EUROPEAN MARKETS WERE HIGHER AS PROGRESS IS BEING MADE TO TAME THE VIRUS. US MARKETS FELL AS TREASURY SECRETARY MNUCHIN UNEXPECTEDLY DEMANDED UNUSED PPP MONEY BACK FROM THE FED. 10 Year Treasury notes were down 2.5 bps. S&P -0.68%, Dow -0.75%, NASDAQ -0.42%.
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Market Summaries
North American Bond Research – November 20, 2020
Posted on November 20, 2020|
HIGH YIELD BOND RESEARCH
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November 20, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 58 MILLION+ CASES AND 1.38 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 12.3 MILLION+ CASES AND 260000+ 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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Pacific Gas & Electric Co. 4.55% 7/1/2030 Pacific Gas & Electric Co. 4.95% 7/1/2050 Vale Overseas LTD 6.25% 8/10/2026 PG&E Corp. 5.25% 7/1/2030 MGM Resorts Intl 6% 3/15/2023 Ball Corp. 2.875% 8/15/2030 Broadcom LTD 3.459% 9/15/2026 L Brands Inc. 6.875% 11/1/2035 Chubb INA Hldgs Inc. 1.375% 9/15/2030 PBF Hldg Co. LLC 7.25% 6/15/2025 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. AES Corp. (USD) 1.375% 1/15/2026 144A (11/19/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.945, Yielding 1.39%.
2. Sinclair Television Group Inc. (USD) 4.125% 12/1/2030 144A (11/19/2020): 750MM Secured Notes, Price at Issuance 100, Yielding 4.13%. 3. Sinclair Television Group Inc. (USD) 4.125% 12/1/2030 Reg S (11/19/2020): 750MM Secured Notes, Price at Issuance 100, Yielding 4.13%. 4. Frontier Communications Corp. (USD) 5% 5/1/2028 Reg S (11/19/2020): 1550MM First Lien Notes, Price at Issuance 100, Yielding 5%. 5. Frontier Communications Corp. (USD) 6.75% 5/1/2029 Reg S (11/19/2020): 1000MM Second Lien Notes, Price at Issuance 100, Yielding 6.75%. 6. AES Corp. (USD) 2.45% 1/15/2031 144A (11/19/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.962, Yielding 2.45%. 7. AES Corp. (USD) 2.45% 1/15/2031 Reg S (11/19/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.962, Yielding 2.45%. 8. AES Corp. (USD) 1.375% 1/15/2026 Reg S (11/19/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.945, Yielding 1.39%. 9. MPT Operating Partnership LP (USD) 3.5% 3/15/2031 (11/19/2020): 1300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.5%. 10. Frontier Communications Corp. (USD) 5% 5/1/2028 144A (11/19/2020): 1550MM First Lien Notes, Price at Issuance 100, Yielding 5%. |
1. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB
2. Astoria Energy LLC: $800MM TLB (Ba3) 3. Railworks: $280MM credit facilities: $230MM TLB; $50MM revolver 4. American Public Education Inc.: $195MM credit facilities: $20MM revolver; $175MM TLB 5. Amentum Holdings LLC: $980MM TL (B1/B) 6. Smartbear: $565MM credit facilities: $50MM revolver (B2/B-); $385MM TL (B2/B-); $130MM TL 7. Potters Industries LLC: $465MM credit facilities: $75MM revolver; $390MM TL 8. Railworks: $280MM credit facilities: $230MM TLB; $50MM revolver 9. Smartbear: $565MM credit facilities: $50MM revolver (B2/B-); $385MM TL (B2/B-); $130MM TL 10. Amentum Holdings LLC: $980MM TL (B1/B) |
Additional Commentary
NEW ISSUANCE WATCH: Sinclair Television Group Inc.issued 750mm notes.
