Grid IconAll Posts Market Summaries

North American Bond Research – October 30, 2020

Posted on October 30, 2020
HIGH YIELD BOND RESEARCH
October 30, 2020
Bond Markets

GLOBAL MARKETS END THEIR WORST WEEK SINCE MARCH AS COVID-19 VIRUS TOP 90,000 CASES A DAY. HUGE BOUNCE BACK IN GDP GROWTH COUPLED WITH STRONG SEPTEMBER CONSUMER FIGURES GIVE SOME HOPE TO MARKETS. 10 Year Treasury notes were up 5.4 bps. S&P -0.59%, Dow -1.21%, NASDAQ -2.45%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 45.8 MILLION+ CASES AND 1.19 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 9.3 MILLION+ CASES AND 235000+ 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
+   Ford Motor Co. 8.5% 4/21/2023 +0.0%
  Cenovus Energy Inc. 5.375% 7/15/2025 +1.3%
  Petrobras Global Finance BV 7.375% 1/17/2027 +0.8%
  Sprint Capital Corp. 8.75% 3/15/2032 +0.1%
  Ford Motor Co. 9% 4/22/2025 +0.1%
–   Vale Overseas LTD 3.75% 7/8/2030 -0.2%
  MGM Resorts Intl 4.75% 10/15/2028 -0.4%
  Pacific Gas & Electric Co. 4.55% 7/1/2030 -0.2%
  Corrections Corp. of America 5% 10/15/2022 -2.1%
  Pacific Gas & Electric Co. 4.95% 7/1/2050 -0.3%
Vale Overseas LTD   3.75% 7/8/2030
MGM Resorts Intl   4.75% 10/15/2028
Pacific Gas & Electric Co.   4.55% 7/1/2030
Corrections Corp. of America   5% 10/15/2022
Ford Motor Co.   8.5% 4/21/2023
Cenovus Energy Inc.   5.375% 7/15/2025
Petrobras Global Finance BV   7.375% 1/17/2027
Pacific Gas & Electric Co.   4.95% 7/1/2050
Sprint Capital Corp.   8.75% 3/15/2032
Occidental Petroleum Corp.   6.45% 9/15/2036
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.06% -0.28% 0.76% 0.68% 5.56% 7.42%
Mining -0.57% -0.99% 73.90% 26.94% -10.66% -7.01%
Construction -0.18% -0.61% 1.28% 3.23% 5.99% 7.13%
Manufacturing -0.18% -0.53% 1.28% 1.73% 3.21% 6.20%
Transportion, Communication, Electric/Gas -0.17% -0.55% 2.73% 2.56% 3.59% 5.81%
Wholesale -0.11% -0.61% 0.80% 0.62% 2.85% 4.91%
Retail -0.13% -0.72% 1.29% 3.35% 2.14% 4.12%
Finance, Insurance, Real-Estate -0.17% -0.48% 1.05% 2.23% 2.60% 4.51%
Services -0.12% -1.03% 0.08% 1.15% 2.28% 3.83%
Public Administration -0.35% -0.51% 0.87% 3.99% 7.64% 9.63%
Energy -0.61% -1.15% 65.15% 23.36% -9.51% -5.31%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. CCM Merger Inc. (USD) 6.375% 5/1/2026 Reg S (10/29/2020): 275MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%.

2. Finance of America Funding LLC (USD) 7.875% 11/15/2025 144A (10/29/2020): 350MM Senior Unsecured Notes, Price at Issuance 99, Yielding 8.12%.

3. CCM Merger Inc. (USD) 6.375% 5/1/2026 144A (10/29/2020): 275MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%.

4. Finance of America Funding LLC (USD) 7.875% 11/15/2025 Reg S (10/29/2020): 350MM Senior Unsecured Notes, Price at Issuance 99, Yielding 8.12%.

1. PetSmart: $1150MM senior unsecured notes (Caa1/CCC+)

2. Aston Martin: $840MM senior secured notes (Caa2/CCC)

3. PetSmart: $1200MM senior secured notes (B1/B)

4. LABL Inter: $500MM senior PIK toggle (/B-)

5. Sizzling Platter: $325MM senior secured notes (B3/)

6. NRG Energy Inc.: $2361MM secured and unsecured notes

7. Empire Resorts Inc.: $475MM senior secured notes (B+/B+)

8. Smyrna Rady: $515MM senior secured notes (B1/)

9. Franchise Group: $650MM senior secured notes (B1/B+)

10. Aston Martin: senior secured notes (Caa2/CCC)

Additional Commentary

NEW ISSUANCE WATCH:    CCM Merger Inc. Inc issued 275 MM Notes.
Top Widening Loans Top Narrowing Loans
Tritech Software Systems (USD) TL2 L+750 08/31/2026
JC Penney Co. Inc. (USD) DD L+1175 11/15/2020
Mattress Firm (USD) TL EXIT 11/21/2022
Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023
Assystem (EUR) TLB E+425 09/28/2024
Distributed Power Inc. (USD) TLB L+325 11/02/2025
Asmodee (EUR) TL 10/22/2026
MFG / MRH (GBP) TL2 06/21/2026
Academy LTD (USD) TLB L+400 07/05/2022
Waterbridge Operating LLC (USD) TLB L+575 06/18/2026

