Advantage Data High Yield Bond Market Summary

Andrew Robartes

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Investment Grade Bond Research - July 12, 2019

Posted by Andrew Robartes on Jul 12, 2019 5:09:23 PM

THE YIELD GAP BETWEEN INVESTMENT GRADE and high yield corporate bonds is at its lowest since 2007. Just 60 basis points separate yields of the lowest-rated investment grade debt and the highest-rated high yield debt. As trends among corporate and government debt continue to point to economic downturn, many investors are selling riskier junk bonds. S&P +0.46%, DOW +0.90, NASDAQ +0.59%

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Topics: High Yield, Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, Finance, Fixed Income, News, Syndicated Bonds, syndicated, research, market update

High Yield Bond Research - July 12, 2019

Posted by Andrew Robartes on Jul 12, 2019 5:06:27 PM
THE YIELD GAP BETWEEN INVESTMENT GRADE  and high yield corporate bonds is at its   lowest since 2007. Just   60 basis points separate yields of the lowest-rated investment grade debt and the highest-rated high yield debt. As trends among corporate and government debt continue to point to economic downturn, many investors are   selling riskier junk bonds.   S&P  +0.46%,  DOW +0.90,   NASDAQ  +0.59%
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Topics: Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, News, Syndicated Bonds, syndicated, research, market update

Investment Grade Bond Research - July 8, 2019

Posted by Andrew Robartes on Jul 8, 2019 5:12:35 PM

U.S. STOCKS FELL TODAY, but all three major indices remain near record highs. Despite news of above-expected job growth in June, many investors anticipate an interest-rate cut at the end of the month, driving stock prices up. 10-Year Treasury yields fell 1.5 basis points as global investors continue to move into U.S. Government Bonds. S&P -0.48%, DOW -0.43%, NASDAQ -0.78%

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Topics: High Yield, Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, Finance, Fixed Income, News, Syndicated Bonds, syndicated, research, market update

High Yield Bond Research - July 8, 2019

Posted by Andrew Robartes on Jul 8, 2019 5:09:47 PM
U.S. STOCKS FELL TODAY, but all three major indices  remain near record highs. Despite news of above-expected job growth in June, many investors anticipate an interest-rate cut at the end of the month , driving stock prices up. 10-Year Treasury yields   fell 1.5 basis points  as global investors continue to move into U.S. Government Bonds. S&P -0.48%, DOW -0.43%, NASDAQ -0.78%.
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Topics: Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, News, Syndicated Bonds, syndicated, research, market update

Investment Grade Bond Research - July 5, 2019

Posted by Andrew Robartes on Jul 5, 2019 5:15:00 PM

THE U.S. ADDED 224,000 JOBS in June according the Department of Labor, surpassing the expected gain of 170,000. News of the report has eased economic worry and will likely affect the Federal Reserve’s decision to lower interest rates this month. As of now, some analysts predict a cut will happen later this year while others maintain there will be a 25-basis point cut at the end of the month. S&P -0.18%, DOW -0.16%, NASDAQ -0.10%.

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Topics: High Yield, Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, Finance, Fixed Income, News, Syndicated Bonds, syndicated, research, market update

High Yield Bond Research - July 5, 2019

Posted by Andrew Robartes on Jul 5, 2019 5:10:00 PM
THE U.S. ADDED 224,000 JOBS  in June according the  Department of Labor, surpassing the   expected gain of 170,000. News of the report has   eased economic worry  and will likely affect the Federal Reserve’s decision   to lower interest rates this month. As of now, some analysts predict a   cut will happen later   this year  while others maintain there will be a   25-basis point cut at the end of the month.   S&P -0.18%,  DOW -0.16%,  NASDAQ  -0.10%
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Topics: Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, News, Syndicated Bonds, syndicated, research, market update

Investment Grade Bond Research - June 21, 2019

Posted by Andrew Robartes on Jun 21, 2019 5:14:00 PM

TODAY MARKED THE END OF A STRONG WEEK for US stocks, after news of a potential federal interest rate cut boosted investors’ sentiment. Federal Reserve chairman Jerome Powell hasn’t set any parameters on the cut, but analysts are predicting it will be more than 25 basis points. The next monetary policy committee meeting will be held on July 31st. 10-Year Treasury note yields rose 3.5 basis pointstoday, after dipping below 2% yesterday. S&P -0.13%, DOW -0.13%, NASDAQ -0.24%.

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IN THE CORPORATE BOND SPACE, news of an interest rate cut from the Federal Reserve indicates a positive environment for issuing new debt. As Treasury yields have declined,   corporate bond spreads have remained relatively low, inspiring optimism among investors. John Sheehan, a fixed-income portfolio manager at Osterweis Capital Management stated, “In this environment, where financial assets are all moving in the same direction,  it’s incredibly beneficial to [debt] issuers”. ADI proprietary index data showed a net  yield increment for high-yield versus high-grade bonds. High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded, Pacific Gas & Electric Co. (USD) 3.5% 6/15/2025 made analysts' 'Conviction Buy' lists. (See the chart for   ADI Indices above.)  Andrew Robartes ( arobartes@advantagedata.com).
 
