BAD THINGS SEEM TO HAPPEN IN THREE’S. THE MARKETS FELL FOR THE THIRD DAY AS TECH STOCKS, THAT WERE ONCE HIGH FLYING, CAME CRASHING BACK TO EARTH. TESLA STOCK LOST 21% OF ITS MARKET CAP. 10 Year Treasury notes were down 3.7 bps. S&P -2.79%, Dow -2.25%, NASDAQ -4.11%.
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Market Summaries
North American Bond Research – September 8, 2020
Posted on September 8, 2020|
HIGH YIELD BOND RESEARCH
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September 8, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 27.7 MILLION+ CASES AND 900000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.5 MILLION+ CASES AND 194000+ 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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Micron Technology Inc. 4.663% 2/15/2030 Sprint Nextel Corp. 7.875% 9/15/2023 Petrobras Global Finance BV 6.85% 6/5/2115 Charter Communications Operating LLC 4.8% 3/1/2050 Cenovus Energy Inc. 5.375% 7/15/2025 Freeport-McMoRan Inc. 4.625% 8/1/2030 Cheniere Corpus Christi Hldgs LLC 5.125% 6/30/2027 Broadcom LTD 4.7% 4/15/2025 QVC Inc. 4.375% 9/1/2028 Lennar Corp. 2.95% 11/29/2020 |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
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(None Current 09/08/2020)
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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 |
| Hurtigruten Group AS (EUR) TLC E+800 06/16/2023 Deoleo SA (EUR) TL 06/24/2026 OVH Groupe (EUR) TLB E+325 11/29/2026 Casper Bidco (EUR) TL E+850 07/30/2027 Nets Hldgs AS (EUR) TL E+700 02/06/2027 |
EG Group (EUR) TL E+775 03/23/2026 Unifrax Corp. (USD) TLB L+375 12/14/2025 24 Hour Fitness Worldwide Inc. (USD) DIP DD L+1000 06/15/2021 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 Philadelphia Energy Solutions (USD) TL L+800 02/11/2022 |
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 09/08/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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September 8, 2020
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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 down 3.7 bps. S&P -0.76%, Dow -0.52%, NASDAQ -1.21%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 27.7 MILLION+ CASES AND 900000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.5 MILLION+ CASES AND 194000+ 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. 1.75% 8/21/2030 Goldman Sachs Group Inc. 3.85% 1/26/2027 CVS Health Corp. 3.7% 3/9/2023 CVS Health Corp. 4.3% 3/25/2028 Boeing Co. 5.805% 5/1/2050 Fortive Corp. 0.875% 2/15/2022 Takeda Pharmaceutical Co. LTD 2.05% 3/31/2030 General Electric Co. 4.35% 5/1/2050 Verizon Communications Inc. 4.125% 3/16/2027 Valero Energy Corp. 2.85% 4/15/2025 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
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(None Current 09/08/2020)
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Additional Commentary
NEW ISSUANCE WATCH: No new Issues.
| Top Widening Loans | Top Narrowing Loans |
| Hurtigruten Group AS (EUR) TLC E+800 06/16/2023 Deoleo SA (EUR) TL 06/24/2026 OVH Groupe (EUR) TLB E+325 11/29/2026 Casper Bidco (EUR) TL E+850 07/30/2027 Nets Hldgs AS (EUR) TL E+700 02/06/2027 |
EG Group (EUR) TL E+775 03/23/2026 Unifrax Corp. (USD) TLB L+375 12/14/2025 24 Hour Fitness Worldwide Inc. (USD) DIP DD L+1000 06/15/2021 Buzz Merger Sub LTD (USD) TLB L+275 01/29/2027 Philadelphia Energy Solutions (USD) TL L+800 02/11/2022 |
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 09/08/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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