Grid IconAll Posts Market Summaries

North American Bond Research – October 22, 2020

Posted on October 22, 2020
HIGH YIELD BOND RESEARCH
October 22, 2020
Bond Markets

GLOBAL MARKETS REBOUNDED ON NEWS SPEAKER PELOSI WAS WILLING TO INK A DEAL. JOBLESS CLAIMS FELL THIS WEEK TO 787K ALMOST MATCHING MARCH’S LOW’S OF 767K JOBS LOST.  10 Year Treasury notes were up 3.2 bps. S&P +0.52%, Dow +0.54%, NASDAQ +0.19%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 41.9 MILLION+ CASES AND 1.14 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.6 MILLION+ CASES AND 228000+ 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
+   Occidental Petroleum Corp. 2.9% 8/15/2024 +1.8%
  Deutsche Bank AG VAR% 12/1/2032 +2.0%
  Petrobras Global Finance BV 8.75% 5/23/2026 +0.2%
  JBS Investments GmbH 7% 1/15/2026 Reg S +0.1%
  Ford Motor Credit Co. 4.14% 2/15/2023 +0.0%
–   Gulfport Energy Corp. 6.625% 5/1/2023 -1.0%
  T-Mobile USA Inc. 3.875% 4/15/2030 144A -0.6%
  Pacific Gas & Electric Co. 4.95% 7/1/2050 -1.6%
  Nationwide Building Society 3.622% 4/26/2023 Reg S -0.1%
  Broadcom LTD 3.459% 9/15/2026 -0.2%
Gulfport Energy Corp.   6.625% 5/1/2023
Occidental Petroleum Corp.   2.9% 8/15/2024
T-Mobile USA Inc.   3.875% 4/15/2030 144A
Pacific Gas & Electric Co.   4.95% 7/1/2050
Nationwide Building Society   3.622% 4/26/2023 Reg S
Broadcom LTD   3.459% 9/15/2026
Pacific Gas & Electric Co.   4.55% 7/1/2030
Millicom Intl. Cellular SA   4.5% 4/27/2031 Reg S
Deutsche Bank AG   VAR% 12/1/2032
Petrobras Global Finance BV   8.75% 5/23/2026
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.04% -0.08% 0.39% 2.16% 5.74% 7.65%
Mining 0.04% -0.54% 71.28% 26.39% -10.62% -7.20%
Construction -0.03% -0.01% 1.60% 4.79% 6.45% 7.99%
Manufacturing -0.01% -0.09% 1.10% 3.34% 3.64% 7.00%
Transportion, Communication, Electric/Gas -0.07% -0.25% 0.41% 1.50% 3.95% 5.77%
Wholesale -0.06% -0.26% 0.40% 1.37% 1.55% 4.00%
Retail -0.03% -0.06% 1.46% 5.70% 3.89% 5.92%
Finance, Insurance, Real-Estate -0.03% -0.02% 0.95% 3.86% 2.41% 4.65%
Services -0.02% -0.11% 0.40% 3.67% 3.09% 5.00%
Public Administration -0.44% -0.60% 0.55% 5.17% 7.88% 12.01%
Energy -0.04% -0.20% 62.62% 23.08% -9.04% -5.40%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. Providence Service Corp. (USD) 5.875% 11/15/2025 Reg S (10/21/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.88%.

2. Shuaa Capital (USD) 7.5% 10/28/2023 (10/21/2020): 150MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7.5%.

3. Providence Service Corp. (USD) 5.875% 11/15/2025 144A (10/21/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.88%.

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:   Providence Service Corp. issued 500MM
Top Widening Loans Top Narrowing Loans
Unifrax Corp. (USD) TL2 L+850 12/14/2026
Mattress Firm (USD) TL EXIT 11/21/2022
Granite Hldg US Acquisition Co. (USD) TLB L+525 09/30/2026
CPM Holdings Inc. (USD) TL2 L+825 11/16/2026
Douglas Holding AG (EUR) TLB1 E+350 08/13/2022
Flint Group (EUR) TLB E+300 09/07/2023
Heartland Dental Care Inc. (USD) TLB L+650 04/30/2025
Archroma Global Services (EUR) TLB1 E+400 07/28/2024
Tacala LLC (USD) TLB L+350 02/05/2027
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 10/22/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
October 22, 2020
Bond Markets

