GLOBAL MARKETS WERE MOSTLY UP AS FEWER PEOPLE FILED FOR UNEMPLOYMENT(836K), THERE IS PROGRESS ON MORE STIMULUS, AND ADVANCEMENTS ARE BEING MADE TOWARDS A VACCINE. 10 Year Treasury notes were up 0 bps. S&P +0.53%, Dow +0.13%, NASDAQ +1.42%.
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Market Summaries
North American Bond Research – October 1, 2020
Posted on October 1, 2020|
HIGH YIELD BOND RESEARCH
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October 1, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 34.5 MILLION+ CASES AND 1.022 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 7.5 MILLION+ CASES AND 213000+ 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. 4.95% 7/1/2050 BED Bath & Beyond Inc. 5.165% 8/1/2044 T-Mobile USA Inc. 3.75% 4/15/2027 144A Aircastle LTD 4.125% 5/1/2024 Occidental Petroleum Corp. 2.9% 8/15/2024 Petrobras Global Finance BV 6.85% 6/5/2115 Centene Corp. 3% 10/15/2030 Pacific Gas & Electric Co. 4.3% 3/15/2045 WPX Energy Inc. 4.5% 1/15/2030 Pacific Gas & Electric Co. 4.55% 7/1/2030 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. OCI NV (USD) 4.625% 10/15/2025 144A (09/30/2020): 400MM Secured Notes, Price at Issuance 100, Yielding 4.63%.
2. Allegiant Travel Co. (USD) 8.5% 2/5/2024 Reg S (09/30/2020): 150MM First Lien Notes, Price at Issuance 100, Yielding 8.5%. 3. Encompass Health Corp. (USD) 4.625% 4/1/2031 (09/30/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%. 4. Lithia Motors Inc. (USD) 4.375% 1/15/2031 144A (09/30/2020): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.38%. 5. Lithia Motors Inc. (USD) 4.375% 1/15/2031 Reg S (09/30/2020): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.38%. |
1. Alera Group: $300MM TLB (B2)
2. American Residential Services: $470MM TLB (B1/B) 3. Array Residential Services: $575MM TLB (B1/B+) 4. Wheelabrator Technologies Inc.: $1.3965B TLB 5. Pae Holding Corp.: $890MM TLB (B2/B) 6. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB 7. Global Medical Response: $1.5B TL (B1/B) 8. Array Residential Services: $575MM TLB (B1/B+) 9. American Residential Services: $470MM TLB (B1/B) 10. Global Medical Response: $1.5B TL (B1/B) |
Additional Commentary
NEW ISSUANCE WATCH: OCI NV issued 400MM of Notes.
| Top Widening Loans | Top Narrowing Loans |
| Nets Hldgs AS (NOK) TLB1N L+400 02/06/2025 SSH Group Hldg Inc. (USD) TL2 L+825 07/30/2026 Pro Mach Group Inc. (USD) DD L+350 03/07/2025 Excelitas Technologies Corp. (EUR) TL E+350 12/04/2024 Arvos Holding (EUR) TLB2 E+450 08/29/2021 |
NCL Corp. LTD (USD) TLA L+150 01/02/2024 Deoleo SA (EUR) TL 06/24/2026 Ameriforge Group Inc. (USD) L+800 06/01/2022 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 Tecomet Inc. (USD) TL L+350 05/01/2024 |
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 14 bp (basis points), as of 10/01/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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October 1, 2020
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Bond Markets
GLOBAL MARKETS WERE MOSTLY UP AS FEWER PEOPLE FILED FOR UNEMPLOYMENT(836K), THERE IS PROGRESS ON MORE STIMULUS, AND ADVANCEMENTS ARE BEING MADE TOWARDS A VACCINE. 10 Year Treasury notes were up 0 bps. S&P +0.53%, Dow +0.13%, NASDAQ +1.42%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 34.5 MILLION+ CASES AND 1.022 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 7.5 MILLION+ CASES AND 213000+ 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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Gilead Sciences Inc. 2.8% 10/1/2050 Gilead Sciences Inc. 2.6% 10/1/2040 Mondelez Intl Inc. 2.625% 9/4/2050 Simon Property Group Inc. 2.65% 7/15/2030 B.A.T. Capital Corp. 2.726% 3/25/2031 Suzano Austria GmbH 3.75% 1/15/2031 Credit Suisse Group AG VAR% 4/1/2031 Reg S B.A.T. Capital Corp. 3.984% 9/25/2050 Boeing Co. 5.15% 5/1/2030 Enterprise Products Operating LLC 3.2% 2/15/2052 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Orlando Health Obligated Grp. (USD) 3.477% 10/1/2042 (09/30/2020): 128MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.48%.
2. Orlando Health Obligated Grp. (USD) 3.327% 10/1/2050 (09/30/2020): 317MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.33%. 3. Veritext Holding Co. (USD) VAR% 10/15/2030 (09/30/2020): 125MM Subordinated Notes, Price at Issuance 100. 4. Mondelez International Inc. (USD) 1.875% 10/15/2032 (09/30/2020): 625MM Senior Unsecured Notes, Price at Issuance 99.765, Yielding 1.9%. 5. Jefferies Group Inc. (USD) 2.75% 10/15/2032 (09/30/2020): 500MM Senior Unsecured Notes, Price at Issuance 98.968, Yielding 2.85%. 6. Toronto Hydro Corp. (CAD) 1.5% 10/15/2030 (09/30/2020): 200MM Senior Unsecured Notes, Price at Issuance 99.843, Yielding 1.52%. |
Additional Commentary
NEW ISSUANCE WATCH: Orlando Health Obligated Grp. issued 128MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Nets Hldgs AS (NOK) TLB1N L+400 02/06/2025 SSH Group Hldg Inc. (USD) TL2 L+825 07/30/2026 Pro Mach Group Inc. (USD) DD L+350 03/07/2025 Excelitas Technologies Corp. (EUR) TL E+350 12/04/2024 Arvos Holding (EUR) TLB2 E+450 08/29/2021 |
NCL Corp. LTD (USD) TLA L+150 01/02/2024 Deoleo SA (EUR) TL 06/24/2026 Ameriforge Group Inc. (USD) L+800 06/01/2022 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 Tecomet Inc. (USD) TL L+350 05/01/2024 |
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 14bp (basis points), as of 10/01/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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