GLOBAL MARKETS DOWN AGAIN AS COVID CASES SURGE IN BOTH THE US AND EUROPE. STIMULUS TALKS ARE STALLED AS REPUBLICANS FOCUS ON CONFIRMING A NEW JUSTICE. 10 Year Treasury notes were down .5 bps. S&P -0.66%, Dow -0.58%, NASDAQ -0.80%.
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Market Summaries
North American Bond Research – October 14, 2020
Posted on October 14, 2020|
HIGH YIELD BOND RESEARCH
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October 14, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 38.6 MILLION+ CASES AND 1.1 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.14 MILLION+ CASES AND 222000+ 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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Vale Overseas LTD 3.75% 7/8/2030 T-Mobile USA Inc. 3.75% 4/15/2027 144A BAC Cap Trust X 5.63% 3/15/2043 Petrobras Global Finance BV 8.75% 5/23/2026 BED Bath & Beyond Inc. 5.165% 8/1/2044 MGM Resorts Intl 4.75% 10/15/2028 Broadcom LTD 4.75% 4/15/2029 Occidental Petroleum Corp. 3.4% 4/15/2026 Cheniere Corpus Christi Hldgs LLC 5.875% 3/31/2025 Transocean Inc. 6.5% 11/15/2020 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Russel Metals (CAD) 5.75% 10/27/2025 (10/13/2020): 150MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%. | 1. Mega Broadband Investments Holdings LLC: $725MM credit facilities: $75MM revolver; $650MM TLB
2. Pae Holding Corp.: $890MM TLB (B2/B) 3. Quirch Foods LLC: $675MM credit facilities: $475MM TLB; $200MM revolver 4. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB 5. Virtusa Corp.: $725MM credit facilities: $125MM revolver; $600MM TL 6. Adevinta: $500MM TLB (BB-/BB+) 7. Maravai Lifesciences: $750MM credit facilities: $150MM revolver; $600MM TLB 8. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB 9. Quirch Foods LLC: $675MM credit facilities: $475MM TLB; $200MM revolver 10. Pae Holding Corp.: $890MM TLB (B2/B) |
Additional Commentary
NEW ISSUANCE WATCH: Russel Metals issued 150MM
| Top Widening Loans | Top Narrowing Loans |
| Unifrax Corp. (USD) TL2 L+850 12/14/2026 Affinity Gaming LLC (USD) TL L+825 02/01/2025 Oxea GmbH (USD) TL L+350 09/29/2024 One Call Medical Inc. (USD) TL L+400 11/27/2020 Conduent Business Services LLC (USD) TLA L+175 12/07/2022 |
Akorn Inc. (USD) TL L+1250 04/16/2021 Owens & Minor Inc. (USD) TLA2 L+350 07/27/2022 Tacala LLC (USD) TLB L+350 02/05/2027 CSM Bakery (USD) TL L+1000 02/04/2022 MMM Holdings Inc. (USD) RC 11/01/2024 |
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 15 bps (basis points), as of 10/14/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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October 14, 2020
|
Bond Markets
GLOBAL MARKETS DOWN AGAIN AS COVID CASES SURGE IN BOTH THE US AND EUROPE. STIMULUS TALKS ARE STALLED AS REPUBLICANS FOCUS ON CONFIRMING A NEW JUSTICE. 10 Year Treasury notes were down .5 bps. S&P -0.66%, Dow -0.58%, NASDAQ -0.80%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 38.6 MILLION+ CASES AND 1.1 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.14 MILLION+ CASES AND 222000+ 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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Concho Resources Inc. 4.85% 8/15/2048 Concho Resources Inc. 2.4% 2/15/2031 Lowe’s Companies Inc. 3% 10/15/2050 AerCap Ireland Capital LTD 4.625% 10/15/2027 Exxon Mobil Corp. 2.61% 10/15/2030 Suzano Austria GmbH 6% 1/15/2029 Steel Dynamics 3.25% 10/15/2050 CVS Health Corp. 5.05% 3/25/2048 Mizuho Financial Group Inc. 2.601% 9/11/2022 Boeing Co. 5.15% 5/1/2030 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Athene Global Funding (USD) 1.2% 10/13/2023 144A (10/13/2020): 600MM Secured Notes, Price at Issuance 99.971, Yielding 1.21%.
2. Toyota Motor Credit Corp. (USD) 0.35% 10/14/2022 (10/13/2020): 1150MM Senior Unsecured Notes, Price at Issuance 99.911, Yielding .39%. 3. Toyota Motor Credit Corp. (USD) 0.8% 10/16/2025 (10/13/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.834, Yielding .83%. 4. Toyota Motor Credit Corp. (USD) FLT% 10/14/2022 (10/13/2020): 600MM Senior Unsecured Notes, Price at Issuance 100. 5. Komatsu Finance America Inc. (USD) 0.74% 10/23/2023 (10/14/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding .74%. |
Additional Commentary
NEW ISSUANCE WATCH: Athene Global Funding issued 600MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Unifrax Corp. (USD) TL2 L+850 12/14/2026 Affinity Gaming LLC (USD) TL L+825 02/01/2025 Oxea GmbH (USD) TL L+350 09/29/2024 One Call Medical Inc. (USD) TL L+400 11/27/2020 Conduent Business Services LLC (USD) TLA L+175 12/07/2022 |
Akorn Inc. (USD) TL L+1250 04/16/2021 Owens & Minor Inc. (USD) TLA2 L+350 07/27/2022 Tacala LLC (USD) TLB L+350 02/05/2027 CSM Bakery (USD) TL L+1000 02/04/2022 MMM Holdings Inc. (USD) RC 11/01/2024 |
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 15 bps (basis points), as of 10/14/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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