880K+ WORKERS FILED FOR FIRST TIME UNEMPLOYMENT. AFTER HITTING RECORDS HIGHS YESTERDAY, MARKETS FALL LIKE A BRICK! IS WALL STREET FINALLY STARTING TO RECONCILE WITH MAIN STREET? 10 Year Treasury notes were down 2.9 bps. S&P -3.51%, Dow -2.78%, NASDAQ -4.97%.
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Market Summaries
North American Bond Research – September 3, 2020
Posted on September 3, 2020|
HIGH YIELD BOND RESEARCH
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September 3, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 26.3 MILLION+ CASES AND 871000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.3 MILLION+ CASES AND 191000+ 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. 3.75% 4/15/2027 144A Petrobras Global Finance BV 7.375% 1/17/2027 BAC Cap Trust X 5.63% 3/15/2043 Intl Lease Finance Corp. 8.625% 1/15/2022 Broadcom LTD 4.7% 4/15/2025 Xerox Corp. 3.625% 3/15/2023 AES Corp. 6% 5/15/2026 Macy’s Retail Hldg Inc. 4.375% 9/1/2023 Cemex Finance LLC 6% 4/1/2024 Reg S L Brands Inc. 5.25% 2/1/2028 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Spirit Loyalty Cayman LTD Spirit Ip Cayman LTD (USD) 8% 9/20/2025 144A (09/02/2020): 850MM First Lien Notes, Price at Issuance 98.976, Yielding 8.25%.
2. Spirit Loyalty Cayman LTD Spirit Ip Cayman LTD (USD) 8% 9/20/2025 Reg S (09/02/2020): 850MM First Lien Notes, Price at Issuance 98.976, Yielding 8.25%. |
1. Avianca : $1.3B DIP DD TLB
2. MAG Aerospace: $290.7MM TL (B3/B) 3. CJ Foods Inc.: $285MM TLB 4. Avianca : $1.3B DIP DD TLB 5. MAG Aerospace: $290.7MM TL (B3/B) 6. CJ Foods Inc.: $285MM TLB 7. Metronet : $100MM TLB 8. Avianca : $1.3B DIP DD TLB 9. MAG Aerospace: $290.7MM TL (B3/B) 10. CJ Foods Inc.: $285MM TLB |
Additional Commentary
NEW ISSUANCE WATCH: Spirit Loyalty Cayman LTD issued 850MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| Vacalians Holding SAS (EUR) TLB E+400 10/30/2025 Laird PLC (USD) TL L+450 05/04/2025 United Site Services Inc (USD) TL2 L+775 08/25/2025 Casper Bidco (EUR) TL E+850 07/30/2027 Philadelphia Energy Solutions (USD) TLA L+625 12/31/2022 |
Stena International SA (USD) TLB L+300 03/03/2021 Tacala LLC (USD) TLB L+350 02/05/2027 Wynn Resorts LTD. (USD) TL L+170 07/24/2025 DTZ US Borrower LLC (USD) TLB L+275 08/21/2025 Unifrax Corp. (USD) TLB L+375 12/14/2025 |
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 09/03/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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September 3, 2020
|
Bond Markets
880K+ WORKERS FILED FOR FIRST TIME UNEMPLOYMENT. AFTER HITTING RECORDS HIGHS YESTERDAY, MARKETS FALL LIKE A BRICK! IS WALL STREET FINALLY STARTING TO RECONCILE WITH MAIN STREET? 10 Year Treasury notes were down 2.9 bps. S&P -3.51%, Dow -2.78%, NASDAQ -4.97%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 26.3 MILLION+ CASES AND 871000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.3 MILLION+ CASES AND 191000+ 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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Bank of New York Mellon Corp. VAR% PERP Banner Health 2.338% 1/1/2030 Block Financial LLC 3.875% 8/15/2030 Lennox Intl Inc. 1.35% 8/1/2025 Magna Intl Inc. 3.625% 6/15/2024 CVS Health Corp. 4.3% 3/25/2028 Simon Property Group Inc. 2.65% 7/15/2030 Walgreens Boots Alliance Inc. 4.1% 4/15/2050 Anheuser-Busch Inbev Worldwide Inc. 5.55% 1/23/2049 Nvidia Corp. 3.5% 4/1/2050 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Mizuho Securities USA Inc. (USD) FLT% 9/27/2021 (09/02/2020): 75MM Senior Unsecured Notes, Price at Issuance 100.
2. Mondelez International Inc. (USD) 1.5% 2/4/2031 (09/02/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.302, Yielding 1.57%. 3. Mondelez International Inc. (USD) 2.625% 9/4/2050 (09/02/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.444, Yielding 2.65%. 4. Northwest Bancshares Inc. (USD) VAR% 9/15/2030 (09/02/2020): 125MM Subordinated Notes, Price at Issuance 100. 5. John Deere Financial LTD (CAD) 1.34% 9/8/2027 (09/02/2020): 350MM Senior Unsecured Notes, Price at Issuance 99.98, Yielding 1.34%. |
Additional Commentary
NEW ISSUANCE WATCH: Mizuho Securities USA Inc. 75MM issued in notes.
| Top Widening Loans | Top Narrowing Loans |
| Vacalians Holding SAS (EUR) TLB E+400 10/30/2025 Laird PLC (USD) TL L+450 05/04/2025 United Site Services Inc (USD) TL2 L+775 08/25/2025 Casper Bidco (EUR) TL E+850 07/30/2027 Philadelphia Energy Solutions (USD) TLA L+625 12/31/2022 |
Stena International SA (USD) TLB L+300 03/03/2021 Tacala LLC (USD) TLB L+350 02/05/2027 Wynn Resorts LTD. (USD) TL L+170 07/24/2025 DTZ US Borrower LLC (USD) TLB L+275 08/21/2025 Unifrax Corp. (USD) TLB L+375 12/14/2025 |
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 09/03/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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