MARKETS DOWN AS US UNEMPLOYMENT RATE FELL TO 8.4% AS THE US ADDED 1.4 MILLION JOBS. AUGUST EMPLOYMENT IS STILL 11.5 MILLION JOBS LESS THAN FEBRUARY JOB FIGURES. LABOR PARTICIPATION IS STILL BELOW CONSENSUS. U6 EMPLOYMENT FIGURES PAINT A 14.6% UNEMPLOYMENT RATE, UNDERSCORING MAIN STREETS TROUBLES. 10 Year Treasury notes were up 9.9 bps. S&P -0.76%, Dow -0.52%, NASDAQ -1.21%.
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Market Summaries
North American Bond Research – September 4, 2020
Posted on September 4, 2020|
HIGH YIELD BOND RESEARCH
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September 4, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 26.7 MILLION+ CASES AND 877000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.4 MILLION+ CASES AND 192000+ 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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Macy’s Retail Hldg Inc. 4.375% 9/1/2023 L Brands Inc. 7.5% 6/15/2029 Pacific Gas & Electric Co. 4% 12/1/2046 BAC Cap Trust X 5.63% 3/15/2043 Centene Corp. 3.375% 2/15/2030 General Motors Co. 6.25% 10/2/2043 Teva Pharmaceutical Industries LTD 2.2% 7/21/2021 Telecom Italia Capital SA 6% 9/30/2034 Kraft Heinz Co. 4.375% 6/1/2046 (2) Citigroup Inc. 6.125% PERP |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
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(None Current 09/04/2020)
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1. Avianca : $1.3B DIP DD TLB
2. MAG Aerospace: $290.7MM TL (B3/B) 3. CJ Foods Inc.: $285MM TLB 4. Milano Acquisition Corp.: $3.2B of term loans: $2.4B covenant-lite TLB (B2/B+); $800MM privately placed TL 5. MAG Aerospace: $290.7MM TL (B3/B) 6. CJ Foods Inc.: $285MM TLB 7. Avianca : $1.3B DIP DD 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: No New Issues.
| Top Widening Loans | Top Narrowing Loans |
| Casper Bidco (EUR) TL E+850 07/30/2027 Wynn Resorts LTD. (USD) TL L+170 07/24/2025 CPM Holdings Inc. (USD) TL2 L+825 11/16/2026 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 BCA Marketplace PLC (GBP) TL L+825 09/04/2027 |
Deoleo SA (EUR) TL 06/24/2026 Distributed Power Inc. (USD) TLB L+325 11/02/2025 StandardAero (USD) TL L+350 04/08/2026 Ball Corp. (USD) TLA L+150 03/21/2024 Stubhub (USD) TLB L+350 02/13/2027 |
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 15 bp (basis points), as of 09/04/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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September 4, 2020
|
Bond Markets
MARKETS DOWN AS US UNEMPLOYMENT RATE FELL TO 8.4% AS THE US ADDED 1.4 MILLION JOBS. AUGUST EMPLOYMENT IS STILL 11.5 MILLION JOBS LESS THAN FEBRUARY JOB FIGURES. LABOR PARTICIPATION IS STILL BELOW CONSENSUS. U6 EMPLOYMENT FIGURES PAINT A 14.6% UNEMPLOYMENT RATE, UNDERSCORING MAIN STREETS TROUBLES. 10 Year Treasury notes were up 9.9 bps. S&P -0.76%, Dow -0.52%, NASDAQ -1.21%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 26.7 MILLION+ CASES AND 877000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.4 MILLION+ CASES AND 192000+ 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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CVS Health Corp. 5.05% 3/25/2048 Exxon Mobil Corp. 1.571% 4/15/2023 Lloyds Banking Group PLC 2.858% 3/17/2023 JP Morgan Chase & Co. 4.6% PERP Prudential Financial Inc. 3.935% 12/7/2049 Roper Technologies Inc. 1% 9/15/2025 Bank of America Corp. 1.898% 7/23/2031 AT&T Inc. 3.5% 2/1/2061 Boeing Co. 5.15% 5/1/2030 AT&T Inc. 5.7% 3/1/2057 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. ECN Capital Corp. (CAD) 6% 12/31/2035 (09/03/2020): 75MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6%. |
Additional Commentary
NEW ISSUANCE WATCH: ECN Capital Corp. 75MM issued in notes.
| Top Widening Loans | Top Narrowing Loans |
| Casper Bidco (EUR) TL E+850 07/30/2027 Wynn Resorts LTD. (USD) TL L+170 07/24/2025 CPM Holdings Inc. (USD) TL2 L+825 11/16/2026 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 BCA Marketplace PLC (GBP) TL L+825 09/04/2027 |
Deoleo SA (EUR) TL 06/24/2026 Distributed Power Inc. (USD) TLB L+325 11/02/2025 StandardAero (USD) TL L+350 04/08/2026 Ball Corp. (USD) TLA L+150 03/21/2024 Stubhub (USD) TLB L+350 02/13/2027 |
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 15 bp (basis points), as of 09/04/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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