MARKETS GO DOWN AS US REPORTED STUBBORNLY HIGH FIRST TIME UNEMPLOYMENT CLAIMS OF 857K. THE RECOVERY IS LOOKING TO BE LONG AND SLOW. ON THE VACCINE FRONT THE OXFORD TRIAL HAD TO BE PUT ON HOLD DUE TO TOXIC REACTION TO THE VACCINE. THE BUXX DOLLAR INDEX ROSE TO 88.49. 10 Year Treasury notes were down 1.8 bps. S&P -1.76%, Dow -1.45%, NASDAQ -1.99%.
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Market Summaries
North American Bond Research – September 10, 2020
Posted on September 10, 2020|
HIGH YIELD BOND RESEARCH
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September 10, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 28.25 MILLION+ CASES AND 912000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.6 MILLION+ CASES AND 195000+ 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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T-Mobile USA Inc. 3.875% 4/15/2030 144A Pacific Gas & Electric Co. 4% 12/1/2046 Ford Motor Co. 5.291% 12/8/2046 Vale Overseas LTD 3.75% 7/8/2030 HCA Inc. 4.75% 5/1/2023 Apache Corp. 4.875% 11/15/2027 Nabors Industries LTD 4.625% 9/15/2021 (1) Pacific Gas & Electric Co. 4.95% 7/1/2050 Broadcom LTD 4.11% 9/15/2028 TreeHouse Foods Inc. 4% 9/1/2028 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Weekley Homes LLC (USD) 4.875% 9/15/2028 144A (09/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%.
2. Weekley Homes LLC (USD) 4.875% 9/15/2028 Reg S (09/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%. 3. Quicken Loans Inc. (USD) 3.875% 3/1/2031 144A (09/09/2020): 1250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 4. Quicken Loans Inc. (USD) 3.875% 3/1/2031 Reg S (09/09/2020): 1250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.88%. 5. Quicken Loans Inc. (USD) 3.625% 3/1/2029 144A (09/09/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.63%. 6. Quicken Loans Inc. (USD) 3.625% 3/1/2029 Reg S (09/09/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.63%. 7. US Concrete Inc. (USD) 5.125% 3/1/2029 144A (09/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%. 8. US Concrete Inc. (USD) 5.125% 3/1/2029 Reg S (09/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%. 9. Ken Garff Automotive LLC (USD) 4.875% 9/15/2028 144A (09/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%. 10. Ken Garff Automotive LLC (USD) 4.875% 9/15/2028 Reg S (09/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%. |
1. MAG Aerospace: $290.7MM TL (B3/B)
2. RCN Grande: $1.19B TLB 3. Avianca : $1.3B DIP DD TLB 4. CJ Foods Inc.: $285MM TLB 5. MAG Aerospace: $290.7MM TL (B3/B) 6. CJ Foods Inc.: $285MM TLB 7. Milano Acquisition Corp.: $3.2B of term loans: $2.4B covenant-lite TLB (B2/B+); $800MM privately placed TL 8. Avianca : $1.3B DIP DD TLB 9. MAG Aerospace: $290.7MM TL (B3/B) 10. Avianca : $1.3B DIP DD TLB |
Additional Commentary
NEW ISSUANCE WATCH: Quicken Loans Inc. issued 1250MM in notes
| Top Widening Loans | Top Narrowing Loans |
| Casper Bidco (EUR) TL E+850 07/30/2027 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 United Site Services Inc (USD) TL2 L+775 08/25/2025 BCA Marketplace PLC (GBP) TL L+825 09/04/2027 Jazz Securities LTD (USD) TLA 06/07/2023 |
Distributed Power Inc. (USD) TLB L+325 11/02/2025 Valeo Foods Group LTD (EUR) TLB E+450 08/27/2027 WestJet Airlines LTD (USD) TL L+300 12/11/2026 Tacala LLC (USD) TLB L+350 02/05/2027 DigiCert Inc. (USD) TL2 10/16/2027 |
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 bp (basis points), as of 09/10/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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September 10, 2020
|
Bond Markets
MARKETS GO DOWN AS US REPORTED STUBBORNLY HIGH FIRST TIME UNEMPLOYMENT CLAIMS OF 857K. THE RECOVERY IS LOOKING TO BE LONG AND SLOW. ON THE VACCINE FRONT THE OXFORD TRIAL HAD TO BE PUT ON HOLD DUE TO TOXIC REACTION TO THE VACCINE. THE BUXX DOLLAR INDEX ROSE TO 88.49. 10 Year Treasury notes were down 1.8 bps. S&P -1.76%, Dow -1.45%, NASDAQ -1.99%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 28 MILLION+ CASES AND 906000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.55 MILLION+ CASES AND 195000+ 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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Valero Energy Corp. 2.85% 4/15/2025 Shell Intl Finance BV 2.75% 4/6/2030 Verizon Communications Inc. 4.522% 9/15/2048 Apple Inc. 2.55% 8/20/2060 Dollar Tree Stores Inc. 3.7% 5/15/2023 CVS Health Corp. 1.75% 8/21/2030 Citigroup Inc. 3.106% 4/8/2026 Oracle Corp. 3.6% 4/1/2050 Alphabet Inc. 2.25% 8/15/2060 Molson Coors Brewing Co. 2.1% 7/15/2021 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. O’Reilly Automotive Inc. (USD) 1.75% 3/15/2031 (09/09/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.544, Yielding 1.8%.
2. Schlumberger Finance Canada (USD) 1.4% 9/17/2025 (09/09/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.88, Yielding 1.42%. 3. DNB Bank ASA (USD) 1.127% 9/16/2026 144A (09/09/2020): 1000MM Senior Non Preferred Notes, Price at Issuance 100, Yielding 1.13%. 4. Life Storage Inc. (USD) 2.2% 10/15/2030 (09/09/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.524, Yielding 2.25%. 5. Duke Energy Corp. (USD) 0.9% 9/15/2025 (09/09/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.951, Yielding .91%. 6. Fresenius Medical Care US Finance Inc. (USD) 2.375% 2/16/2031 144A (09/09/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.699, Yielding 2.41%. 7. Fresenius Medical Care US Finance Inc. (USD) 2.375% 2/16/2031 Reg S (09/09/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.699, Yielding 2.41%. 8. Masco Corp. (USD) 2% 10/1/2030 (09/09/2020): 300MM Senior Unsecured Notes, Price at Issuance 99.927, Yielding 2.01%. 9. Toronto-Dominion Bank (USD) 0.45% 9/11/2023 (09/09/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.857, Yielding .5%. 10. JPMorgan Chase & Co. (USD) VAR% 9/16/2024 (09/09/2020): 1000MM Senior Unsecured Notes, Price at Issuance 100. |
Additional Commentary
NEW ISSUANCE WATCH: O’Reilly Automotive Inc. issued 500MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Casper Bidco (EUR) TL E+850 07/30/2027 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 United Site Services Inc (USD) TL2 L+775 08/25/2025 BCA Marketplace PLC (GBP) TL L+825 09/04/2027 Jazz Securities LTD (USD) TLA 06/07/2023 |
Distributed Power Inc. (USD) TLB L+325 11/02/2025 Valeo Foods Group LTD (EUR) TLB E+450 08/27/2027 WestJet Airlines LTD (USD) TL L+300 12/11/2026 Tacala LLC (USD) TLB L+350 02/05/2027 DigiCert Inc. (USD) TL2 10/16/2027 |
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 bp (basis points), as of 09/10/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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