Grid IconAll Posts Market Summaries

North American Bond Research – September 18, 2020

Posted on September 18, 2020
HIGH YIELD BOND RESEARCH
September 18, 2020
Bond Markets
GLOBAL MARKETS DOWN AND HAD A ROTTEN WEEK. SHORT SELLERS SEEM TO BE AIMING AT TECHNOLOGY TO CONTINUE DOWNWARD PRESSURE ON THE MARKETS. 10 Year Treasury notes were up 1 bps. S&P -1.12%, Dow -0.88%, NASDAQ -1.07%.

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 30.6 MILLION+ CASES AND 955000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 7 MILLION+ CASES AND 203000+ 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
+   Delta Airlines Inc. 2.6% 12/4/2020 +0.3%
  General Motors Co. 5.2% 4/1/2045 +2.0%
  L Brands Inc. 7.5% 6/15/2029 +0.1%
  Broadcom LTD 4.7% 4/15/2025 +0.1%
  Citigroup Inc. 5.95% PERP (1) +1.3%
–   Chubb INA Hldgs Inc. 1.375% 9/15/2030 -0.1%
  Pacific Gas & Electric Co. 4.55% 7/1/2030 -0.2%
  T-Mobile USA Inc. 3.875% 4/15/2030 144A -0.2%
  Crown Castle Intl Corp. 5.25% 1/15/2023 -0.1%
  Oasis Petroleum Inc. 6.875% 3/15/2022 (1) -4.9%
Delta Airlines Inc.   2.6% 12/4/2020
General Motors Co.   5.2% 4/1/2045
Chubb INA Hldgs Inc.   1.375% 9/15/2030
Pacific Gas & Electric Co.   4.55% 7/1/2030
T-Mobile USA Inc.   3.875% 4/15/2030 144A
Oasis Petroleum Inc.   6.875% 3/15/2022 (1)
Crown Castle Intl Corp.   5.25% 1/15/2023
Ball Corp.   2.875% 8/15/2030
JBS Investments GmbH   5.75% 7/30/2028 Reg S
L Brands Inc.   7.5% 6/15/2029
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.02% -0.11% 0.10% 3.75% 5.54% 8.69%
Mining 0.10% -0.74% 1.15% 4.71% -6.31% -7.11%
Construction -0.02% 0.33% 5.08% 5.25% 5.14% 7.89%
Manufacturing -0.07% 0.20% 0.57% 3.69% 2.85% 6.89%
Transportion, Communication, Electric/Gas -0.05% 0.07% 0.55% 2.50% 3.85% 6.12%
Wholesale -0.06% 0.02% -0.87% 1.87% 2.12% 5.18%
Retail -0.07% 0.34% 2.21% 5.58% 2.17% 4.98%
Finance, Insurance, Real-Estate -0.06% 0.21% 1.47% 4.10% 1.74% 4.38%
Services -0.05% 0.29% 1.46% 3.83% 2.78% 5.78%
Public Administration -0.16% 0.68% 2.08% 6.57% 7.94% 11.17%
Energy 0.06% -0.80% -1.03% 2.50% -8.89% -5.78%
 
Total returns (non-annualized) by rating, market weighted.

New Issues Forward Calendar
1. Vivo Energy Investment (USD) 5.125% 9/24/2027 144A (09/17/2020): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%.

2. Oppenheimer Hldgs Inc. (USD) 5.5% 10/1/2025 144A (09/17/2020): 125MM First Lien Notes, Price at Issuance 100, Yielding 5.5%.

3. Reynolds Group (USD) 4% 10/15/2027 144A (09/17/2020): 1000MM Secured Notes, Price at Issuance 100, Yielding 4%.

4. Michaels Stores Inc. (USD) 4.75% 10/1/2027 Reg S (09/17/2020): 375MM Secured Notes, Price at Issuance 100, Yielding 4.75%.

