EUROPEAN MARKETS WERE MIXED AND US MARKETS BOUNCED BACK AFTER YESTERDAY’S SELLOFF. PRESIDENT TRUMP REVERSED COURSE AND STATED HE WAS COMMITTED TO REACHING A STIMULUS DEAL. 10 Year Treasury notes were up 4.3 bps. S&P +1.74%, Dow +1.91%, NASDAQ +1.88%.
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Market Summaries
North American Bond Research – October 7, 2020
Posted on October 7, 2020|
HIGH YIELD BOND RESEARCH
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October 7, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 36.3 MILLION+ CASES AND 1.058 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 7.76 MILLION+ CASES AND 216000+ 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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Vale Overseas LTD 3.75% 7/8/2030 Petrobras Global Finance BV 6.85% 6/5/2115 T-Mobile USA Inc. 3.75% 4/15/2027 144A Pacific Gas & Electric Co. 4.55% 7/1/2030 Methanex Corp. 5.125% 10/15/2027 Western Digital Corp. 4.75% 2/15/2026 Centene Corp. 3% 10/15/2030 Communications Sales & Leasing Inc. 8.25% 10/15/2023 Ford Motor Co. 8.5% 4/21/2023 General Motors Financial Co. Inc. 4.375% 9/25/2021 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Twin River Worldwide Hldgs. Inc. (USD) 6.75% 6/1/2027 (10/06/2020): 125MM Senior Unsecured Notes, Price at Issuance 99.25, Yielding 6.89%.
2. H.B. Fuller Co. (USD) 4.25% 10/15/2028 (10/07/2020): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.25%. |
1. American Residential Services: $470MM TLB (B1/B)
2. Array Residential Services: $575MM TLB (B1/B+) 3. Fly Leasing LTD: $180MM TLB (Ba3/BBB-) 4. Maravai Lifesciences: $750MM credit facilities: $150MM revolver; $600MM TLB 5. Pae Holding Corp.: $890MM TLB (B2/B) 6. Quirch Foods LLC: $675MM credit facilities: $475MM TLB; $200MM revolver 7. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB 8. Wheelabrator Technologies Inc.: $1.3965B TLB 9. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB 10. Wheelabrator Technologies Inc.: $1.3965B TLB |
Additional Commentary
NEW ISSUANCE WATCH: H.B. Fuller Co. issued 300MM of Notes.
| Top Widening Loans | Top Narrowing Loans |
| Boardriders Inc. (USD) TLA L+800 10/23/2023 Hornbeck Offshore Services Inc. (USD) L+600 06/15/2023 Emerald Performance Materials (USD) TL L+400 08/12/2025 Precise Bidco BV (EUR) TL 12/31/2049 Mattress Firm (USD) TL EXIT 11/21/2022 |
Dubois Chemicals Inc. (USD) TL L+450 09/30/2026 Tacala LLC (USD) TLB L+350 02/05/2027 BioClinica Inc. (USD) TL L+825 10/06/2024 Imagina Media Audiovisual SL (EUR) TLA E+400 06/22/2025 Stubhub (EUR) TLB E+350 01/31/2027 |
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 14 bps (basis points), as of 10/07/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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October 7, 2020
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Bond Markets
EUROPEAN MARKETS WERE MIXED AND US MARKETS BOUNCED BACK AFTER YESTERDAY’S SELLOFF. PRESIDENT TRUMP REVERSED COURSE AND STATED HE WAS COMMITTED TO REACHING A STIMULUS DEAL. 10 Year Treasury notes were up 4.3 bps. S&P +1.74%, Dow +1.91%, NASDAQ +1.88%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 36.3 MILLION+ CASES AND 1.058 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 7.76 MILLION+ CASES AND 216000+ 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 Vale Overseas LTD 3.75% 7/8/2030 AT&T Inc. 2.25% 2/1/2032 Boeing Co. 5.15% 5/1/2030 BP Capital Markets PLC 3% 2/24/2050 Lowe’s Companies Inc. 5.125% 4/15/2050 Verizon Communications Inc. 4.329% 9/21/2028 CVS Health Corp. 4.78% 3/25/2038 CVS Health Corp. 4.3% 3/25/2028 General Electric Co. 4.35% 5/1/2050 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Athene Holding LTD (USD) 3.5% 1/15/2031 (10/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 98.535, Yielding 3.67%.
2. Standard Chartered PLC (USD) VAR% 10/14/2023 144A (10/06/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100. 3. John Deere Capital Corp. (USD) 0.4% 10/10/2023 (10/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.884, Yielding .44%. 4. MassMutual Global Funding II (USD) 1.55% 10/9/2030 144A (10/06/2020): 750MM Secured Notes, Price at Issuance 99.567, Yielding 1.6%. 5. WP Carey Inc. (USD) 2.4% 2/1/2031 (10/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.099, Yielding 2.5%. 6. Standard Chartered PLC (USD) FLT% 10/14/2023 144A (10/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 100. 7. THE Children’S Hospital Of Philadelphia (USD) 2.704% 7/1/2050 (10/06/2020): 500MM Secured Notes, Price at Issuance 100, Yielding 2.7%. 8. LYB Intl. Finance III LLC (USD) 3.625% 4/1/2051 (10/06/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.707, Yielding 3.64%. 9. LYB Intl. Finance III LLC (USD) 3.8% 10/1/2060 (10/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.166, Yielding 3.84%. 10. LYB Intl. Finance III LLC (USD) 2.25% 10/1/2030 (10/06/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.203, Yielding 2.34%. |
Additional Commentary
NEW ISSUANCE WATCH: Athene Holding LTD issued 500MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Boardriders Inc. (USD) TLA L+800 10/23/2023 Hornbeck Offshore Services Inc. (USD) L+600 06/15/2023 Emerald Performance Materials (USD) TL L+400 08/12/2025 Precise Bidco BV (EUR) TL 12/31/2049 Mattress Firm (USD) TL EXIT 11/21/2022 |
Dubois Chemicals Inc. (USD) TL L+450 09/30/2026 Tacala LLC (USD) TLB L+350 02/05/2027 BioClinica Inc. (USD) TL L+825 10/06/2024 Imagina Media Audiovisual SL (EUR) TLA E+400 06/22/2025 Stubhub (EUR) TLB E+350 01/31/2027 |
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 14 bps (basis points), as of 10/07/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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