GLOBAL MARKETS WERE DOWN AS STIMULUS TALKS FALTER. PELOSI AND MNUCHIN ARE GETTING CLOSER, BUT SENATE REPUBLICANS ARE BAULKING AT THE SIZE OF THE RESCUE. 10 Year Treasury notes were up 1.7 bps. S&P -1.63%, Dow -1.44%, NASDAQ -1.65%.
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Market Summaries
North American Bond Research – October 19, 2020
Posted on October 19, 2020|
HIGH YIELD BOND RESEARCH
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October 19, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 40.5 MILLION+ CASES AND 1.12 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.4 MILLION+ CASES AND 225000+ 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 6.25% 8/10/2026 T-Mobile USA Inc. 3.875% 4/15/2030 144A Pacific Gas & Electric Co. 4.75% 2/15/2044 Pacific Gas & Electric Co. 4.95% 7/1/2050 T-Mobile USA Inc. 3.5% 4/15/2025 144A Ally Financial Inc. 4.625% 5/19/2022 Sprint Capital Corp. 6.875% 11/15/2028 Ford Motor Co. 9.625% 4/22/2030 Broadcom LTD 4.3% 11/15/2032 Diamondback Energy Inc. 3.5% 12/1/2029 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
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(None Current 10/19/2020)
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1. Weber-Stephen Products LLC: $1.5B credit facilities: $300MM revolver; $1.2MM TLB
2. Virtusa Corp.: $725MM credit facilities: $125MM revolver; $600MM TL 3. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB 4. Quirch Foods LLC: $675MM credit facilities: $475MM TLB; $200MM revolver 5. E2 Open: $600MM credit facilities: $75MM revolver; $525MM TLB 6. Adtalem: $1.4B credit facilities: $400MM revolver; $1B TLB 7. Covis Group SARL: $485MM credit facilities: $460MM TL; $25MM revolver 8. Cincinnati Bell Inc.: $1.6B credit facilities: $250MM revolver; $1.35B TL 9. Adevinta: $500MM TLB (BB-/BB+) 10. Virtusa Corp.: $725MM credit facilities: $125MM revolver; $600MM TL |
Additional Commentary
NEW ISSUANCE WATCH: New Home Co Inc issued 250MM
| Top Widening Loans | Top Narrowing Loans |
| Alliance Healthcare Services Inc. (USD) TL L+450 10/24/2023 CSM Bakery (USD) TL L+1000 02/04/2022 API Technologies Corp. (USD) TL L+425 05/09/2026 Wittur (EUR) TL E+850 09/19/2027 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 |
Rayonier AM Products Inc. (USD) TLA L+375 11/17/2022 CPV Shore LLC (USD) TLB L+375 12/27/2025 Cvent Inc. (USD) TL L+375 11/02/2024 Fortress Merger Sub Inc. (USD) TL L+400 10/21/2023 Mitel Networks Corp. (USD) TL L+450 11/30/2025 |
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 13 bps (basis points), as of 10/19/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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October 19, 2020
|
Bond Markets
GLOBAL MARKETS WERE DOWN AS STIMULUS TALKS FALTER. PELOSI AND MNUCHIN ARE GETTING CLOSER, BUT SENATE REPUBLICANS ARE BAULKING AT THE SIZE OF THE RESCUE. 10 Year Treasury notes were up 1.7 bps. S&P -1.63%, Dow -1.44%, NASDAQ -1.65%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 40.5 MILLION+ CASES AND 1.12 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.4 MILLION+ CASES AND 225000+ 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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Sanofi-Aventis 4% 3/29/2021 Lowe’s Companies Inc. 1.7% 10/15/2030 Bank of America Corp. 4.083% 3/20/2051 Suzano Austria GmbH 3.75% 1/15/2031 Lowe’s Companies Inc. 3% 10/15/2050 SYSCO Corp. 6.6% 4/1/2050 PNC Bank NA 2.625% 2/17/2022 General Motors Co. 5.95% 4/1/2049 General Electric Co. 4.35% 5/1/2050 General Motors Co. 5.4% 4/1/2048 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
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(None Current 10/19/2020)
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Additional Commentary
NEW ISSUANCE WATCH: W.K. Kellogg Foundation Trust issued 300MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Alliance Healthcare Services Inc. (USD) TL L+450 10/24/2023 CSM Bakery (USD) TL L+1000 02/04/2022 API Technologies Corp. (USD) TL L+425 05/09/2026 Wittur (EUR) TL E+850 09/19/2027 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 |
Rayonier AM Products Inc. (USD) TLA L+375 11/17/2022 CPV Shore LLC (USD) TLB L+375 12/27/2025 Cvent Inc. (USD) TL L+375 11/02/2024 Fortress Merger Sub Inc. (USD) TL L+400 10/21/2023 Mitel Networks Corp. (USD) TL L+450 11/30/2025 |
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 13 bps (basis points), as of 10/19/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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