5. Alliance Data Systems Corp. (USD) 7% 1/15/2026 Reg S (09/17/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7%.

6. Alliance Data Systems Corp. (USD) 7% 1/15/2026 144A (09/17/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7%.

7. Methanex Corp. (USD) 5.125% 10/15/2027 (09/17/2020): 700MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.13%.

8. First Quantum Minerals LTD (USD) 6.875% 10/15/2027 144A (09/17/2020): 1500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.88%.

9. Michaels Stores Inc. (USD) 4.75% 10/1/2027 144A (09/17/2020): 375MM Secured Notes, Price at Issuance 100, Yielding 4.75%.

10. Reynolds Group (USD) 4% 10/15/2027 Reg S (09/17/2020): 1000MM Secured Notes, Price at Issuance 100, Yielding 4%.

 1. Omnitracs LLC: $355MM TLs: $160MM TL (B2/B-); $195MM TL (Caa2/CCC)

2. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB

3. MAG Aerospace: $290.7MM TL (B3/B)

4. EFS Cogen Holdings LLC: $1.05B credit facilities: $100MM revolver (Ba2/BB-); $950MM TLB (Ba3/BB-)

5. ECI Software Solutions: $990MM TLs: $710MM TL (B2/B-); $280MM TL (Caa2/CCC)

6. Amwins Group Inc.: $100MM TLB (Ba3/B+)

7. Allegro Microsystems Inc.: $325MM TL

8. Michaels Cos Inc.: $1.62B TLB (B+)

9. Allegro Microsystems Inc.: $325MM TL

10. Amwins Group Inc.: $100MM TLB (Ba3/B+)
Additional Commentary
NEW ISSUANCE WATCH:  Vivo Energy Investment issued 350MM in notes
Top Widening Loans Top Narrowing Loans
NCL Corp. LTD (USD) TLA L+150 01/02/2024
Wittur (EUR) TL E+850 09/19/2027
Archroma Global Services (USD) TLB2 L+425 07/11/2024
24 Hour Fitness Worldwide Inc. (USD) DIP DD L+1000 06/16/2021
Kirk Beauty Zero GmbH (EUR) RC E+375 12/26/2021		 Distributed Power Inc. (USD) TLB L+325 11/02/2025
Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026
Stubhub (USD) TLB L+350 02/13/2027
Nets Hldgs AS (NOK) TLB1N L+400 02/06/2025

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 15 bp (basis points), as of 09/18/2020
  • Net negative capital flows into high-yield ETFs & mutual funds

 

INVESTMENT GRADE BOND RESEARCH
September 18, 2020
Bond Markets
GLOBAL MARKETS DOWN AND HAD A ROTTEN WEEK. SHORT SELLERS SEEM TO BE AIMING AT TECHNOLOGY TO CONTINUE DOWNWARD PRESSURE ON THE MARKETS. 10 Year Treasury notes were up 1 bps. S&P -1.12%, Dow -0.88%, NASDAQ -1.07%..

