EUROPEAN MARKETS LOWER AS DOLLAR IS LOWER AGAINST THE EURO. CORONA VIRUS IS SPIKING IN EUROPE. US MARKETS UP AS STIMULUS TALKS ARE STARTING TO SHOW MOVEMENT TO A RESOLUTION. 10 Year Treasury notes were up 3.2 bps. S&P +1.11%, Dow +1.5%, NASDAQ +1.02%.
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Market Summaries
North American Bond Research – September 30, 2020
Posted on September 30, 2020|
HIGH YIELD BOND RESEARCH
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September 30, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 34 MILLION+ CASES AND 1.02 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 7.4 MILLION+ CASES AND 211000+ 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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Oasis Petroleum Inc. 6.875% 3/15/2022 (1) Micron Technology Inc. 4.663% 2/15/2030 Encana Corp. 6.5% 8/15/2034 Goodyear Tire & Rubber Co. 5.125% 11/15/2023 Petrobras Global Finance BV 6.85% 6/5/2115 Chubb INA Hldgs Inc. 1.375% 9/15/2030 Howmet Aerospace Inc. 6.875% 5/1/2025 Continental Resources Inc. 4.375% 1/15/2028 Broadcom LTD 4.7% 4/15/2025 Newfield Exploration Co. 5.375% 1/1/2026 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. Spirit Aerosystems Inc. (USD) 5.5% 1/15/2025 144A (09/29/2020): 500MM First Lien Notes, Price at Issuance 100, Yielding 5.5%.
2. Spirit Aerosystems Inc. (USD) 5.5% 1/15/2025 Reg S (09/29/2020): 500MM First Lien Notes, Price at Issuance 100, Yielding 5.5%. 3. Acadia Healthcare (USD) 5% 4/15/2029 144A (09/29/2020): 475MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%. 4. Acadia Healthcare (USD) 5% 4/15/2029 Reg S (09/29/2020): 475MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%. |
1. Array Residential Services: $575MM TLB (B1/B+)
2. American Residential Services: $470MM TLB (B1/B) 3. Global Medical Response: $1.5B TL (B1/B) 4. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB 5. Alera Group: $300MM TLB (B2) 6. Wheelabrator Technologies Inc.: $1.3965B TLB 7. American Residential Services: $470MM TLB (B1/B) 8. Alera Group: $300MM TLB (B2) 9. Array Residential Services: $575MM TLB (B1/B+) 10. Vander-Bend Manufacturing Inc.: $197.5MM credit facilities: $20MM revolver; $177.5MM TLB |
Additional Commentary
NEW ISSUANCE WATCH: Acadia Healthcare issued 1000MM of Notes.
| Top Widening Loans | Top Narrowing Loans |
| DigiCert Inc. (USD) TL2 10/16/2027 Alorica (USD) TLA 06/30/2021 Oxbow Carbon & Minerals Hldg LLC (USD) TLA L+275 01/04/2022 Alorica (USD) TL L+375 06/30/2022 Tecomet Inc. (USD) TL L+350 05/01/2024 |
NCL Corp. LTD (USD) TLA L+150 01/02/2024 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 Tacala LLC (USD) TLB L+350 02/05/2027 Mavenir Inc. (USD) TLB L+600 05/08/2025 Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025 |
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 14 bp (basis points), as of 09/30/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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September 30, 2020
|
Bond Markets
EUROPEAN MARKETS LOWER AS DOLLAR IS LOWER AGAINST THE EURO. CORONA VIRUS IS SPIKING IN EUROPE. US MARKETS UP AS STIMULUS TALKS ARE STARTING TO SHOW MOVEMENT TO A RESOLUTION. 10 Year Treasury notes were up 3.2 bps. S&P +1.11%, Dow +1.5%, NASDAQ +1.02%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 34 MILLION+ CASES AND 1.02 MILLION DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 7.4 MILLION+ CASES AND 211000+ 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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Gilead Sciences Inc. 2.8% 10/1/2050 Cisco Systems Inc. 1.85% 9/20/2021 B.A.T. Capital Corp. 2.726% 3/25/2031 Gilead Sciences Inc. 2.6% 10/1/2040 Deutsche Bank AG VAR% 9/18/2031 Coca-Cola Co. 1% 3/15/2028 Quanta Services Inc. 2.9% 10/1/2030 Wells Fargo & Co. 2.879% 10/30/2030 Oracle Corp. 1.9% 9/15/2021 Coca-Cola Co. 1.375% 3/15/2031 |
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Danaher Corp. (USD) 2.6% 10/1/2050 (09/29/2020): 1000MM Senior Unsecured Notes, Price at Issuance 98.97, Yielding 2.65%.
2. BPCE SA (USD) VAR% 10/6/2026 144A (09/29/2020): 1350MM Senior Non Preferred Notes, Price at Issuance 100. 3. South Plains Financial Inc. (USD) VAR% 9/30/2030 (09/29/2020): 50MM Subordinated Notes, Price at Issuance 100. 4. South Plains Financial Inc. (USD) VAR% 9/30/2030 (09/29/2020): 50MM Subordinated Notes, Price at Issuance 100. 5. BPCE SA (USD) VAR% 10/6/2026 Reg S (09/29/2020): 1350MM Senior Non Preferred Notes, Price at Issuance 100. 6. Telus Corp. (CAD) 2.05% 10/7/2030 (09/29/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.793, Yielding 2.07%. 7. Sun Life Financial Inc. (CAD) VAR% 10/1/2035 (09/29/2020): 750MM Subordinated Notes, Price at Issuance 99.919. 8. Entergy Texas Inc. (USD) 1.75% 3/15/2031 (09/29/2020): 600MM First Lien Notes, Price at Issuance 99.63, Yielding 1.79%. 9. Best Buy Co. Inc. (USD) 1.95% 10/1/2030 (09/29/2020): 650MM Senior Unsecured Notes, Price at Issuance 99.612, Yielding 1.99%. 10. CubeSmart LP (USD) 2% 2/15/2031 (09/29/2020): 450MM Senior Unsecured Notes, Price at Issuance 99.074, Yielding 2.1%. |
Additional Commentary
NEW ISSUANCE WATCH: Danaher Corp. issued 1000MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| DigiCert Inc. (USD) TL2 10/16/2027 Alorica (USD) TLA 06/30/2021 Oxbow Carbon & Minerals Hldg LLC (USD) TLA L+275 01/04/2022 Alorica (USD) TL L+375 06/30/2022 Tecomet Inc. (USD) TL L+350 05/01/2024 |
NCL Corp. LTD (USD) TLA L+150 01/02/2024 Samsonite IP Holdings SARL (USD) TLA L+150 04/19/2023 Tacala LLC (USD) TLB L+350 02/05/2027 Mavenir Inc. (USD) TLB L+600 05/08/2025 Quorum Health Corp. (USD) TL EXIT L+825 04/29/2025 |
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 14bp (basis points), as of 09/30/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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