STOCKS ROSE FOR THE THIRD STRAIGHT DAY behind strong earnings from Walmart and Cisco Systems. Troy Gayeski of SkyBridge Capital states, “The U.S. consumer is in exceptional shape, and Walmart’s results reinforce that view”. All three major indices settled about where they started at the beginning of the week, showing resilience in the equities market. Crude Oil rose 1.69%. S&P +0.89%, Dow +0.84%, NASDAQ +0.97%.

 

IN THE CORPORATE BOND MARKET, Transocean Ltd. priced $525 million in senior unsecured notesdue 2023. The notes, which will have an interest rate of 5.375%, will be guaranteed by Transocean Ltd., its parent company Transocean Inc., and other wholly owned subsidiaries. The proceeds from the bonds will be used for general corporate purposes. Treasuries fell then rose today, with improved overall sentiment regarding the economy, settling up 2.4 basis points as of 4 P.M. Eastern Time. 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, CenturyLink Inc. (USD) 5.625% 4/1/2025 made analysts' 'Conviction Buy' lists. (See the chart for CenturyLink Inc. (USD) 5.625% 4/1/2025 below.) Andrew Robartes (arobartes@advantagedata.com).

 

Key Gainers and Losers	Volume Leaders
+   United States STL Corp. New 6.25% 3/15/2026 + 1.4%   Western Digital Corp. 4.75% 2/15/2026 + 0.8% -   Vale Overseas LTD 6.25% 8/10/2026 -0.3%	Petrobras Global Finance BV   7.375% 1/17/2027 Sprint Nextel Corp.   7.875% 9/15/2023

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.20% -0.79% -1.60% 2.10% 5.19% 6.76% Mining -0.03% -0.85% -1.39% 1.56% 8.13% 2.54% Construction -0.02% -0.39% -0.03% 3.75% 8.00% 5.55% Manufacturing -0.09% -0.61% -0.36% 2.53% 7.21% 5.90% Transportion, Communication, Electric/Gas -0.03% -0.60% -0.37% 3.05% 7.02% 6.78% Wholesale -0.01% -0.42% 0.12% 2.38% 7.72% 5.24% Retail -0.06% -0.84% 0.59% 4.16% 10.20% 8.10% Finance, Insurance, Real-Estate 0.05% -0.28% 0.07% 2.84% 7.42% 6.95% Services -0.03% -0.49% -0.34% 2.47% 7.56% 7.47% Public Administration 0.02% 0.00% 1.10% 2.98% 6.69% 12.99% Energy -0.05% -0.98% -1.53% 1.41% 7.85% 1.76%   Total returns (non-annualized) by rating, market weighted.

New Issues	Forward Calendar
1. Transocean Sentry LTD (USD) 5.375% 5/15/2023 144A (05/15/2019): 525MM First Lien Notes, Price at Issuance 99.5, Yielding 5.52%.	1. Nexstar Media Group Inc.: Possible new bonds, Expected Q3 2019 2. Harsco Corp.: Unsecured Debt, Expected Q3 2019

NEW ISSUANCE WATCH: on 5/16/19 participants welcome a $525MM new corporate-bond offering by Transocean Sentry LTD. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 5/10/19, with a net outflow of $212MM, year-to-date $13.6B flowed into high-yield.

 

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Weatherford International LTD (5Y Sen USD XR14) Hertz Corp. (5Y Sen USD CR14)	SuperValu Inc. (5Y Sen USD MR14) San Miguel Corp. (5Y Sen USD CR14)

Loans and Credit Market Overview

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity: 

• PCI GAMING AUTHORITY, Medallion Midland Acquisition, Eldorado Gold Corp.

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 13 bp (basis points), as of 05/16/19
• Net positive capital flows into high-yield ETFs & mutual funds 

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