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 10/30/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
October 30, 2020
Bond Markets

US MARKETS BOUNCED BACK AMID STRONG REBOUND IN US GDP NUMBERS WHILE EUROPE’S MARKETS WERE UNCHANGED AMID COVID SURGE. 10 Year Treasury notes were up 5.4 bps. S&P +1.19%, Dow +0.52%, NASDAQ +1.64%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 45.8 MILLION+ CASES AND 1.19 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 9.3 MILLION+ CASES AND 235000+ 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
+   Procter & Gamble Co. 1.2% 10/29/2030 +0.0%
  Wells Fargo & Co. 2.5% 3/4/2021 +0.1%
  Comcast Corp. 4.25% 10/15/2030 +0.2%
  Amazon.com Inc. 2.7% 6/3/2060 +1.2%
  Qualcomm Inc. 3.25% 5/20/2050 +0.3%
–   FirstEnergy Corp. 3.9% 7/15/2027 -3.6%
  Boeing Co. 5.805% 5/1/2050 -1.0%
  FirstEnergy Corp. 3.4% 3/1/2050 -4.3%
  Bank of America Corp. VAR% 10/24/2031 -0.2%
  FirstEnergy Corp. 4.85% 7/15/2047 -7.8%
Boeing Co.   3.625% 2/1/2031
FirstEnergy Corp.   3.9% 7/15/2027
Boeing Co.   5.805% 5/1/2050
FirstEnergy Corp.   3.4% 3/1/2050
Bank of America Corp.   VAR% 10/24/2031
FirstEnergy Corp.   4.85% 7/15/2047
Boeing Co.   5.15% 5/1/2030
Procter & Gamble Co.   1.2% 10/29/2030
Boeing Co.   3.25% 2/1/2028
Tractor Supply Co.   1.75% 11/1/2030
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Mining -0.33% 0.08% 0.18% -0.63% 5.35% 6.79%
Construction -0.17% 0.18% 0.71% 1.63% 6.10% 7.55%
Manufacturing -0.29% 0.06% 0.03% -0.42% 7.52% 8.74%
Transportion, Communication, Electric/Gas -0.32% 0.26% -0.10% -1.32% 8.27% 9.82%
Wholesale -0.20% 0.06% 0.53% 0.78% 7.66% 9.65%
Retail -0.35% 0.15% 0.09% -0.98% 8.53% 10.18%
Finance, Insurance, Real-Estate -0.21% 0.14% 0.30% 0.24% 6.61% 7.90%
Services -0.29% 0.04% -0.03% -0.33% 6.81% 7.90%
Public Administration -0.02% 0.07% -0.11% 0.03% 5.02% 5.37%
Energy -0.35% 0.04% 0.06% -1.08% 4.07% 5.91%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Boeing Co. (USD) 2.75% 2/1/2026 (10/29/2020): 1400MM Senior Unsecured Notes, Price at Issuance 99.92, Yielding 2.77%.

2. Stanley Black & Decker Inc. (USD) 2.75% 11/15/2050 (10/29/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.735, Yielding 2.76%.

3. Baxter International Inc. (USD) 1.73% 4/1/2031 144A (10/29/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.906, Yielding 1.74%.

4. Philip Morris Intl. Inc. (USD) 0.875% 5/1/2026 (10/29/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.631, Yielding .94%.

5. Philip Morris Intl. Inc. (USD) 1.75% 11/1/2030 (10/29/2020): 750MM Senior Unsecured Notes, Price at Issuance 98.992, Yielding 1.86%.

6. Boeing Co. (USD) 1.95% 2/1/2024 (10/29/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.864, Yielding 1.99%.

7. Boeing Co. (USD) 3.25% 2/1/2028 (10/29/2020): 1100MM Senior Unsecured Notes, Price at Issuance 99.978, Yielding 3.25%.

8. Boeing Co. (USD) 3.625% 2/1/2031 (10/29/2020): 1400MM Senior Unsecured Notes, Price at Issuance 99.936, Yielding 3.63%.

9. Baxter International Inc. (USD) 1.73% 4/1/2031 Reg S (10/29/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.906, Yielding 1.74%.

Additional Commentary

NEW ISSUANCE WATCH:  Boeing Co.  issued 4900 MM in notes.
Top Widening Loans Top Narrowing Loans
Tritech Software Systems (USD) TL2 L+750 08/31/2026
JC Penney Co. Inc. (USD) DD L+1175 11/15/2020
Mattress Firm (USD) TL EXIT 11/21/2022
Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023
Assystem (EUR) TLB E+425 09/28/2024
Distributed Power Inc. (USD) TLB L+325 11/02/2025
Asmodee (EUR) TL 10/22/2026
MFG / MRH (GBP) TL2 06/21/2026
Academy LTD (USD) TLB L+400 07/05/2022
Waterbridge Operating LLC (USD) TLB L+575 06/18/2026

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 10/30/2020
  • 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