Key Gainers and Losers Volume Leaders
+   CVS Health Corp. 5.05% 3/25/2048 + 0.1%
  Pfizer Inc. 1.95% 6/3/2021 + 0.2%
-   Citigroup Inc. 4.65% 7/23/2048 -0.9%
  Verizon Communications Inc. 4.125% 3/16/2027 -0.2%
Tyson Foods Inc.   5.1% 9/28/2048
Comcast Corp.   4.7% 10/15/2048
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.17% 0.65% 2.89% 4.38% 8.30% 5.26%
Mining 0.39% 0.86% 2.12% 3.90% 8.33% 8.71%
Construction 0.10% 0.74% 2.54% 3.79% 5.99% 7.13%
Manufacturing 0.34% 0.80% 2.48% 4.14% 6.92% 7.63%
Transportion, Communication, Electric/Gas 0.38% 1.03% 2.96% 5.15% 8.67% 10.39%
Wholesale 0.26% 0.64% 2.13% 4.23% 7.64% 7.97%
Retail 0.37% 0.92% 2.63% 4.26% 7.55% 8.04%
Finance, Insurance, Real-Estate 0.22% 0.56% 1.91% 3.38% 6.26% 7.74%
Services 0.32% 0.79% 2.56% 4.19% 6.96% 8.31%
Public Administration 0.04% 0.23% 1.33% 2.21% 3.22% 5.03%
Energy 0.37% 0.80% 2.04% 3.84% 8.37% 10.53%
 
Total returns (non-annualized) by rating, market weighted.
New Issues New Issues [Continued]

1. Spirit Realty LP (USD) 4% 7/15/2029 (06/20/2019): 400MM Senior Unsecured Notes, Price at Issuance 99.924, Yielding 4.01%.

2. HCP Inc. (USD) 3.25% 7/15/2026 (06/20/2019): 650MM Senior Unsecured Notes, Price at Issuance 99.906, Yielding 3.26%.

 

Additional Commentary


NEW ISSUANCE WATCH: on 6/21/19 participants welcome a $165MM new corporate-bond offering by NorthShore Re LTD.  The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 6/14/19, with a net outflow of $1.7B, year-to-date $8.3B flowed into high-yield.
 
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Hertz Corp. (5Y Sen USD CR14)
Hovnanian Enterprises Inc. (5Y Sen USD MR14)
San Miguel Corp. (5Y Sen USD CR14)
Atmos Energy Corp. (5Y Sen USD MR14)

Loans and Credit Market Overview


SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:
  • Vidrala SA, Hilton Worldwide Finance LLC, US Renal Care Inc., Perforce Software Inc.
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 22 bp (basis points), as of 06/21/19
  • Net positive capital flows into high-yield ETFs & mutual funds

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Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

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Topics: High Yield, Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, Finance, Fixed Income, News, Syndicated Bonds, syndicated, research, market update

High Yield Bond Research - June 21, 2019

Posted by Andrew Robartes on Jun 21, 2019 5:09:56 PM
TODAY MARKED THE END OF A STRONG WEEK  for US stocks, after news of a  potential federal interest rate cut boosted investor s’  sentiment. Federal Reserve chairman Jerome Powell hasn’t set any parameters on the cut, but analysts are predicting it will be  more than 25 basis points. The next   monetary policy committee meeting  will be held on   July 31 st .  10-Year Treasury note yields rose   3. 5  basis points today, after   dipping below 2% yesterday. S&P -0.13%, DOW -0.13%, NASDAQ -0.24%.
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Topics: Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, News, Syndicated Bonds, syndicated, research, market update

Investment Grade Bond Research - May 29, 2019

Posted by Andrew Robartes on May 29, 2019 5:25:47 PM

U.S. STOCKS DECLINED AGAIN WEDNESDAY as trade worries continued and more investors moved into government bonds. The Treasury yield curve has reached its deepest inversion since 2007, with the 3-month yield topping the 10-year by almost 10 basis points. Amidst the yield curve predicting economic downturn, all three major indices fell today. S&P -0.69%, DOW -0.87%, NASDAQ -0.79%.

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Topics: High Yield, Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, Finance, Fixed Income, News, Syndicated Bonds, syndicated, research, market update

High Yield Bond Research - May 29, 2019

Posted by Andrew Robartes on May 29, 2019 5:21:11 PM
U.S. STOCKS DECLINED AGAIN WEDNESDAY  as trade worries continued and more investors moved into government bonds. The Treasury yield curve has reached its   deepest inversion since 2007, with the   3-month yield topping the 10-year by almost 10 basis points. Amidst the yield curve predicting economic downturn, all three major indices fell today. S&P -0.69%, DOW -0.87%, NASDAQ -0.79%.
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Topics: Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, News, Syndicated Bonds, syndicated, research, market update


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