Grid IconAll Posts Market Summaries

North American Bond Research – October 15, 2020

Posted on October 15, 2020
HIGH YIELD BOND RESEARCH
October 15, 2020
Bond Markets

GLOBAL MARKETS DOWN AGAIN AS BAD UNEMPLOYMENT NUMBERS, COVID CASES SURGING AND STIMULUS TALKS GOING NOWHERE. 10 Year Treasury notes were up .9 bps. S&P -0.15%, Dow -0.07%, NASDAQ -0.47%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 39.1 MILLION+ CASES AND 1.1 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.2 MILLION+ CASES AND 223000+ 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
+   Central Garden & Pet Co. 4.125% 10/15/2030 +0.2%
  Aircastle LTD 4.125% 5/1/2024 +0.6%
  T-Mobile USA Inc. 3.75% 4/15/2027 144A +0.0%
  Ally Financial Inc. 4.125% 2/13/2022 +0.1%
  HCA Inc. 4.75% 5/1/2023 +0.1%
–   Micron Technology Inc. 4.663% 2/15/2030 -0.1%
  T-Mobile USA Inc. 3.875% 4/15/2030 144A -0.1%
  Broadcom LTD 4.75% 4/15/2029 -1.5%
  Pacific Gas & Electric Co. 3.3% 12/1/2027 -0.2%
  Sally Hldg LLC 5.625% 12/1/2025 -1.2%
Vale Overseas LTD   3.75% 7/8/2030
Micron Technology Inc.   4.663% 2/15/2030
Central Garden & Pet Co.   4.125% 10/15/2030
T-Mobile USA Inc.   3.875% 4/15/2030 144A
Broadcom LTD   4.75% 4/15/2029
Pacific Gas & Electric Co.   3.3% 12/1/2027
Sally Hldg LLC   5.625% 12/1/2025
Continental Resources Inc.   4.375% 1/15/2028
Western Digital Corp.   4.75% 2/15/2026
Steel Dynamics   1.65% 10/15/2027
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.01% 0.34% 0.43% 3.63% 5.77% 7.84%
Mining -0.02% 0.76% 73.15% 189.04% -9.04% -5.12%
Construction -0.02% 0.64% 1.64% 6.72% 7.00% 8.75%
Manufacturing -0.05% 0.67% 1.29% 5.02% 3.43% 7.49%
Transportion, Communication, Electric/Gas -0.06% 0.52% 0.17% 3.17% 4.16% 6.09%
Wholesale -0.11% 0.42% 0.38% 2.95% 2.18% 5.00%
Retail -0.08% 0.74% 0.83% 6.59% 3.14% 5.72%
Finance, Insurance, Real-Estate -0.03% 0.45% 0.68% 5.33% 2.80% 5.65%
Services -0.07% 0.42% 0.35% 5.30% 2.87% 5.67%
Public Administration 0.11% 1.14% 0.55% 6.77% 8.44% 11.10%
Energy -0.00% 0.88% 63.49% 165.46% -8.09% -4.23%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. New Home Co Inc (USD) 7.25% 10/15/2025 144A (10/14/2020): 250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7.25%.

2. Rolls Royce PLC (USD) 5.75% 10/15/2027 144A (10/14/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%.

3. Fidelis Insur HLD LTD (USD) VAR% 4/1/2041 144A (10/14/2020): 105MM Junior Subordinated Notes, Price at Issuance 100.

4. Freedom Mortgage Corp. (USD) 7.625% 5/1/2026 144A (10/14/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7.63%.

5. New Home Co Inc (USD) 7.25% 10/15/2025 Reg S (10/14/2020): 250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7.25%.

6. Rolls Royce PLC (USD) 5.75% 10/15/2027 Reg S (10/14/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%.

7. Fidelis Insur HLD LTD (USD) VAR% 4/1/2041 Reg S (10/14/2020): 105MM Junior Subordinated Notes, Price at Issuance 100.

8. Pennymac Financial Services Inc. (USD) 5.375% 10/15/2025 (10/14/2020): 150MM Senior Unsecured Notes, Price at Issuance 103, Yielding 4.69%.

