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North American Bond Research – November 16, 2020

Posted on November 16, 2020
HIGH YIELD BOND RESEARCH
November 16, 2020
Bond Markets

GLOBAL MARKETS ARE MIXED TO UP AS THE CORONA VIRUS PICKS UP STEAM GLOBALLY. LOCK DOWNS IN EUROPE ARE TURNING THE TIDE BUT THE ECONOMIC IMPACT IS IMMENSE. 10 Year Treasury notes were up 1.3 bps. S&P +1.16%, Dow +1.60%, NASDAQ +0.80%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 55.2 MILLION+ CASES AND 1.31 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 11.1 MILLION+ CASES AND 250000+ 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
+   Pacific Gas & Electric Co. 4.3% 3/15/2045 +1.6%
  Pacific Gas & Electric Co. 4.95% 7/1/2050 +0.9%
  Petrobras Global Finance BV 6.85% 6/5/2115 +1.1%
  Azul Investments LLP 5.875% 10/26/2024 Reg S +0.7%
  General Motors Co. 5.2% 4/1/2045 +0.6%
–   T-Mobile USA Inc. 3.5% 4/15/2025 144A -0.1%
  iStar Inc. 5.5% 2/15/2026 -0.7%
  Broadcom LTD 4.3% 11/15/2032 -0.2%
  Broadcom LTD 4.11% 9/15/2028 -0.2%
  Hospitality Properties Trust 5.25% 2/15/2026 -1.4%
Pacific Gas & Electric Co.   4.3% 3/15/2045
Pacific Gas & Electric Co.   4.95% 7/1/2050
Petrobras Global Finance BV   6.85% 6/5/2115
T-Mobile USA Inc.   3.5% 4/15/2025 144A
Azul Investments LLP   5.875% 10/26/2024 Reg S
General Motors Co.   5.2% 4/1/2045
Gulfport Energy Corp.   6.625% 5/1/2023
Revlon Consumer Products Corp.   5.75% 2/15/2021
Atento Luxco 1 SA   6.125% 8/10/2022 Reg S
iStar Inc.   5.5% 2/15/2026
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.13% 0.06% 0.62% 1.04% 6.22% 7.78%
Mining -0.32% 1.42% 4.10% 64.96% -7.34% -3.91%
Construction -0.19% 0.06% 0.47% 7.68% 7.64% 9.35%
Manufacturing -0.17% 0.32% 1.52% 2.94% 5.24% 7.71%
Transportion, Communication, Electric/Gas -0.12% 0.26% 3.09% 4.40% 5.42% 7.30%
Wholesale -0.11% 0.76% 0.72% 0.50% 3.87% 5.73%
Retail -0.16% 0.45% 1.18% 4.37% 4.51% 6.54%
Finance, Insurance, Real-Estate -0.09% 0.49% 1.79% 2.88% 4.39% 6.23%
Services -0.13% 0.76% 2.02% 3.29% 4.73% 6.33%
Public Administration -0.07% 0.13% 0.72% 3.08% 9.09% 11.06%
Energy -0.27% 1.51% 3.60% 56.23% -5.63% -1.68%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar

(None Current 11/16/2020)
1. Amentum Holdings LLC: $980MM TL (B1/B)

2. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB

3. Covis Group SARL: $485MM bank debt: $460MM secured TL; $25MM revolver

4. Mattress Firm: $550MM (B1/B+)

5. Symplr Software Inc.: $930MM TLs: $680MM TL, $250MM TL

6. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB

7. Smyrna Rady: $515MM senior secured notes (B1/)

8. Tervita: $500MM senior secured notes (B3/CCC+)

9. Tenneco: $500MM senior secured notes (Ba3/B)

10. Aston Martin: $840MM senior secured notes (Caa2/CCC)

Additional Commentary

NEW ISSUANCE WATCH:   No New issues.
Top Widening Loans Top Narrowing Loans
Compass IV LTD (EUR) TL E+800 05/09/2026
Imagina Media Audiovisual SL (EUR) TLB E+450 06/28/2025
Concordia International (EUR) TL E+525 09/06/2024
Sandvine Corp. (USD) TL 10/15/2026
Imagina Media Audiovisual SL (EUR) TLB2 L+450 06/22/2025
Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026
EG Group (EUR) TL E+775 03/23/2026
Drilling Info Inc. (USD) TL L+425 07/30/2025
Hurtigruten Group AS (EUR) TLC E+800 06/16/2023

