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Market Summaries
North American Bond Research – November 20, 2019
Posted on November 20, 2019|
HIGH YIELD BOND RESEARCH
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November 20, 2019
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Bond Markets
US/CHINA PHASE 1 TRADE TALKS HIT A SNAG ON TARIFF ROLLBACK. DEAL VERY UNLIKELY TO BE MADE IN 2019 AND WILL MOST LIKELY BE DONE IN 2020. President Trump wanted the deal to be ready to sign in December 2019. The 10-year note lost 2.2 basis points. S&P -0.38%, DOW -0.4%, NASDAQ -0.51%.
AMBASSADOR SONDLUND ADMITTED HE PRESSURED UKRAINE TO INVESTIGATE THE BIDENS AT THE DIRECTION OF PRESIDENT TRUMP. Sondlund also stated that Guliani also stated to Ukraine that no aid would be forthcoming unless they conducted investigations into the 2016 election and the Bidens. 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, JC Penney Co Inc (USD) 7.625% 3/1/2097 made analysts’ ‘Conviction Buy’ list. (See the chart below for JC Penney Co Inc bonds) Pierre Robert
Key Gainers and Losers |
Volume Leaders |
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Abbvie Inc. 4.25% 11/21/2049 144A Nationwide Financial Services Inc. 3.9% 11/30/2049 144A Vodafone Group PLC FLT% 1/16/2024 |
Industry Returns Tracker |
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New Issues |
Forward Calendar |
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| 1. MSCI Inc. (USD) 4% 11/15/2029 (11/19/2019): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4%.
2. Banque Fed du Credit Mutuel (USD) 2.375% 11/21/2024 Reg S (11/19/2019): 500MM Senior Preferred Security, Price at Issuance 99.63, Yielding 2.45%. 3. Albemarle Corp. (USD) FLT% 11/15/2022 144A (11/19/2019): 200MM Senior Unsecured Notes, Price at Issuance 100. |
1. LIONSGATE: $3.6 billion bond and bank financing. Expected 3rd Quarter 2016.
2. CALLON PETROLEUM CO.: $350 million senior notes due 2024. Expected 3rd Quarter 2016. 3. FERRO CORP: $200 million offering senior notes due 2016, expected week of July 21, 2008. |
Additional Commentary
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.
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) Weatherford International LTD (5Y Sen USD XR14) Hertz Corp. (5Y Sen USD MR14) |
Ghana, Republic of (5Y Sen USD CR14) Road King Infrastructure LTD (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD MR14) |
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 11/20/19
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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November 20, 2019
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Bond Markets
US/CHINA PHASE 1 TRADE TALKS HIT A SNAG ON TARIFF ROLLBACK. DEAL VERY UNLIKELY TO BE MADE IN 2019 AND WILL MOST LIKELY BE DONE IN 2020. President Trump wanted the deal to be ready to sign in December 2019. The 10-year note lost 2.2 basis points. S&P -0.38%, DOW -0.4%, NASDAQ -0.51%.
AMBASSADOR SONDLUND ADMITTED HE PRESSURED UKRAINE TO INVESTIGATE THE BIDENS AT THE DIRECTION OF PRESIDENT TRUMP. Sondlund also stated that Guliani also stated to Ukraine that no aid would be forthcoming unless they conducted investigations into the 2016 election and the Bidens. 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 |
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Abbvie Inc. 4.25% 11/21/2049 144A Microsoft Corp. 2.375% 5/1/2023 IBM Corp. 2.85% 5/13/2022 |
Industry Returns Tracker |
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New Issues |
New Issues [Continued] |
|---|---|
| 1. MSCI Inc. (USD) 4% 11/15/2029 (11/19/2019): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4%.
2. First National Financial Corp. (CAD) 3.582% 11/25/2024 (11/19/2019): 200MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.58%. 3. Albermarle Corp. (USD) 3.45% 11/15/2029 144A (11/19/2019): 300MM Senior Unsecured Notes, Price at Issuance 99.716, Yielding 3.48%. |
Additional Commentary
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.
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 MR14) |
Ghana, Republic of (5Y Sen USD CR14) Road King Infrastructure LTD (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD MR14) |
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 11/20/19
- Net positive capital flows into high-yield ETFs & mutual funds
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