9. Freedom Mortgage Corp. (USD) 7.625% 5/1/2026 Reg S (10/14/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7.63%.

10. XHR LP (USD) 6.375% 8/15/2025 (10/15/2020): 200MM Secured Notes, Price at Issuance 100.25, Yielding 6.31%.

1. Virtusa Corp.: $725MM credit facilities: $125MM revolver; $600MM TL

2. Weber-Stephen Products LLC: $1.5B credit facilities: $300MM revolver; $1.2MM TLB

3. Adevinta: $500MM TLB (BB-/BB+)

4. Maravai Lifesciences: $780MM credit facilities: $180MM revolver; $600MM TLB

5. Mega Broadband Investments Holdings LLC: $725MM credit facilities: $75MM revolver; $650MM TLB

6. Quirch Foods LLC: $675MM credit facilities: $475MM TLB; $200MM revolver

7. Veregy: $342.5MM credit facilities: $42.5MM revolver; $250MM TL; $50MM DD TL

8. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB

9. Virtusa Corp.: $725MM credit facilities: $125MM revolver; $600MM TL

10. Adevinta: $500MM TLB (BB-/BB+)

Additional Commentary

NEW ISSUANCE WATCH:   New Home Co Inc issued 250MM
Top Widening Loans Top Narrowing Loans
Unifrax Corp. (USD) TL2 L+850 12/14/2026
Assystem (EUR) TLB E+425 09/28/2024
Archroma Global Services (USD) TLB2 L+425 07/11/2024
SSH Group Hldg Inc. (USD) TL2 L+825 07/30/2026
Mavenir Inc. (USD) TLB L+600 05/08/2025
Ball Corp. (USD) TLA L+150 03/21/2024
Imagina Media Audiovisual SL (EUR) TLA E+400 06/22/2025
Carrols Restaurant Group (USD) TLB1 L+625 04/30/2026
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026
Dubois Chemicals Inc. (USD) TL L+450 09/30/2026

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 14bps (basis points), as of 10/15/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
October 15, 2020
Bond Markets

GLOBAL MARKETS DOWN AGAIN AS BAD UNEMPLOYMENT NUMBERS, COVID CASES SURGING AND STIMULUS TALKS GOING NO WHERE. 10 Year Treasury notes were up .9 bps. S&P -0.15%, Dow -0.07%, NASDAQ -0.47%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 39.1 MILLION+ CASES AND 1.1 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.2 MILLION+ CASES AND 223000+ 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
+   Johnson & Johnson 1.3% 9/1/2030 +0.4%
  Lowe’s Companies Inc. 1.7% 10/15/2030 +0.1%
  Morgan Stanley 2.75% 5/19/2022 +0.0%
  JPMorgan Chase & Co. 2.522% 4/22/2031 +0.3%
  AT&T Inc. 3.1% 2/1/2043 +1.6%
–   CVS Health Corp. 4.3% 3/25/2028 -0.5%
  Bank of America Corp. 1.898% 7/23/2031 -0.3%
  Wells Fargo & Co. VAR% 2/11/2031 -0.1%
  Microsoft Corp. 2.525% 6/1/2050 -0.7%
  Oracle Corp. 3.6% 4/1/2050 -0.2%
CVS Health Corp.   4.3% 3/25/2028
Johnson & Johnson   1.3% 9/1/2030
Bank of America Corp.   1.898% 7/23/2031
Wells Fargo & Co.   VAR% 2/11/2031
Microsoft Corp.   2.525% 6/1/2050
Oracle Corp.   3.6% 4/1/2050
Lowe’s Companies Inc.   1.3% 4/15/2028
Lowe’s Companies Inc.   1.7% 10/15/2030
Morgan Stanley   2.75% 5/19/2022
Anheuser-Busch Co. Inc.   4.7% 2/1/2036
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Mining 0.23% 0.69% -0.09% 2.15% 5.68% 7.06%
Construction 0.12% 0.55% 0.97% 2.29% 6.22% 7.43%
Manufacturing 0.06% 0.42% 0.11% 1.17% 7.55% 8.76%
Transportion, Communication, Electric/Gas 0.16% 0.66% -0.14% 0.68% 8.59% 9.90%
Wholesale 0.03% 0.40% 0.25% 2.51% 7.58% 9.97%
Retail 0.02% 0.46% 0.16% 0.31% 8.55% 10.32%
Finance, Insurance, Real-Estate 0.03% 0.28% 0.10% 1.19% 6.42% 7.79%
Services 0.03% 0.33% 0.01% 1.06% 7.13% 8.12%
Public Administration 0.03% 0.08% 0.24% 0.19% 5.08% 4.79%
Energy 0.22% 0.80% -0.37% 1.47% 4.46% 6.33%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Komatsu Finance America Inc. (USD) 0.74% 10/23/2023 (10/14/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding .74%.