| Top Widening Loans | Top Narrowing Loans |
| Jo-Ann Stores Inc. (USD) TL2 L+925 05/02/2024 nThrive Inc. (USD) TLB L+450 10/20/2022 GGP Inc. (USD) TLA2 L+250 08/24/2023 GGP Inc. (USD) TLB L+250 08/24/2025 Neovia Logistics International Holdings (USD) TL L+650 05/08/2024 |
Parques Reunidos (EUR) RC 09/27/2026 Compass IV LTD (EUR) TL E+800 05/09/2026 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 CSM Bakery (USD) TL L+1000 02/04/2022 Goodpack LTD (USD) TL L+700 09/09/2024 |
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 16 bps (basis points), as of 11/20/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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November 20, 2020
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Bond Markets
EUROPEAN MARKETS WERE HIGHER AS PROGRESS IS BEING MADE TO TAME THE VIRUS. US MARKETS FELL AS TREASURY SECRETARY MNUCHIN UNEXPECTEDLY DEMANDED UNUSED PPP MONEY BACK FROM THE FED. 10 Year Treasury notes were down 2.5 bps. S&P -0.68%, Dow -0.75%, NASDAQ -0.42%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 58 MILLION+ CASES AND 1.38 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 12.3 MILLION+ CASES AND 260000+ 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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JPMorgan Chase & Co. VAR% 11/19/2031 Morgan Stanley VAR% 2/13/2032 Verizon Communications Inc. 3% 11/20/2060 Eastman Chemical Co. 3.6% 8/15/2022 Deutsche Bank AG of New York VAR% 11/24/2026 AT&T Inc. 4.125% 2/17/2026 Charter Communications Operating LLC 3.7% 4/1/2051 Pacific Gas & Electric Co. 4.55% 7/1/2030 Conagra Brands Inc. 4.6% 11/1/2025 AT&T Inc. 3.3% 2/1/2052 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. AES Corp. (USD) 1.375% 1/15/2026 144A (11/19/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.945, Yielding 1.39%.
2. Charter Communications Operating LLC (USD) 2.3% 2/1/2032 (11/19/2020): 1000MM Secured Notes, Price at Issuance 99.786, Yielding 2.32%. 3. Charter Communications Operating LLC (USD) 3.85% 4/1/2061 (11/19/2020): 1350MM Secured Notes, Price at Issuance 99.882, Yielding 3.86%. 4. Goldman Sachs BDC Inc. (USD) 2.875% 1/15/2026 (11/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.717, Yielding 2.93%. 5. Massachusetts Electric Co. (USD) 1.729% 11/24/2030 144A (11/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.73%. 6. AES Corp. (USD) 2.45% 1/15/2031 144A (11/19/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.962, Yielding 2.45%. 7. Massachusetts Electric Co. (USD) 1.729% 11/24/2030 Reg S (11/19/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.73%. 8. Presidio Hldg Inc. (USD) 4.875% 2/1/2027 (11/19/2020): 125MM First Lien Notes, Price at Issuance 104, Yielding 4.14%. 9. AES Corp. (USD) 2.45% 1/15/2031 Reg S (11/19/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.962, Yielding 2.45%. 10. AES Corp. (USD) 1.375% 1/15/2026 Reg S (11/19/2020): 800MM Senior Unsecured Notes, Price at Issuance 99.945, Yielding 1.39%. |
Additional Commentary
NEW ISSUANCE WATCH: AES Corp. sold $1800MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Jo-Ann Stores Inc. (USD) TL2 L+925 05/02/2024 nThrive Inc. (USD) TLB L+450 10/20/2022 GGP Inc. (USD) TLA2 L+250 08/24/2023 GGP Inc. (USD) TLB L+250 08/24/2025 |
Parques Reunidos (EUR) RC 09/27/2026 Compass IV LTD (EUR) TL E+800 05/09/2026 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 CSM Bakery (USD) TL L+1000 02/04/2022 Goodpack LTD (USD) TL L+700 09/09/2024 |
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 16 bps (basis points), as of 11/20/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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