GLOBAL MARKETS AGAIN LOWER AS COVID CASES ARE SURGING AS THE SECOND COVID-19 WAVE WASHES OVER THE GLOBE. STIMULUS TALKS ARE ALSO BOGGED DOWN AS SENATE REPUBLICANS WARN TRUMP NOT TO “GO BIG”. 10 Year Treasury notes were up 1.9 bps. S&P -0.22%, Dow -0.35%, NASDAQ -0.28%.
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Market Summaries
North American Bond Research – October 21, 2020
Posted on October 21, 2020|
HIGH YIELD BOND RESEARCH
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October 21, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 41.4 MILLION+ CASES AND 1.13 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.56 MILLION+ CASES AND 227000+ 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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T-Mobile USA Inc. 3.875% 4/15/2030 144A Ally Financial Inc. 3.875% 5/21/2024 Millicom Intl. Cellular SA 4.5% 4/27/2031 Reg S Diamondback Energy Inc. 3.5% 12/1/2029 Broadcom LTD 4.75% 4/15/2029 Teva Pharmaceutical Industries LTD 3.15% 10/1/2026 Pacific Gas & Electric Co. 4.95% 7/1/2050 WPX Energy Inc. 4.5% 1/15/2030 Vale Overseas LTD 6.25% 8/10/2026 WPX Energy Inc. 5.25% 10/25/2027 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Dave & Buster’s Inc. (USD) 7.625% 11/1/2025 144A (10/20/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 7.63%.
2. NEW Red Finance, Inc. (USD) 3.5% 2/15/2029 144A (10/20/2020): 750MM First Lien Notes, Price at Issuance 100, Yielding 3.5%. 3. Ingevity Corp. (USD) 3.875% 11/1/2028 144A (10/20/2020): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 4. Dave & Buster’s Inc. (USD) 7.625% 11/1/2025 Reg S (10/20/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 7.63%. 5. NEW Red Finance, Inc. (USD) 3.5% 2/15/2029 Reg S (10/20/2020): 750MM First Lien Notes, Price at Issuance 100, Yielding 3.5%. 6. Ingevity Corp. (USD) 3.875% 11/1/2028 Reg S (10/20/2020): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. |
1. Barracuda Networks: $571MM Term loans: $206MM TL; $365 TL
2. CNT Holdings I Corp.: $1.405B credit facilities: $110MM revolver (B2/B); $980MM TLB (B2/B); $315MM TL (Caa2/CCC+) 3. E2 Open: $600MM credit facilities: $75MM revolver; $525MM TLB 4. Highline Aftermarket Acquisition LLC: $735MM TL (B2/B) 5. J.D. Power: $100MM incremental TL 6. Trugreen LP: $1.425MM TLs: $1.15B TL (B1/B); $275MM (Caa1/CCC+) 7. Weber-Stephen Products LLC: $1.5B credit facilities: $300MM revolver; $1.2MM TLB 8. Adevinta: $500MM TLB (BB-/BB+) 9. Weber-Stephen Products LLC: $1.5B credit facilities: $300MM revolver; $1.2MM TLB 10. Virtusa Corp.: $725MM credit facilities: $125MM revolver; $600MM TL |
Additional Commentary
NEW ISSUANCE WATCH: Dave & Buster’s Inc. Inc issued 550MM
| Top Widening Loans | Top Narrowing Loans |
| Mattress Firm (USD) TL EXIT 11/21/2022 Unifrax Corp. (USD) TL2 L+850 12/14/2026 Compass IV LTD (EUR) TL E+800 05/09/2026 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 Archroma Global Services (USD) TLB2 L+425 07/11/2024 |
EG Group (USD) TL L+800 03/23/2026 Vertafore Inc. (USD) TL2 L+725 07/02/2026 Cvent Inc. (USD) TL L+375 11/02/2024 Tacala LLC (USD) TLB L+750 02/05/2028 Rover (USD) TLB2 L+350 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 12 bps (basis points), as of 10/21/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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October 21, 2020
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Bond Markets
GLOBAL MARKETS AGAIN LOWER AS COVID CASES ARE SURGING AS THE SECOND COVID-19 WAVE WASHES OVER THE GLOBE. STIMULUS TALKS ARE ALSO BOGGED DOWN AS SENATE REPUBLICANS WARN TRUMP NOT TO “GO BIG”. 10 Year Treasury notes were up 1.9 bps. S&P -0.22%, Dow -0.35%, NASDAQ -0.28%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 41.4 MILLION+ CASES AND 1.13 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.56 MILLION+ CASES AND 227000+ 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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Bank of America Corp. VAR% 10/24/2031 GlaxoSmithKline Capital PLC 0.534% 10/1/2023 Apple Inc. 2.65% 5/11/2050 Textron Inc. FLT% 11/10/2020 SMITH & NEPHEW PLC 2.032% 10/14/2030 Takeda Pharmaceutical Co. LTD 2.05% 3/31/2030 Alphabet Inc. 2.05% 8/15/2050 Bank of America Corp. 3.004% 12/20/2023 Lowe’s Companies Inc. 3% 10/15/2050 General Electric Co. 4.35% 5/1/2050 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Bank of Montreal (USD) 1.4% 10/21/2030 (10/20/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.4%.
2. Banner Health (USD) 1.897% 1/1/2031 (10/20/2020): 301MM Unsecured Notes, Price at Issuance 100, Yielding 1.9%. 3. Banner Health (USD) 2.913% 1/1/2051 (10/20/2020): 301MM Unsecured Notes, Price at Issuance 100, Yielding 2.91%. 4. Southern Illinois Healthcare Enterprises Inc. (USD) 3.97% 5/15/2050 (10/20/2020): 100MM Unsecured Notes, Price at Issuance 100, Yielding 3.97%. 5. Central Pacific Financial Corp. (USD) VAR% 11/1/2030 (10/20/2020): 55MM Subordinated Notes, Price at Issuance 100. 6. National Bank of Canada (USD) 0% 11/3/2060 (10/21/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 0%. |
Additional Commentary
NEW ISSUANCE WATCH: Bank of Montreal Incissued 50MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Mattress Firm (USD) TL EXIT 11/21/2022 Unifrax Corp. (USD) TL2 L+850 12/14/2026 Compass IV LTD (EUR) TL E+800 05/09/2026 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 Archroma Global Services (USD) TLB2 L+425 07/11/2024 |
EG Group (USD) TL L+800 03/23/2026 Vertafore Inc. (USD) TL2 L+725 07/02/2026 Cvent Inc. (USD) TL L+375 11/02/2024 Tacala LLC (USD) TLB L+750 02/05/2028 Rover (USD) TLB2 L+350 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 12 bps (basis points), as of 10/20/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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