2. Baptist Health Obligated Group (USD) 3.54% 8/15/2050 (10/14/2020): 510MM Unsecured Notes, Price at Issuance 100, Yielding 3.54%.

3. Franklin Resources Inc. (USD) 1.6% 10/30/2030 (10/14/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.778, Yielding 1.62%.

4. New York Life Global Funding (USD) FLT% 10/21/2023 144A (10/14/2020): 300MM Secured Notes.

5. New York Life Global Funding (USD) 0.4% 10/21/2023 144A (10/14/2020): 500MM Secured Notes, Price at Issuance 99.92, Yielding .43%.

6. New York Life Global Funding (USD) 0.4% 10/21/2023 Reg S (10/14/2020): 500MM Secured Notes, Price at Issuance 99.92, Yielding .43%.

7. New York Life Global Funding (USD) FLT% 10/21/2023 Reg S (10/14/2020): 300MM Secured Notes, Price at Issuance 300.

8. NEW Red Finance, Inc. (USD) 4% 10/15/2030 (10/14/2020): 1500MM Second Lien Notes, Price at Issuance 100, Yielding 4%.

9. National Bank of Canada (USD) 0% 11/13/2060 (10/14/2020): 280MM Senior Unsecured Notes, Price at Issuance 100, Yielding 0%.

Additional Commentary

NEW ISSUANCE WATCH: Komatsu Finance America Inc. issued 50MM in notes.
Top Widening Loans Top Narrowing Loans
Unifrax Corp. (USD) TL2 L+850 12/14/2026
Assystem (EUR) TLB E+425 09/28/2024
Archroma Global Services (USD) TLB2 L+425 07/11/2024
SSH Group Hldg Inc. (USD) TL2 L+825 07/30/2026
Mavenir Inc. (USD) TLB L+600 05/08/2025
Ball Corp. (USD) TLA L+150 03/21/2024
Imagina Media Audiovisual SL (EUR) TLA E+400 06/22/2025
Carrols Restaurant Group (USD) TLB1 L+625 04/30/2026
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026
Dubois Chemicals Inc. (USD) TL L+450 09/30/2026

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 10/15/2020
  • Net positive capital flows into high-yield ETFs & mutual funds

Copyright 2020 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.


Disclaimer: The information on this blog site is for informational purposes only.  Advantage Data makes no representations as to the accuracy, completeness, suitability, or validity, of any information. Advantage Data will not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. All information is provided AS-IS with no warranties and confers no rights. Information is not and should not be considered professional financial investment advice. In all events, Advantage Data is not a broker-dealer, shall not operate as a broker or a dealer, is not holding itself out as a broker or dealer and is not engaged in the business of buying or selling securities or otherwise required to register with the National Association of Securities Dealers.


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 300,000+ BDC fair value assessments dating back to 2000
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 15 products and services from debt 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