North American Bond Research – November 19, 2019

CRUDE OIL FELL 3.3% ON RISING OIL INVENTORY. CRUDE OIL INVENTORY ROSE 6 MILLION BARRELS for the week of November 15th. Analysts had expected an increase of 1.5 million barrels. The 10-year note lost 2.2 basis points. S&P -0.06%, DOW -0.36%, NASDAQ +0.24%.

Key Gainers and Losers	Volume Leaders
+   Sinclair Television Group Inc. 5.125% 2/15/2027 144A + 0.2%   Asgn Inc. 4.625% 5/15/2028 144A + 0.1% –   Intelsat Luxembourg SA 8.125% 6/1/2023 -14.6%   Intelsat Jackson Hldg SA 9.75% 7/15/2025 144A -7.3%   Intelsat Jackson Hldg SA 8% 2/15/2024 144A -0.7%	Intelsat Luxembourg SA   8.125% 6/1/2023 Intelsat Jackson Hldg SA   8.5% 10/15/2024 144A Intelsat Connect Finance   9.5% 2/15/2023 144A Intelsat Jackson Hldg SA   9.75% 7/15/2025 144A

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.05% -0.17% 0.09% 3.36% 17.61% 18.02% Mining -0.03% -0.02% -0.16% -0.30% 5.31% 2.12% Construction 0.01% -0.04% 0.02% 2.63% 15.19% 14.51% Manufacturing 0.04% 0.18% 0.83% 2.72% 12.27% 11.30% Transportation, Communication, Electric/Gas 0.02% -0.03% -0.36% 1.19% 13.11% 11.94% Wholesale -0.04% -0.01% -0.02% 1.68% 12.19% 10.57% Retail -0.03% -0.03% 0.18% 2.48% 15.75% 13.88% Finance, Insurance, Real-Estate 0.04% 0.10% 0.62% 2.43% 13.53% 12.05% Services 0.04% -0.19% 0.15% 2.33% 12.43% 11.49% Public Administration -0.08% 0.05% 0.45% 1.36% 13.85% 15.34% Energy -0.02% 0.13% -0.18% -0.27% 6.22% 3.34%   Total returns (non-annualized) by rating, market-weighted.

New Issues	Forward Calendar
1. Univar Inc. (USD) 5.125% 12/1/2027 Reg S (11/18/2019): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%. 2. Boyd Gaming Corp. (USD) 4.75% 12/1/2027 144A (11/18/2019): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%. 3. Mattel Inc. (USD) 5.875% 12/15/2027 Reg S (11/19/2019): 600MM Senior Unsecured Notes, Price at Issuance 99.203, Yielding 6%.	1. Qmax Financial Holdings Inc.: $225MM, Expected 4th Quarter 2019 2. DDM Holding AG: ¬100MM, Expected Q4 2019 3. Alpha Auto Group: $225MM notes, 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 11/15/2019, with a net outflow of $240 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 MR14) Hovnanian Enterprises Inc. (5Y Sen USD XR14)	Ghana, Republic of (5Y Sen USD CR14) Export Credit Bank of Turkey (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD XR14)

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 35 bp (basis points), as of 11/19/19
• Net negative capital flows into high-yield ETFs & mutual funds

CRUDE OIL FELL 3.3% ON RISING OIL INVENTORY. CRUDE OIL INVENTORY ROSE 6 MILLION BARRELS for the week of November 15th. Analysts had expected an increase of 1.5 million barrels. The 10-year note lost 2.2 basis points. S&P -0.06%, DOW -0.36%, NASDAQ +0.24%.

TRUMP IMPEACHMENT INQUIRY CONTINUED TODAY WITH TESTIMONY FROM LT COLONEL VINDMAN AND JENNIFER WILLIAMS. Lt Colonel Vindman called Trump’s request to Ukraine’s President Zelensky Improper while Jennifer Williams stated it was unusual. 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,  Viacom Inc. (USD) 2.25% 2/4/2022  made analysts’ ‘Conviction Buy’ list. (See the chart below for Viacom Inc. bonds) Pierre Robert

Key Gainers and Losers	Volume Leaders
+   Abbvie Inc. 4.25% 11/21/2049 144A + 0.2%   Energy Transfer Partners LP 6.25% 4/15/2049 + 0.1%   AT&T Inc. 4.35% 3/1/2029 + 0.4% –   Abbvie Inc. 2.6% 11/21/2024 144A -0.0%   Canadian Natural Resources LTD 2.95% 1/15/2023 -0.1%   Bayer US Finance LLC 3.5% 6/25/2021 144A -0.0%	Abbvie Inc.   4.25% 11/21/2049 144A Abbvie Inc.   2.6% 11/21/2024 144A AT&T Inc.   4.55% 3/9/2049

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.01% 0.14% 0.55% 0.84% 5.94% 6.59% Mining 0.10% 0.67% 0.10% -0.14% 12.02% 13.49% Construction 0.07% 0.60% 0.18% 0.02% 9.92% 10.79% Manufacturing 0.11% 0.67% 0.33% 0.30% 11.08% 12.32% Transportion, Communication, Electric/Gas 0.11% 0.82% 0.19% -0.27% 13.73% 15.68% Wholesale 0.12% 0.54% 0.45% 1.12% 13.26% 13.61% Retail 0.12% 0.66% 0.12% 0.14% 12.11% 13.36% Finance, Insurance, Real-Estate 0.09% 0.48% 0.34% 0.46% 9.83% 11.11% Services 0.11% 0.67% 0.13% 0.14% 11.08% 12.68% Public Administration 0.08% 0.29% 0.00% -0.07% 4.69% 6.23% Energy 0.12% 0.65% 0.09% -0.23% 12.29% 13.74%   Total returns (non-annualized) by rating, market weighted.

New Issues

New Issues [Continued]

1. Laboratory Corp. of America Holdings (USD) 2.95% 12/1/2029 (11/18/2019): 650MM Senior Unsecured Notes, Price at Issuance 99.741, Yielding 2.98%. 2. American Honda Finance Corp. (USD) 1.95% 5/20/2022 (11/18/2019): 600MM Senior Unsecured Notes, Price at Issuance 99.966, Yielding 1.96%. 3. Arizona Public Service (USD) 3.5% 12/1/2049 (11/18/2019): 300MM Senior Unsecured Notes, Price at Issuance 99.944, Yielding 3.5%.

NEW ISSUANCE WATCH: on 11/14/19 participants welcome a $1000MM new corporate-bond offering by
Nationwide Financial Service. The most recent data showed a money flowed out of ETF/mutual funds for the week ended 11/15/2019, with a net outflow of $240 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 MR14) Hertz Corp. (5Y Sen USD CR14)	Ghana, Republic of (5Y Sen USD CR14) Road King Infrastructure LTD (5Y Sen USD MR14) SuperValu Inc. (5Y Sen USD MR14)

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 35 bp (basis points), as of 11/19/19
• Net positive capital flows into high-yield ETFs & mutual funds

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