North American Bond Research – November 8, 2019

CHINA DEFAULT RATE SKYROCKETED AS CHINA DECIDED TO ALLOW DEFAULTS INSTEAD OF BAILING OUT “DEAD” COMPANIES. Local governments are incapable of supporting and bailing out local businesses. The 10-year note fell .7 basis points. S&P +0.26%, DOW +0.02%, NASDAQ +0.48%

Key Gainers and Losers	Volume Leaders
+   Panther BF Aggregator 2 LP Panther Finance Co. Inc. 8.5% 5/15/2027 + 0.1%   Goldman Sachs Group Inc. 5% PERP + 1.5%   Chesapeake Energy Corp. 8% 1/15/2025 + 6.7% –   Party City Hldgs Inc. 6.625% 8/1/2026 144A -13.6%   Windstream Services LLC 8.625% 10/31/2025 144A -4.4%   Berry Global Inc. 5.625% 7/15/2027 144A -0.6%	Albertsons Companies Inc.   4.625% 1/15/2027 144A Party City Hldgs Inc.   6.625% 8/1/2026 144A Steel Dynamics   5.125% 10/1/2021

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.10% 0.19% 0.79% 3.85% 17.21% 15.89% Mining 0.03% 0.74% -0.03% -0.29% 5.59% 0.45% Construction -0.05% -0.20% 0.75% 3.12% 14.92% 13.42% Manufacturing -0.03% 0.10% 1.13% 2.61% 11.57% 9.33% Transportion, Communication, Electric/Gas -0.09% -0.01% 0.12% 1.97% 12.96% 9.89% Wholesale -0.10% -0.26% 0.28% 1.48% 11.81% 8.73% Retail -0.01% 0.06% 1.09% 2.95% 15.38% 11.95% Finance, Insurance, Real-Estate -0.09% -0.06% 0.78% 2.38% 13.56% 10.87% Services 0.01% 0.12% 0.92% 2.88% 12.44% 10.28% Public Administration -0.38% -0.07% 0.67% 1.74% 13.62% 15.32% Energy -0.12% 0.56% -0.52% -0.42% 5.95% 1.23%   Total returns (non-annualized) by rating, market weighted.

New Issues	Forward Calendar
1. Albertsons Companies Inc. (USD) 4.625% 1/15/2027 Reg S (11/07/2019): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%. 2. CIT Group Inc. (USD) VAR% 11/13/2029 (11/07/2019): 100MM Subordinated Notes, Price at Issuance 100.	1. Qmax Financial Holdings Inc.: $225MM, Expected 4th Quarter 2019 2. Presidio Inc.: $1.775B high yield bonds, Expected 4th Quarter 2019

NEW ISSUANCE WATCH: on 11/05/19 participants welcome a $500MM new corporate-bond offering by
MSCI Inc. The most recent data showed a money flowed out of ETF/mutual funds for the week ended 11/01/2019, with a net inflow of $940 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) Controladora Mabe SA de CV (5Y Sen USD CR14)	Ghana, Republic of (5Y Sen USD CR14) Export Credit Bank of Turkey (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD XR14)

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 36 bp (basis points), as of 11/07/19
• Net positive capital flows into high-yield ETFs & mutual funds

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CHINA DEFAULT RATE SKYROCKETED AS CHINA DECIDED TO ALLOW DEFAULTS INSTEAD OF BAILING OUT “DEAD” COMPANIES. Local governments are incapable of supporting and bailing out local businesses. The 10-year note fell .7 basis points. S&P +0.26%, DOW +0.02%, NASDAQ +0.48%

STOCKS were mixed. Bond yields were higher by and large. Trump saga continues as more testimony suggests Quid Pro Quo. 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, Pacific Gas & Electric Co. (USD) 3.85% 11/15/2023 made analysts’ ‘Conviction Buy’ list. (See the chart below for Pacific Gas & Electric Co bonds) Pierre Robert

Key Gainers and Losers	Volume Leaders
+   Ingersoll-Rand Co. LTD 3.8% 3/21/2029 + 0.1%   Emera US Finance LP 2.7% 6/15/2021 + 0.0% –   CVS Health Corp. 5.05% 3/25/2048 -0.7%   CVS Health Corp. 4.78% 3/25/2038 -0.6%	CVS Health Corp.   5.05% 3/25/2048 Dowdupont Inc.   5.419% 11/15/2048

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.08% -0.15% -0.08% 0.50% 5.70% 6.45% Mining -0.47% -0.92% -0.98% 0.32% 11.01% 11.63% Construction -0.45% -0.92% -1.20% -0.03% 9.52% 10.79% Manufacturing -0.42% -0.88% -0.86% 0.79% 10.65% 11.64% Transportion, Communication, Electric/Gas -0.49% -1.11% -1.27% 0.36% 13.28% 15.10% Wholesale -0.36% -0.73% -0.43% 1.37% 12.63% 12.65% Retail -0.45% -1.14% -1.05% 0.75% 11.58% 12.99% Finance, Insurance, Real-Estate -0.31% -0.57% -0.46% 0.81% 9.18% 10.46% Services -0.41% -0.89% -0.99% 0.82% 10.33% 11.86% Public Administration -0.22% -0.56% -0.54% 0.20% 4.30% 6.32% Energy -0.49% -0.98% -1.06% 0.20% 11.45% 11.98%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. Patterson-Uti Energy Inc. (USD) 5.15% 11/15/2029 (11/07/2019): 99MM Senior Unsecured Notes, Price at Issuance 99.784, Yielding 5.18%. 2. Cards II TR (CAD) 2.427% 11/15/2024 (11/08/2019): 750MM Secured Notes, Price at Issuance 100, Yielding 2.43%.

NEW ISSUANCE WATCH: on 11/05/19 participants welcome a $500MM new corporate-bond offering by
Xcel Energy Inc.The most recent data showed a money flowed out of ETF/mutual funds for the week ended 11/01/2019, with a net inflow of $940 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) Hovnanian Enterprises Inc. (5Y Sen USD MR14)	Ghana, Republic of (5Y Sen USD CR14) Export Credit Bank of Turkey (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD XR14)

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 36 bp (basis points), as of 11/07/19
• Net positive capital flows into high-yield ETFs & mutual funds

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