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 11/16/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

INVESTMENT GRADE BOND RESEARCH
November 16, 2020
Bond Markets

GLOBAL MARKETS ARE MIXED TO UP AS THE CORONA VIRUS PICKS UP STEAM GLOBALLY. LOCK DOWNS IN EUROPE ARE TURNING THE TIDE BUT THE ECONOMIC IMPACT IS IMMENSE. 10 Year Treasury notes were up 1.3 bps. S&P +1.16%, Dow +1.60%, NASDAQ +0.80%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 55.2 MILLION+ CASES AND 1.31 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 11.1 MILLION+ CASES AND 250000+ 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
+   Boeing Co. 3.25% 2/1/2028 +0.6%
  JPMorgan Chase & Co. VAR% 11/19/2041 +0.1%
  Boeing Co. 5.805% 5/1/2050 +2.2%
  Boeing Co. 4.875% 5/1/2025 +0.2%
  Verizon Communications Inc. 2.65% 11/20/2040 +1.7%
–   Verizon Communications Inc. 2.875% 11/20/2050 -0.0%
  JPMorgan Chase & Co. VAR% 11/19/2031 -0.1%
  AT&T Inc. 2.75% 6/1/2031 -0.1%
  Verizon Communications Inc. 1.75% 1/20/2031 -0.1%
  Suzano Austria GmbH 3.75% 1/15/2031 -0.9%
Boeing Co.   3.25% 2/1/2028
Verizon Communications Inc.   2.875% 11/20/2050
JPMorgan Chase & Co.   VAR% 11/19/2041
Boeing Co.   5.805% 5/1/2050
JPMorgan Chase & Co.   VAR% 11/19/2031
Boeing Co.   4.875% 5/1/2025
Verizon Communications Inc.   2.65% 11/20/2040
AT&T Inc.   2.75% 6/1/2031
Verizon Communications Inc.   3% 11/20/2060
Boeing Co.   3.625% 2/1/2031
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Mining 0.08% -0.07% 0.86% 0.07% 6.33% 8.07%
Construction 0.13% -0.02% 1.45% 2.37% 6.84% 8.30%
Manufacturing 0.06% -0.22% 0.50% 0.49% 8.04% 9.36%
Transportion, Communication, Electric/Gas 0.18% -0.32% 0.61% -0.07% 9.05% 10.57%
Wholesale 0.03% -0.08% 1.00% 1.55% 8.35% 9.96%
Retail 0.09% -0.29% 0.58% 0.22% 9.29% 10.94%
Finance, Insurance, Real-Estate 0.02% -0.11% 0.52% 0.63% 7.03% 8.16%
Services 0.01% -0.19% 0.24% 0.35% 7.39% 8.38%
Public Administration 0.06% 0.03% 0.02% 0.42% 5.00% 5.39%
Energy 0.06% 0.13% 0.98% -0.12% 5.15% 7.26%
 
Total returns (non-annualized) by rating, market weighted.
New Issues New Issues [Continued]
1. 2001 Cat RE LTD (USD) FLT% 1/8/2024 (11/16/2020): 210MM Unsecured Notes, Price at Issuance 100.
Additional Commentary

NEW ISSUANCE WATCH:   JPMorgan Chase & Co. sold $5700MM in notes.
Top Widening Loans Top Narrowing Loans
Compass IV LTD (EUR) TL E+800 05/09/2026
Imagina Media Audiovisual SL (EUR) TLB E+450 06/28/2025
Concordia International (EUR) TL E+525 09/06/2024
Sandvine Corp. (USD) TL 10/15/2026
Imagina Media Audiovisual SL (EUR) TLB2 L+450 06/22/2025
Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026
EG Group (EUR) TL E+775 03/23/2026
Drilling Info Inc. (USD) TL L+425 07/30/2025
Hurtigruten Group AS (EUR) TLC E+800 06/16/2023

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 11/16/2020
  • Net positive capital flows into high-yield ETFs & mutual funds

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