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%.
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Market Summaries
North American Bond Research – October 22, 2020
Posted on October 22, 2020|
HIGH YIELD BOND RESEARCH
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October 22, 2020
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Bond Markets
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 | ||||||||||||||||||||||||||||||
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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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 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
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INVESTMENT GRADE BOND RESEARCH
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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 | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 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
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