North American Bond Research – November 14, 2019

STOCK MARKET AGAIN IS STALLED AS TRADE WAR WITH CHINA IS AT A STANDSTILL. Trade, political and fiscal headwinds are causing the pause in the record-breaking stock market. The 10-year note fell 5.5 basis points. S&P +0.08%, DOW -0.01%, NASDAQ -0.04%

Key Gainers and Losers	Volume Leaders
+   Diamondback Energy Inc. 4.75% 11/1/2024 + 0.8%   Sabine Pass Liquefaction LLC 5.625% 2/1/2021 (1) + 0.1%   Teva Pharmaceutical Industries LTD 3.15% 10/1/2026 + 0.5% –   Intelsat Luxembourg SA 8.125% 6/1/2023 -7.1%   Fibria Overseas Finance LTD 5.5% 1/17/2027 -0.6%   Latam Finance Limited 6.875% 4/11/2024 Reg S -0.2%	Intelsat Luxembourg SA   8.125% 6/1/2023 Fibria Overseas Finance LTD   5.5% 1/17/2027 Antero Resources Corp.   5.625% 6/1/2023

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.20% 0.29% 0.63% 3.65% 18.11% 17.64% Mining -0.20% -0.09% 0.11% -0.99% 5.22% 1.00% Construction -0.18% -0.29% 0.20% 2.63% 14.89% 13.45% Manufacturing -0.08% 0.11% 1.24% 2.41% 12.00% 10.32% Transportion, Communication, Electric/Gas -0.04% -0.19% -0.16% 1.25% 13.31% 11.33% Wholesale -0.19% 0.09% 0.02% 1.08% 11.81% 9.09% Retail -0.14% -0.21% 0.40% 2.15% 15.22% 12.19% Finance, Insurance, Real-Estate -0.07% 0.02% 0.87% 2.24% 13.65% 11.31% Services -0.09% -0.07% 0.58% 2.47% 13.00% 11.11% Public Administration 0.04% -0.15% 0.75% 1.66% 13.87% 15.08% Energy -0.14% -0.28% -0.17% -0.88% 6.02% 2.12%   Total returns (non-annualized) by rating, market weighted.

New Issues	Forward Calendar
1. Wolverine Escrow LLC (USD) 9% 11/15/2026 144A (11/13/2019): 900MM Secured Notes, Price at Issuance 9, Yielding 103.04%. 2. Outfront Media Capital LLC (USD) 4.625% 3/15/2030 Reg S (11/13/2019): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%. 3. Cascades Inc. (USD) 5.125% 1/15/2026 144A (11/13/2019): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%.	1. Qmax Financial Holdings Inc.: $225MM, Expected 4th Quarter 2019 2. Presidio Inc.: $1.775B high yield bonds, Expected 4th Quarter 2019

NEW ISSUANCE WATCH: on 11/14/19 participants welcome a $1175MM new corporate-bond offering by
Wolverine Ecrow The most recent data showed a money flowed out of ETF/mutual funds for the week ended 11/01/2019, with a net inflow of $940 Million.

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14) Hertz Corp. (5Y Sen USD CR14) Hovnanian Enterprises Inc. (5Y Sen USD XR14)	Ghana, Republic of (5Y Sen USD CR14) Road King Infrastructure LTD (5Y Sen USD MR14) San Miguel Corp. (5Y Sen USD CR14)

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 11/14/19
• Net positive capital flows into high-yield ETFs & mutual funds

STOCK MARKET AGAIN IS STALLED AS TRADE WAR WITH CHINA IS AT A STANDSTILL. Trade, political and fiscal headwinds are causing the pause in the record-breaking stock market. The 10-year note fell 5.5 basis points. S&P +0.08%, DOW -0.01%, NASDAQ -0.04%

MORE FALLOUT FROM YESTERDAY’S TESTIMONY. From the second call disclosed in yesterday’s testimony, a second person at the table heard Trump ask about whether Ukraine will go ahead with the investigation into the 2016 election and the Bidens. They also stated they heard Ambassador Soderlund state that Trump stated the investigations were more important than Ukraine. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bonds. High-yield edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded,  Abbvie Inc. (USD) 2.6% 11/21/2024  made analysts’ ‘Conviction Buy’ list. (See the chart below for Abbvie Inc. bonds) Pierre Robert

Key Gainers and Losers	Volume Leaders
+   FirstEnergy Corp. 3.9% 7/15/2027 + 0.5%   Gilead Sciences Inc. 2.55% 9/1/2020 + 0.0%   AT&T Inc. 4.85% 3/1/2039 + 0.4% –   Apple Inc. 2.4% 5/3/2023 -0.0%   Hewlett-Packard Co. 3.6% 10/15/2020 -0.0%   Altria Group Inc. 4.8% 2/14/2029 -0.8%	Abbvie Inc.   4.25% 11/21/2049 144A FirstEnergy Corp.   3.9% 7/15/2027 Amazon.com Inc.   4.05% 8/22/2047

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.07% 0.09% 0.50% 0.94% 5.86% 6.56% Mining 0.19% -0.26% -0.13% 0.05% 11.56% 12.50% Construction 0.08% -0.27% -0.18% 0.26% 8.62% 9.98% Manufacturing 0.21% -0.12% 0.20% 0.62% 10.93% 11.87% Transportion, Communication, Electric/Gas 0.26% -0.25% -0.02% 0.12% 13.45% 15.05% Wholesale 0.22% -0.03% 0.67% 1.43% 13.03% 12.96% Retail 0.23% -0.15% 0.07% 0.38% 12.08% 13.12% Finance, Insurance, Real-Estate 0.14% -0.12% 0.28% 0.69% 9.46% 10.65% Services 0.21% -0.17% 0.03% 0.55% 10.77% 12.19% Public Administration 0.10% -0.11% -0.01% 0.15% 4.39% 6.16% Energy 0.19% -0.28% -0.10% -0.03% 11.87% 12.62%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. BNP Paribas (USD) 2.819% 11/19/2025 Reg S (11/13/2019): 2000MM Senior Non Preferred Notes, Price at Issuance 100, Yielding 2.82%. 2. L3Harris Tech Inc. (USD) 2.9% 12/15/2029 (11/13/2019): 400MM Senior Unsecured Notes, Price at Issuance 99.731, Yielding 2.93%. 3. FS KKR Capital Corp. (USD) 4.125% 2/1/2025 (11/13/2019): 425MM Senior Unsecured Notes, Price at Issuance 99.153, Yielding 4.31%.

NEW ISSUANCE WATCH: on 11/14/19 participants welcome a $1000MM new corporate-bond offering by
Nationwide Financial ServiceThe most recent data showed a money flowed out of ETF/mutual funds for the week ended 11/01/2019, with a net inflow of $940 Million.

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14) Weatherford International LTD (5Y Sen USD XR14) Hertz Corp. (5Y Sen USD XR14)	Ghana, Republic of (5Y Sen USD CR14) Export Credit Bank of Turkey (5Y Sen USD CR14) San Miguel Corp. (5Y Sen USD CR14)

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 11/14/19
• Net positive capital flows into high-yield ETFs & mutual funds

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