
North American Bond Research – November 21, 2019
Posted on November 21, 2019
HIGH YIELD BOND RESEARCH
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November 21, 2019
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Bond Markets
Key Gainers and Losers | Volume Leaders | ||||||||||||||||||
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Intelsat Jackson Hldg SA 8.5% 10/15/2024 144A Quad Graphics Inc. 7% 5/1/2022 Hertz Corp. 6% 1/15/2028 144A |
Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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New Issues | Forward Calendar |
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1. Diamondback Energy Inc. (USD) 2.875% 12/1/2024 (11/20/2019): 1000MM Senior Unsecured Notes, Price at Issuance 99.959, Yielding 2.88%.
2. Mattamy Group (USD) 5.25% 12/15/2027 144A (11/20/2019): 450MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.25%. 3. Gates Global LLC (USD) 6.25% 1/15/2026 144A (11/20/2019): 568MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.25%. |
1. Qmax Financial Holdings Inc.: $225MM, Expected 4th Quarter 2019
2. Diamondback Energy Inc.: High-yield notes, Expected Q4 2019 3. Presidio Inc.: $1.775B high yield bonds, Expected 4th Quarter 2019 |
Additional Commentary
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 MR14) Hovnanian Enterprises Inc. (5Y Sen USD MR14) |
Ghana, Republic of (5Y Sen USD CR14) Road King Infrastructure LTD (5Y Sen USD CR14) Cable & Wireless Communication (5Y Sen USD CR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
- 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 11/21/19
- Net negative capital flows into high-yield ETFs & mutual funds
INVESTMENT GRADE BOND RESEARCH
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November 21, 2019
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Bond Markets
Key Gainers and Losers | Volume Leaders | ||||||||||||||||||
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CVS Health Corp. 5.05% 3/25/2048 Abbvie Inc. 4.05% 11/21/2039 144A Halliburton Co. 5% 11/15/2045 |
Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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New Issues | New Issues [Continued] |
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1. Raza Development Fund, Inc. (USD) 3.534% 7/1/2034 (11/20/2019): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.53%.
2. Diamondback Energy Inc. (USD) 3.25% 12/1/2026 (11/20/2019): 800MM Senior Unsecured Notes, Price at Issuance 99.858, Yielding 3.27%. 3. California Institute of Technology (USD) 3.65% 9/1/2119 (11/20/2019): 500MM Senior Unsecured Notes, Price at Issuance 99.747, Yielding 3.66%. |
Additional Commentary
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 CR14) Cable & Wireless Communication (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 11/21/19
- Net positive capital flows into high-yield ETFs & mutual funds
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