GLOBAL MARKETS REBOUNDED ON NEWS SPEAKER PELOSI WAS WILLING TO INK A DEAL. JOBLESS CLAIMS FELL THIS WEEK TO 787K ALMOST MATCHING MARCH’S LOW’S OF 767K JOBS LOST.  10 Year Treasury notes were up 3.2 bps. S&P +0.52%, Dow +0.54%, NASDAQ +0.19%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 41.9 MILLION+ CASES AND 1.14 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 8.6 MILLION+ CASES AND 228000+ 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
+   Ally Financial Inc. 5.8% 5/1/2025 +0.1%
  Bank of America Corp. VAR% PERP +0.2%
  Goldman Sachs Group Inc. FLT% 11/15/2021 +1.0%
  Brown & Brown Inc. 4.5% 3/15/2029 +0.8%
  Express Scripts Holding Co. 3.4% 3/1/2027 +0.1%
–   Lowe’s Companies Inc. 1.7% 10/15/2030 -0.2%
  AT&T Inc. 1.65% 2/1/2028 -0.2%
  Lowe’s Companies Inc. 3% 10/15/2050 -0.2%
  CVS Health Corp. 4.3% 3/25/2028 -0.4%
  PepsiCo. Inc. 3.875% 3/19/2060 -1.1%
Lowe’s Companies Inc.   1.7% 10/15/2030
AT&T Inc.   1.65% 2/1/2028
Lowe’s Companies Inc.   3% 10/15/2050
CVS Health Corp.   4.3% 3/25/2028
PepsiCo. Inc.   3.875% 3/19/2060
Ally Financial Inc.   5.8% 5/1/2025
Alphabet Inc.   2.05% 8/15/2050
Boeing Co.   5.805% 5/1/2050
Bank of America Corp.   VAR% 10/24/2031
eBay Inc.   3.6% 6/5/2027
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Mining -0.08% -0.42% -0.53% 0.06% 5.45% 6.88%
Construction 0.01% 0.02% 0.32% 2.28% 6.21% 7.54%
Manufacturing -0.08% -0.43% -0.25% 0.08% 7.25% 8.48%
Transportion, Communication, Electric/Gas -0.18% -0.66% -0.75% -0.87% 8.00% 9.38%
Wholesale -0.07% -0.24% 0.06% 1.30% 7.43% 9.51%
Retail -0.06% -0.44% -0.22% -0.78% 8.39% 10.09%
Finance, Insurance, Real-Estate -0.05% -0.24% -0.06% 0.56% 6.29% 7.50%
Services -0.10% -0.44% -0.30% 0.14% 6.74% 7.63%
Public Administration -0.01% -0.04% -0.04% 0.12% 5.01% 5.09%
Energy -0.12% -0.48% -0.77% -0.38% 4.18% 6.06%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Royal Bank of Canada (USD) 0.5% 10/26/2023 (10/21/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.938, Yielding .52%.

2. Royal Bank of Canada (USD) FLT% 10/26/2023 (10/21/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100.

3. FS Global Credit Opportunities Fund (USD) 4% 11/1/2025 (10/21/2020): 50MM Junior Subordinated Notes, Price at Issuance 100, Yielding 4%.

4. FS Global Credit Opportunities Fund (USD) 4.49% 11/1/2025 (10/21/2020): 50MM Junior Subordinated Notes, Price at Issuance 100, Yielding 4.49%.

5. Commonspirit Health (USD) 1.547% 10/1/2025 (10/21/2020): 450MM Secured Notes, Price at Issuance 100, Yielding 1.55%.

6. Commonspirit Health (USD) 2.782% 10/1/2030 (10/21/2020): 550MM Secured Notes, Price at Issuance 100, Yielding 2.78%.

7. Commonspirit Health (USD) 3.91% 10/1/2050 (10/21/2020): 658MM Secured Notes, Price at Issuance 100, Yielding 3.91%.

8. Pomona College (USD) 2.888% 1/1/2051 (10/21/2020): 206MM Unsecured Notes, Price at Issuance 100, Yielding 2.89%.

9. National Bank of Canada (USD) 0% 11/3/2060 (10/21/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 0%.

10. Midmichigan Health (USD) 3.409% 6/1/2050 (10/22/2020): 318MM Secured Notes, Price at Issuance 100, Yielding 3.41%.

Additional Commentary

NEW ISSUANCE WATCH:  Royal Bank of Canada   Incissued 1250MM in notes.
Top Widening Loans Top Narrowing Loans
Unifrax Corp. (USD) TL2 L+850 12/14/2026
Mattress Firm (USD) TL EXIT 11/21/2022
Granite Hldg US Acquisition Co. (USD) TLB L+525 09/30/2026
CPM Holdings Inc. (USD) TL2 L+825 11/16/2026
Douglas Holding AG (EUR) TLB1 E+350 08/13/2022
Flint Group (EUR) TLB E+300 09/07/2023
Heartland Dental Care Inc. (USD) TLB L+650 04/30/2025
Archroma Global Services (EUR) TLB1 E+400 07/28/2024
Tacala LLC (USD) TLB L+350 02/05/2027
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 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