Reg S (05/06/2020): 700MM Senior Unsecured Notes, Price at Issuance 99.787, Yielding 3.28%. 5. Transcontinental Gas Pipe Corp. (USD) 3.95% 5/15/2050 Reg S (05/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.424, Yielding 3.98%. 6. Transcontinental Gas Pipe Corp. (USD) 3.25% 5/15/2030 144A (05/06/2020): 700MM Senior Unsecured Notes, Price at Issuance 99.787, Yielding 3.28%. 7. GE Capital Corp. (USD) 4.4% 5/15/2030 144A (05/06/2020): 1400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.4%. 8. GE Capital Corp. (USD) 4.4% 5/15/2030 Reg S (05/06/2020): 1400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.4%. 9. GE Capital Corp. (USD) 4.55% 5/15/2032 144A (05/06/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.55%. 10. Qualcomm Inc. (USD) 2.15% 5/20/2030 (05/06/2020): 1200MM Senior Unsecured Notes, Price at Issuance 99.596, Yielding 2.2%.

New Issues

New Issues [Continued]

1. Volkswagen Group of America Finance LLC (USD) 3.35% 5/13/2025 Reg S (05/06/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.895, Yielding 3.37%.

2. Volkswagen Group of America Finance LLC (USD) 2.9% 5/13/2022 Reg S (05/06/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.946, Yielding 2.93%.

3. Apellis Pharmaceuticals, Inc. (USD) 3.5% 9/15/2026 CVT (05/06/2020): 300MM Senior Unsecured Notes.

4. Transcontinental Gas Pipe Corp. (USD) 3.25% 5/15/2030 Reg S (05/06/2020): 700MM Senior Unsecured Notes, Price at Issuance 99.787, Yielding 3.28%.

5. Transcontinental Gas Pipe Corp. (USD) 3.95% 5/15/2050 Reg S (05/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.424, Yielding 3.98%.

6. Transcontinental Gas Pipe Corp. (USD) 3.25% 5/15/2030 144A (05/06/2020): 700MM Senior Unsecured Notes, Price at Issuance 99.787, Yielding 3.28%.

7. GE Capital Corp. (USD) 4.4% 5/15/2030 144A (05/06/2020): 1400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.4%.

8. GE Capital Corp. (USD) 4.4% 5/15/2030 Reg S (05/06/2020): 1400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.4%.

9. GE Capital Corp. (USD) 4.55% 5/15/2032 144A (05/06/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.55%.

10. Qualcomm Inc. (USD) 2.15% 5/20/2030 (05/06/2020): 1200MM Senior Unsecured Notes, Price at Issuance 99.596, Yielding 2.2%.

Additional Commentary

NEW ISSUANCE WATCH: on 05/07/2020 participants welcome a $1000MM new corporate-bond offering by Volkswagen Group of America Finance.

Top Widening Loans	Top Narrowing Loans
Delachaux SA (USD) TLB L+450 04/16/2026 Entertainment Properties Trust (USD) TL L+110 02/27/2023 Aruba Investments Inc. (USD) TL L+325 02/01/2022 G-III Apparel Group LTD (USD) TLB L+525 12/01/2022 Ball Corp. (USD) RC L+150 03/25/2024	Sebia SA (EUR) TLB E+300 10/24/2024 Kenan Advantage Group Inc. (USD) TLB2 L+300 07/24/2022 KIK Custom Products Inc. (USD) TLB L+400 05/15/2023 Convergint Technologies LLC (USD) TL L+375 02/03/2025 Broadcom LTD (USD) TLA7 05/07/2026

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 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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