Grid IconAll Posts Market Summaries

North American Bond Research – November 26, 2019

Posted on November 26, 2019
HIGH YIELD BOND RESEARCH
November 26, 2019

Bond Markets


CHINA’S CHIEF NEGOTIATOR VOICED CAUTIOUS OPTIMISM THAT A DEAL COULD GET DONE. Markets were up slightly today. Talks will likely extend into 2020 as both sides hammer out the hardest issues. Fresh M&A activity also pushed stocks up as well. The 10-year note gained 0.2 basis points. S&P+0.22%, DOW +0.20%, NASDAQ +0.14%.
MOST OF THE MAJOR SOVEREIGN BOND CURVES STEEPEN TODAY BUT THE US CURVE DID THE OPPOSITE AND THE CURVE SHOWED AN INVERSION MOVEMENT.  Shorter duration bond yields were up slightly while longer duration bonds yields went down. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-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
+   Energen Corp. 4.625% 9/1/2021 + 0.1%
  TransDigm Group Inc. 5.5% 11/15/2027 144A + 0.2%
–   Teva Pharmaceuticals Fin BV 6.75% 3/1/2028 -1.1%
  Intelsat Luxembourg SA 8.125% 6/1/2023 -3.6%
  Teva Pharmaceutical Finance LLC 6.15% 2/1/2036 -0.4%
Centene Corp.   4.625% 12/15/2029 144A
Centene Corp.   4.25% 12/15/2027 144A
Diamond Sports Group, LLC   6.625% 8/15/2027 144A
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.04% -0.01% 0.05% 2.85% 16.86% 17.92%
Mining 0.15% -0.73% -0.92% -2.25% 4.73% 2.38%
Construction 0.17% 0.27% -0.02% 2.29% 15.18% 14.63%
Manufacturing 0.17% 0.22% 0.64% 2.15% 12.24% 11.48%
Transportion, Communication, Electric/Gas 0.17% 0.08% -0.33% 0.83% 13.44% 12.73%
Wholesale 0.08% 0.10% -0.25% 0.94% 11.67% 10.30%
Retail 0.14% -0.25% -0.62% 1.59% 14.43% 13.09%
Finance, Insurance, Real-Estate 0.13% 0.19% 0.45% 1.98% 13.87% 12.86%
Services 0.12% 0.13% 0.19% 2.11% 12.75% 11.99%
Public Administration 0.22% 0.32% 0.30% 1.26% 14.21% 16.33%
Energy 0.13% -0.66% -0.89% -2.23% 5.48% 3.45%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. Hess Midstream Partners LP (USD) 5.125% 6/15/2028 144A (11/25/2019): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%.

2. Hess Midstream Partners LP (USD) 5.125% 6/15/2028 Reg S (11/25/2019): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%.

1. Qmax Financial Holdings Inc.: $225MM, Expected 4th Quarter 2019

2. DDM Holding AG: ¬100MM, Expected Q4 2019

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.
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Hertz Corp. (5Y Sen USD CR14)
Hovnanian Enterprises Inc. (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 11/26/19
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
November 26, 2019

Bond Markets


CHINA’S CHIEF NEGOTIATOR VOICED CAUTIOUS OPTIMISM THAT A DEAL COULD GET DONE. Markets were up slightly today. Talks will likely extend into 2020 as both sides hammer out the hardest issues. Fresh M&A activity also pushed stocks up as well. The 10-year note gained 0.2 basis points. S&P +0.75%, DOW +0.68%, NASDAQ +1.32%.
MOST OF THE MAJOR SOVEREIGN BOND CURVES STEEPEN TODAY BUT THE US CURVE DID THE OPPOSITE AND THE CURVE SHOWED AN INVERSION MOVEMENT.  Shorter duration bond yields were UP slightly while longer duration bonds yields went down. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-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 + 0.7%
  GE Capital Intl. Funding Co. 2.342% 11/15/2020 + 0.0%
  Verizon Communications Inc. 4.672% 3/15/2055 (1) + 2.7%
–   Cardinal Health Inc. 3.41% 6/15/2027 -0.5%
  CVS Health Corp. 4.1% 3/25/2025 -0.2%
  PepsiCo. Inc. 3.125% 11/1/2020 -0.0%
Abbvie Inc.   4.25% 11/21/2049 144A
Abbvie Inc.   3.2% 11/21/2029 144A
Starbucks Corp.   2.2% 11/22/2020
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.11% 0.23% 0.54% 1.38% 6.21% 6.40%
Mining 0.17% 0.32% 0.36% -0.29% 12.15% 13.83%
Construction 0.09% 0.52% 0.66% 0.42% 10.16% 11.22%
Manufacturing 0.12% 0.34% 0.69% 0.31% 11.18% 12.38%
Transportion, Communication, Electric/Gas 0.15% 0.53% 0.70% -0.02% 14.15% 16.23%
Wholesale 0.11% 0.27% 0.70% 0.96% 12.77% 13.40%
Retail 0.14% 0.37% 0.50% 0.09% 12.80% 14.11%
Finance, Insurance, Real-Estate 0.07% 0.21% 0.53% 0.43% 9.71% 10.98%
Services 0.09% 0.27% 0.42% 0.13% 11.07% 12.55%
Public Administration 0.02% 0.04% 0.14% -0.11% 4.62% 6.05%
Energy 0.15% 0.31% 0.37% -0.33% 12.36% 14.04%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Macquarie Bank LTD (USD) FLT% 11/24/2021 144A (11/25/2019): 200MM Senior Unsecured Notes, Price at Issuance 100.

2. DNB Bank ASA (USD) FLT% 12/2/2022 144A (11/25/2019): 600MM Senior Unsecured Notes, Price at Issuance 100.

3. DNB Bank ASA (USD) FLT% 12/2/2022 Reg S (11/25/2019): 600MM Senior Unsecured Notes, Price at Issuance 100.

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.
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)

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 11/26/19
  • Net positive capital flows into high-yield ETFs & mutual funds

Copyright 2019 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

 


Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 6,200+ CDS reference entities
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 16 products and services from debt to CDS to loans to mid-market
  • Used by top buy and sell-side firms worldwide

Share

facebook share icon twitter share icon linkedin share icon
Ready to get Started? Free Trial