MARKETS BOUNCE BACK AFTER THREE DAYS OF HEAVY LOSES. TESLA WAS UP 10% AFTER LOSING 21% YESTERDAY. INVESTORS WONDER IF THIS SLIDE IS OVER OR IS THIS A DEAD CAT BOUNCING? 10 Year Treasury notes were up 1.9 bps. S&P +2.01%, Dow +1.6%, NASDAQ +2.71%.
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Market Summaries
North American Bond Research – September 9, 2020
Posted on September 9, 2020|
HIGH YIELD BOND RESEARCH
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September 9, 2020
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Bond Markets
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 28 MILLION+ CASES AND 906000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.55 MILLION+ CASES AND 195000+ 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. 3.875% 4/15/2030 144A Bahia SUL Hldgs Gmbh 5.75% 7/14/2026 Vale Overseas LTD 3.75% 7/8/2030 Petrobras Global Finance BV 7.375% 1/17/2027 Azul Investments LLP 5.875% 10/26/2024 Reg S Petrobras Global Finance BV 6.85% 6/5/2115 Sally Hldg LLC 5.625% 12/1/2025 Micron Technology Inc. 5.327% 2/6/2029 Petrobras Global Finance BV 8.75% 5/23/2026 Goldman Sachs Group Inc. 5% PERP |
| Industry Returns Tracker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | Forward Calendar |
|---|---|
| 1. TEGNA Inc. (USD) 4.75% 3/15/2026 144A (09/08/2020): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%.
2. TEGNA Inc. (USD) 4.75% 3/15/2026 Reg S (09/08/2020): 550MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%. 3. CNX Resources Corp. (USD) 7.25% 3/14/2027 (09/08/2020): 200MM Senior Unsecured Notes, Price at Issuance 103.5, Yielding 6.58%. 4. NuStar Logistics LP (USD) 5.75% 10/1/2025 (09/09/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%. 5. NuStar Logistics LP (USD) 6.375% 10/1/2030 (09/09/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.38%. |
1. MAG Aerospace: $290.7MM TL (B3/B)
2. RCN Grande: $1.19B TLB 3. Avianca : $1.3B DIP DD TLB 4. CJ Foods Inc.: $285MM TLB 5. MAG Aerospace: $290.7MM TL (B3/B) 6. CJ Foods Inc.: $285MM TLB 7. Milano Acquisition Corp.: $3.2B of term loans: $2.4B covenant-lite TLB (B2/B+); $800MM privately placed TL 8. Avianca : $1.3B DIP DD TLB 9. MAG Aerospace: $290.7MM TL (B3/B) 10. Avianca : $1.3B DIP DD TLB |
Additional Commentary
NEW ISSUANCE WATCH: TEGNA Inc. issued 550MM in notes
| Top Widening Loans | Top Narrowing Loans |
| TMF Group Hldg B.V. (EUR) TL2 E+687.5 06/08/2026 Cast & Crew Payroll LLC (USD) TLB L+375 02/07/2026 Wittur (EUR) TL E+850 09/19/2027 Valeo Foods Group LTD (EUR) TLB E+450 08/27/2027 Perstorp Hldg AB (USD) TLB L+475 04/05/2026 |
Ranpak Inc. (EUR) TL E+325 10/01/2021 BCA Marketplace PLC (GBP) TL L+825 09/04/2027 Aptean Inc. (USD) TL L+425 04/24/2026 Distributed Power Inc. (USD) TLB L+325 11/02/2025 Valeo Foods Group LTD (GBP) TL L+850 08/27/2028 |
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 09/09/2020
- Net negative capital flows into high-yield ETFs & mutual funds
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INVESTMENT GRADE BOND RESEARCH
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September 9, 2020
|
Bond Markets
MARKETS BOUNCE BACK AFTER THREE DAYS OF HEAVY LOSES. TESLA WAS UP 10% AFTER LOSING 21% YESTERDAY. INVESTORS WONDER IF THIS SLIDE IS OVER OR IS THIS A DEAD CAT BOUNCING? 10 Year Treasury notes were up 1.9 bps. S&P +2.01%, Dow +1.6%, NASDAQ +2.71%.
CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 28 MILLION+ CASES AND 906000+ DEATHS. IN THE UNITED STATES THE CORONAVIRUS COUNT IS 6.55 MILLION+ CASES AND 195000+ 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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Honeywell Intl. Inc. 0.483% 8/19/2022 Alphabet Inc. 2.25% 8/15/2060 Eli Lilly & Co. 2.5% 9/15/2060 Dupont de Nemours Inc. 2.169% 5/1/2023 Valero Energy Corp. 2.85% 4/15/2025 Regeneron Pharmaceuticals Inc. 1.75% 9/15/2030 Home Depot Inc. 2.7% 4/15/2030 Oracle Corp. 3.6% 4/1/2050 Oracle Corp. 3.85% 4/1/2060 Dow Chemical Co. 3.6% 11/15/2050 |
| Industry Returns Tracker | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| New Issues | New Issues [Continued] |
|---|---|
| 1. Kimberly-Clark Corp. (USD) 1.05% 9/15/2027 (09/08/2020): 600MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.05%.
2. Unilever Cap Corp. (USD) 1.375% 9/14/2030 (09/08/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.935, Yielding 1.38%. 3. Mitsubishi UFJ Financial Group Inc. (USD) VAR% 9/15/2024 (09/08/2020): 1500MM Senior Unsecured Notes, Price at Issuance 100. 4. Nestle Holdings Inc. (USD) 1.25% 9/15/2030 144A (09/08/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.216, Yielding 1.33%. 5. Arizona Public Service (USD) 2.65% 9/15/2050 (09/08/2020): 400MM Senior Unsecured Notes, Price at Issuance 99.609, Yielding 2.67%. 6. Johnson Controls International PLC (USD) 1.75% 9/15/2030 (09/08/2020): 625MM Senior Unsecured Notes, Price at Issuance 99.689, Yielding 1.78%. 7. Nestle Holdings Inc. (USD) 1% 9/15/2027 144A (09/08/2020): 1100MM Senior Unsecured Notes, Price at Issuance 99.845, Yielding 1.02%. 8. Entergy Arkansas LLC (USD) 2.65% 6/15/2051 (09/08/2020): 675MM Secured Notes, Price at Issuance 99.605, Yielding 2.67%. 9. Unilever Cap Corp. (USD) 0.375% 9/14/2023 (09/08/2020): 500MM Senior Unsecured Notes, Price at Issuance 99.872, Yielding .42%. 10. Valero Energy Corp. (USD) 2.15% 9/15/2027 (09/08/2020): 600MM Senior Unsecured Notes, Price at Issuance 99.87, Yielding 2.17%. |
Additional Commentary
NEW ISSUANCE WATCH: Kimberly-Clark Corp. issued 600MM in notes.
| Top Widening Loans | Top Narrowing Loans |
| TMF Group Hldg B.V. (EUR) TL2 E+687.5 06/08/2026 Cast & Crew Payroll LLC (USD) TLB L+375 02/07/2026 Wittur (EUR) TL E+850 09/19/2027 Valeo Foods Group LTD (EUR) TLB E+450 08/27/2027 Perstorp Hldg AB (USD) TLB L+475 04/05/2026 |
Ranpak Inc. (EUR) TL E+325 10/01/2021 BCA Marketplace PLC (GBP) TL L+825 09/04/2027 Aptean Inc. (USD) TL L+425 04/24/2026 Distributed Power Inc. (USD) TLB L+325 11/02/2025 Valeo Foods Group LTD (GBP) TL L+850 08/27/2028 |
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 09/09/2020
- Net positive capital flows into high-yield ETFs & mutual funds
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