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 30.6 MILLION+ CASES AND 955000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 7 MILLION+ CASES AND 203000+ 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
+   Flowserve Corp. 3.5% 10/1/2030 +0.1%
  GE Capital Intl. Funding Co. 4.418% 11/15/2035 +0.7%
  JPMorgan Chase & Co. 2.522% 4/22/2031 +0.1%
  Shell Intl Finance BV 3.25% 4/6/2050 +0.6%
  GlaxoSmithKline Capital PLC 2.875% 6/1/2022 +0.1%
–   Ares Capital Corp. 3.875% 1/15/2026 -0.3%
  CVS Health Corp. 5.05% 3/25/2048 -0.0%
  Royal Bank of Canada 1.6% 4/17/2023 -0.0%
  Coca-Cola Co. 2.5% 3/15/2051 -0.5%
  General Motors Co. 6.8% 10/1/2027 -0.3%
Flowserve Corp.   3.5% 10/1/2030
Ares Capital Corp.   3.875% 1/15/2026
CVS Health Corp.   5.05% 3/25/2048
GE Capital Intl. Funding Co.   4.418% 11/15/2035
Royal Bank of Canada   1.6% 4/17/2023
Coca-Cola Co.   2.5% 3/15/2051
JPMorgan Chase & Co.   2.522% 4/22/2031
Oracle Corp.   3.6% 4/1/2050
General Motors Co.   6.8% 10/1/2027
Shell Intl Finance BV   3.25% 4/6/2050
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Mining 0.08% 0.12% 0.35% 3.32% 5.75% 7.59%
Construction 0.06% 0.26% 0.41% 3.92% 6.92% 9.00%
Manufacturing 0.05% 0.28% 0.58% 2.67% 7.54% 9.64%
Transportion, Communication, Electric/Gas 0.09% 0.34% 0.22% 2.92% 8.72% 11.06%
Wholesale 0.07% 0.28% 0.67% 2.68% 7.11% 10.28%
Retail 0.03% 0.35% 0.07% 2.13% 8.51% 11.13%
Finance, Insurance, Real-Estate 0.02% 0.14% 0.31% 2.10% 6.30% 8.30%
Services 0.06% 0.27% 0.66% 2.69% 6.91% 8.74%
Public Administration 0.01% -0.03% 0.30% 0.57% 5.05% 5.28%
Energy 0.08% 0.13% -0.27% 2.61% 4.82% 7.08%
 
Total returns (non-annualized) by rating, market weighted.

New Issues New Issues [Continued]
1. Sharp Healthcare (USD) 2.68% 8/1/2050 (09/17/2020): 300MM Unsecured Notes, Price at Issuance 100, Yielding 2.68%.

2. Duquesne Light Holdings Inc. (USD) 2.532% 10/1/2030 Reg S (09/17/2020): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.53%.

3. Duquesne Light Holdings Inc. (USD) 2.532% 10/1/2030 144A (09/17/2020): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.53%.

4. Vancouver Airport Authority (CAD) 2.8% 9/21/2050 (09/17/2020): 350MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.8%.

5. Athene Global Funding (CAD) 2.1% 9/24/2025 (09/17/2020): 500MM Secured Notes, Price at Issuance 99.877, Yielding 2.13%.

6. Emerson Electric Co. (USD) 0.875% 10/15/2026 (09/17/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.712, Yielding .92%.

7. Quanta Services Inc. (USD) 2.9% 10/1/2030 (09/17/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.663, Yielding 2.94%.

8. EDP Finance BV (USD) 1.71% 1/24/2028 144A (09/17/2020): 850MM Senior Unsecured Notes, Price at Issuance 99.96, Yielding 1.72%.

9. Brown & Brown Inc. (USD) 2.375% 3/15/2031 (09/17/2020): 700MM Senior Unsecured Notes, Price at Issuance 99.89, Yielding 2.39%.

10. Cooperatieve Rabobank U.A. (USD) 1.004% 9/24/2026 144A (09/17/2020): 1000MM Senior Non Preferred Notes, Price at Issuance 100, Yielding 1%.
Additional Commentary
NEW ISSUANCE WATCH: Sharp Healthcare issued 300MM in notes.
Top Widening Loans Top Narrowing Loans
NCL Corp. LTD (USD) TLA L+150 01/02/2024
Wittur (EUR) TL E+850 09/19/2027
Archroma Global Services (USD) TLB2 L+425 07/11/2024
24 Hour Fitness Worldwide Inc. (USD) DIP DD L+1000 06/16/2021
Kirk Beauty Zero GmbH (EUR) RC E+375 12/26/2021		 Distributed Power Inc. (USD) TLB L+325 11/02/2025
Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023
Aimbridge Hospitality LLC (USD) TLB L+375 02/01/2026
Stubhub (USD) TLB L+350 02/13/2027
Nets Hldgs AS (NOK) TLB1N L+400 02/06/2025

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 15 bp (basis points), as of 09/18/2020
  • 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