GLOBAL MARKETS LEAP UP FOR A SECOND DAY AS THE WORLD ANTICIPATE THAT THE DEMOCRATS WILL SWEEP THE PRESIDENCY AND BOTH HOUSES. WITH THAT VICTORY, THE MARKETS ANTICIPATE A HUGE STIMULUS BILL TO PASS. 10 Year Treasury notes were down 2 bps. S&P +2.06%, Dow +1.78%, NASDAQ +1.85%.
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Market Summaries
North American Bond Research – November 3, 2020
Posted on November 3, 2020|
HIGH YIELD BOND RESEARCH
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November 3, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 47.8 MILLION+ CASES AND 1.22 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 9.64 MILLION+ CASES AND 238000+ 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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CenterPoint Energy Inc. VAR% PERP General Motors Co. 6.25% 10/2/2043 Pacific Gas & Electric Co. 4.95% 7/1/2050 General Motors Financial Co. Inc. 4.375% 9/25/2021 Occidental Petroleum Corp. 2.9% 8/15/2024 Broadcom LTD 4.25% 4/15/2026 Antero Resources Corp. 5.625% 6/1/2023 Diamondback Energy Inc. 3.5% 12/1/2029 Cheniere Corpus Christi Hldgs LLC 5.875% 3/31/2025 Devon Energy Corp. 5.6% 7/15/2041 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Molina Healthcare Inc. (USD) 3.875% 11/15/2030 144A (11/02/2020): 650MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%.
2. Specialty Building Products Hldg LLC (USD) 6.375% 9/30/2026 (11/02/2020): 50MM Secured Notes, Price at Issuance 100.75, Yielding 6.22%. 3. Molina Healthcare Inc. (USD) 3.875% 11/15/2030 Reg S (11/02/2020): 650MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 4. Residential RE 2020 LTD (USD) FLT% 12/6/2024 (11/02/2020): 200MM Unsecured Notes, Price at Issuance 100. 5. Residential RE 2020 LTD (USD) 0% 12/6/2024 (11/02/2020): 50MM Unsecured Notes, Price at Issuance 74, Yielding 7.49%. 6. Residential RE 2020 LTD (USD) FLT% 12/6/2024 (11/02/2020): 150MM Unsecured Notes, Price at Issuance 100. |
1. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB
2. Amentum Holdings LLC: $980MM TL (B1/B) 3. Greystone Select Financial: $400MM TLB (Ba2/B+/BB-) 4. J.D. Power: $100MM incremental TL 5. Les Schwab Tire Centers: $1.575MM TLB (B2/B) 6. Motorcity: $275MM TLB (Ba3/BB) 7. Greystone Select Financial: $400MM TLB (Ba2/B+/BB-) 8. J.D. Power: $100MM incremental TL 9. Les Schwab Tire Centers: $1.575MM TLB (B2/B) 10. Motorcity: $275MM TLB (Ba3/BB) |
Additional Commentary
NEW ISSUANCE WATCH: Molina Healthcare Inc. Inc issued 650 MM Notes.
| Top Widening Loans | Top Narrowing Loans |
| Stubhub (USD) TLB L+350 02/13/2027 Distributed Power Inc. (USD) TLB L+325 11/02/2025 NEP NCP Holdco Inc. (USD) TL L+325 10/10/2025 Lucid Energy Group LLC (USD) TLB2 L+300 02/19/2025 Conduent Business Services LLC (USD) TLA L+175 12/07/2022 |
Stena International SA (USD) TLB L+300 03/03/2021 Promotora de Informaciones SA (EUR) TL3 E+400 12/31/2022 Compass IV LTD (EUR) TLB E+450 05/09/2025 Conduent Business Services LLC (USD) TLB L+250 12/07/2023 Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025 |
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 14 bps (basis points), as of 11/03/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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November 3, 2020
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Bond Markets
GLOBAL MARKETS SNAP BACK FROM LAST WEEKS LOSSES. OIL LED THE WAY AS OPEC AND RUSSIA ARE HOLDING OFF A PLANNED INCREASE IN CRUDE OUTPUT. 10 Year Treasury notes were down 2 bps. S&P +1.62%, Dow +1.23%, NASDAQ +0.42%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 47.8 MILLION+ CASES AND 1.22 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 9.64 MILLION+ CASES AND 238000+ 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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Boeing Co. 3.625% 2/1/2031 Shell Intl. Finance BV 3.25% 5/11/2025 General Electric Co. 4.35% 5/1/2050 Boeing Co. 5.93% 5/1/2060 Bank of America Corp. VAR% 10/24/2031 Comcast Corp. 3.4% 4/1/2030 Mondelez Intl Inc. 2.625% 9/4/2050 Lowe’s Companies Inc. 3% 10/15/2050 Boeing Co. 3.25% 2/1/2028 Boeing Co. 5.805% 5/1/2050 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
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(None Current 11/03/2020)
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Additional Commentary
NEW ISSUANCE WATCH: No New Issues.
| Top Widening Loans | Top Narrowing Loans |
| Stubhub (USD) TLB L+350 02/13/2027 Distributed Power Inc. (USD) TLB L+325 11/02/2025 NEP NCP Holdco Inc. (USD) TL L+325 10/10/2025 Lucid Energy Group LLC (USD) TLB2 L+300 02/19/2025 Conduent Business Services LLC (USD) TLA L+175 12/07/2022 |
Stena International SA (USD) TLB L+300 03/03/2021 Promotora de Informaciones SA (EUR) TL3 E+400 12/31/2022 Compass IV LTD (EUR) TLB E+450 05/09/2025 Conduent Business Services LLC (USD) TLB L+250 12/07/2023 Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025 |
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 14 bps (basis points), as of 11/03/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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