EUPHORIA OVER THE PROMISE OF AN EFFECTIVE COVID VACCINES GAVE WAY TO THE REALITY OF SKY ROCKETING CASES AND RAPIDLY RISING DEATHS. STIMULUS DEAL IN DOUBT AS WELL AS SENATE REPUBLICANS WANT TARGETED STIMULUS. 10 Year Treasury notes were up 2.9 bps. S&P -1.08%, Dow -1.00%, NASDAQ -0.65%.
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Market Summaries
North American Bond Research – November 12, 2020
Posted on November 12, 2020|
HIGH YIELD BOND RESEARCH
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November 12, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 53 MILLION+ CASES AND 1.3 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 10.8 MILLION+ CASES AND 249000+ 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 | ||||||||||||||||||||||||||||||
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Revlon Consumer Products Corp. 5.75% 2/15/2021 Pacific Gas & Electric Co. 4.95% 7/1/2050 Vale Overseas LTD 6.25% 8/10/2026 T-Mobile USA Inc. 3.5% 4/15/2025 144A Revlon Consumer Products Corp. 6.25% 8/1/2024 Micron Technology Inc. 4.663% 2/15/2030 Vale Overseas LTD 3.75% 7/8/2030 Continental Resources Inc. 4.375% 1/15/2028 Chemours Co. LLC 7% 5/15/2025 Petrobras Global Finance BV 6.85% 6/5/2115 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
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(None Current 11/12/2020)
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1. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB
2. Amentum Holdings LLC: $980MM TL (B1/B) 3. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB 4. Covis Group SARL: $485MM bank debt: $460MM secured TL; $25MM revolver 5. Amentum Holdings LLC: $980MM TL (B1/B) 6. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB 7. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB 8. Les Schwab Tire Centers: $1.575MM TLB (B2/B) 9. J.D. Power: $100MM incremental TL 10. Greystone Select Financial: $400MM TLB (Ba2/B+/BB-) |
Additional Commentary
NEW ISSUANCE WATCH: No New Issues.
| Top Widening Loans | Top Narrowing Loans |
| Jo-Ann Stores Inc. (USD) TL2 L+925 05/02/2024 Compass IV LTD (EUR) TL E+800 05/09/2026 Equinox Holdings Inc. (USD) TLB L+300 03/08/2024 MFG / MRH (GBP) TL2 06/21/2026 PortAventura World (EUR) TLB E+350 06/14/2024 |
Wesco Aircraft Hardware Corp. (USD) TLA L+300 10/04/2021 Fortress Merger Sub Inc. (USD) TL L+400 10/21/2023 Sundyne US Purchaser (USD) TLB L+425 03/17/2027 GGP Inc. (USD) TLB L+250 08/24/2025 GGP Inc. (USD) TLA2 L+250 08/24/2023 |
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 14 bps (basis points), as of 11/10/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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November 12, 2020
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Bond Markets
EUPHORIA OVER THE PROMISE OF AN EFFECTIVE COVID VACCINES GAVE WAY TO THE REALITY OF SKY ROCKETING CASES AND RAPIDLY RISING DEATHS. STIMULUS DEAL IN DOUBT AS WELL AS SENATE REPUBLICANS WANT TARGETED STIMULUS. 10 Year Treasury notes were up 2.9 bps. S&P -1.08%, Dow -1.00%, NASDAQ -0.65%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 53 MILLION+ CASES AND 1.3 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 10.8 MILLION+ CASES AND 249000+ 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 | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Verizon Communications Inc. 2.65% 11/20/2040 Verizon Communications Inc. 2.875% 11/20/2050 Verizon Communications Inc. 1.75% 1/20/2031 Bristol-Myers Squibb Co. 2.35% 11/13/2040 Morgan Stanley VAR% 2/13/2032 Verizon Communications Inc. 3% 11/20/2060 Bristol-Myers Squibb Co. 2.55% 11/13/2050 CVS Health Corp. 5.05% 3/25/2048 Anheuser-Busch Inbev Worldwide Inc. 4.5% 6/1/2050 Bristol-Myers Squibb Co. 1.45% 11/13/2030 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
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(None Current 11/12/2020)
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Additional Commentary
NEW ISSUANCE WATCH: No new issues.
| Top Widening Loans | Top Narrowing Loans |
| Jo-Ann Stores Inc. (USD) TL2 L+925 05/02/2024 Compass IV LTD (EUR) TL E+800 05/09/2026 Equinox Holdings Inc. (USD) TLB L+300 03/08/2024 MFG / MRH (GBP) TL2 06/21/2026 PortAventura World (EUR) TLB E+350 06/14/2024 |
Wesco Aircraft Hardware Corp. (USD) TLA L+300 10/04/2021 Fortress Merger Sub Inc. (USD) TL L+400 10/21/2023 Sundyne US Purchaser (USD) TLB L+425 03/17/2027 GGP Inc. (USD) TLB L+250 08/24/2025 GGP Inc. (USD) TLA2 L+250 08/24/2023 |
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 14 bps (basis points), as of 11/12/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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