GLOBAL MARKETS LOWER AGAIN AS COVID CONTINUES TO RAVAGE THE US AND EUROPE. THE LACK OF PROGRESS ON THE STIMULUS AND THE UNCERTAINTY OF THE US ELECTION IS ADDING TO MARKET VOLATILITY. 10 Year Treasury notes were down 0.3 bps. S&P -3.43%, Dow -3.53%, NASDAQ -3.73%.
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Market Summaries
North American Bond Research – October 28, 2020
Posted on October 28, 2020|
HIGH YIELD BOND RESEARCH
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October 28, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 44.2 MILLION+ CASES AND 1.17 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 9.1 MILLION+ CASES AND 233000+ 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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Pacific Gas & Electric Co. 4.95% 7/1/2050 Cenovus Energy Inc. 5.375% 7/15/2025 CNH Industrial Capital LLC 3.875% 10/15/2021 Petrobras Global Finance BV 7.375% 1/17/2027 Cheniere Corpus Christi Hldgs LLC 5.125% 6/30/2027 Crown Castle Intl Corp. 5.25% 1/15/2023 HCA Inc. 3.5% 9/1/2030 Diamondback Energy Inc. 3.5% 12/1/2029 Community Health Systems Inc. 6.25% 3/31/2023 BED Bath & Beyond Inc. 5.165% 8/1/2044 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Cars.Com Inc. (USD) 6.375% 11/1/2028 144A (10/27/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%.
2. Cars.Com Inc. (USD) 6.375% 11/1/2028 Reg S (10/27/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%. 3. MPH Acquisition Holdings LLC (USD) 5.75% 11/1/2028 Reg S (10/27/2020): 1300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%. 4. MPH Acquisition Holdings LLC (USD) 5.75% 11/1/2028 144A (10/27/2020): 1300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%. |
1. Les Schwab Tire Centers: $1.575MM TLB (B2/B)
2. Highline Aftermarket Acquisition LLC: $735MM TL (B2/B) 3. Imperva: $147MM TL 4. J.D. Power: $100MM incremental TL 5. E2 Open: $600MM credit facilities: $75MM revolver; $525MM TLB 6. CNT Holdings I Corp.: $1.405B credit facilities: $110MM revolver (B2/B); $980MM TLB (B2/B); $315MM TL (Caa2/CCC+) 7. Amentum: $980MM TL (B1/B) 8. Academy Ltd.: $400MM TL (B2/B) 9. Trugreen LP: $1.425MM TLs: $1.15B TL (B1/B); $275MM (Caa1/CCC+) 10. Highland Holdings: $500MM senior secured PIK (/BB+) |
Additional Commentary
NEW ISSUANCE WATCH: Cars.Com Inc. Inc issued 400MM Notes.
| Top Widening Loans | Top Narrowing Loans |
| Mattress Firm (USD) TL EXIT 11/21/2022 OVH Groupe (EUR) TLB E+325 11/29/2026 Rover (USD) TLB2 L+350 11/01/2024 Averys SA (EUR) TLB E+825 09/25/2026 Archroma Global Services (USD) TLB2 L+425 07/11/2024 |
Tacala LLC (USD) TLB L+350 02/05/2027 BioClinica Inc. (USD) TL L+825 10/06/2024 Dubois Chemicals Inc. (USD) TL L+450 09/30/2026 Sandvine Corp. (USD) TL 10/15/2026 Dental Corp. (USD) TL L+375 06/06/2025 |
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 10/28/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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October 28, 2020
|
Bond Markets
GLOBAL MARKETS LOWER AGAIN AS COVID CONTINUES TO RAVAGE THE US AND EUROPE. THE LACK OF PROGRESS ON THE STIMULUS AND THE UNCERTAINTY OF THE US ELECTION IS ADDING TO MARKET VOLATILITY. 10 Year Treasury notes were down .3 bps. S&P -3.43%, Dow -3.53%, NASDAQ -3.73%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 44.2 MILLION+ CASES AND 1.17 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 9.1 MILLION+ CASES AND 233000+ 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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Boeing Co. 5.805% 5/1/2050 General Electric Co. 4.35% 5/1/2050 GE Capital Intl. Funding Co. 4.418% 11/15/2035 Boeing Co. 5.15% 5/1/2030 Vodafone Group PLC 4.25% 9/17/2050 Walt Disney Co. 2.65% 1/13/2031 Energy Transfer Operating, LP 5% 5/15/2050 Boeing Co. 4.875% 5/1/2025 Deutsche Bank AG VAR% 9/18/2024 Boeing Co. 4.508% 5/1/2023 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Acuity Brands Inc. (USD) 2.15% 12/15/2030 (10/27/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.737, Yielding 2.18%.
2. Genuine Parts Co. (USD) 1.875% 11/1/2030 (10/27/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.069, Yielding 1.98%. 3. Berkshire Hathaway Energy Co. (USD) 1.65% 5/15/2031 144A (10/27/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.73, Yielding 1.68%. 4. Berkshire Hathaway Energy Co. (USD) 2.85% 5/15/2051 144A (10/27/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.877, Yielding 2.86%. 5. Procter & Gamble Co. (USD) 1.2% 10/29/2030 (10/27/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.55, Yielding 1.25%. 6. Tractor Supply Co. (USD) 1.75% 11/1/2030 (10/27/2020): 650MM Senior Unsecured Notes, Price at Issuance 98.874, Yielding 1.87%. 7. Berkshire Hathaway Energy Co. (USD) 1.65% 5/15/2031 Reg S (10/27/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.73, Yielding 1.68%. 8. Berkshire Hathaway Energy Co. (USD) 2.85% 5/15/2051 Reg S (10/27/2020): 1500MM Senior Unsecured Notes, Price at Issuance 99.877, Yielding 2.86%. 9. Procter & Gamble Co. (USD) 0.55% 10/29/2025 (10/27/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.838, Yielding .58%. 10. Banc of California NA (USD) VAR% 10/30/2030 (10/27/2020): 85MM Subordinated Notes, Price at Issuance 100. |
Additional Commentary
NEW ISSUANCE WATCH: Acuity Brands Inc. issued 500 MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Mattress Firm (USD) TL EXIT 11/21/2022 OVH Groupe (EUR) TLB E+325 11/29/2026 Rover (USD) TLB2 L+350 11/01/2024 Averys SA (EUR) TLB E+825 09/25/2026 Archroma Global Services (USD) TLB2 L+425 07/11/2024 |
Tacala LLC (USD) TLB L+350 02/05/2027 BioClinica Inc. (USD) TL L+825 10/06/2024 Dubois Chemicals Inc. (USD) TL L+450 09/30/2026 Sandvine Corp. (USD) TL 10/15/2026 Dental Corp. (USD) TL L+375 06/06/2025 |
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 10/28/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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