Advantage Data High Yield Bond Market Summary

High Yield Bond Research - May 17, 2019

Posted by Andrew Robartes on May 17, 2019 5:18:36 PM
Find me on:
U.S. STOCKS RECOVERED EARLY LOSSES on Friday as positive economic data weighs against trade concerns. News that China is hesitant to resume trade talks with the U.S. reinforced investors' concerns that tensions will persist. However, news that consumer sentiment is at a 15-year high bolstered stocks and stabilized U.S. treasury yields, with the 10-Year Note at 2.39%. S&P -0.58%, Dow -0.38%, NASDAQ -1.04%.
IN THE CORPORATE BOND MARKET, Dow Chemical Co., a wholly owned subsidiary of Dow Inc., priced $2 billion in senior unsecured notes. The commodity chemical company intends to use the proceeds to repay indebtedness and redeem existing notes. President of Dow, Howard Ungerleider said “The current interest rate environment provides us with a window to opportunistically manage and extend our debt maturity profile”. The bonds were given a rating of BBB by Standard and Poor’s. ADI proprietary index data showed a net yield increment for high-yield versus high-grade bonds. High-grade edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Charles Schwab Corp. (USD) 3.2% 1/25/2028 made analysts' 'Conviction Buy' lists. (See the chart for ADI indexes above.) Andrew Robartes (arobartes@advantagedata.com).
 
Key Gainers and Losers Volume Leaders
+   Sprint Corp. 7.125% 6/15/2024 + 0.4%
  Netflix Inc. 5.875% 2/15/2025 + 1.3%
-   Western Digital Corp. 4.75% 2/15/2026 -1.8%
Sprint Capital Corp.   8.75% 3/15/2032
Western Digital Corp.   4.75% 2/15/2026
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.24% -0.30% -1.30% 2.36% 5.49% 7.35%
Mining 0.29% -0.31% -1.00% 1.87% 8.52% 3.50%
Construction 0.04% -0.17% -0.10% 3.80% 8.09% 5.72%
Manufacturing 0.13% -0.33% -0.43% 2.29% 6.98% 5.95%
Transportion, Communication, Electric/Gas 0.16% -0.16% -0.24% 3.18% 7.27% 7.26%
Wholesale 0.12% -0.09% 0.24% 2.68% 7.96% 5.53%
Retail 0.21% -0.29% 0.72% 3.77% 10.07% 7.68%
Finance, Insurance, Real-Estate 0.06% -0.09% 0.14% 2.96% 7.46% 6.94%
Services 0.17% -0.11% -0.18% 2.64% 7.86% 7.69%
Public Administration 0.12% 0.11% 1.10% 3.09% 6.82% 13.10%
Energy 0.29% -0.46% -1.17% 1.68% 8.16% 2.64%
 
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-05-17T171713.915

New Issues Forward Calendar

1. Transocean Sentry LTD (USD) 5.375% 5/15/2023 Reg S (05/16/2019): 525MM First Lien Notes, Price at Issuance 99.5, Yielding 5.52%.

2. American Airlines Group Inc. (USD) 5% 6/1/2022 Reg S (05/17/2019): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%.

1. Harsco Corp.: Unsecured Debt, Expected Q3 2019

Additional Commentary

NEW ISSUANCE WATCH: on 5/17/19 participants welcome a $750MM new corporate-bond offering by American Airlines Group Inc. 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)
Rite Aid Corp. (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD CR14)
Road King Infrastructure LTD (5Y Sen USD MR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed (92)

Loans and Credit Market Overview

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, 
notable secondary activity: 
  • Horizon Pharma Inc., PCI GAMING AUTHORITY, Medallion Midland Acquisition
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 05/17/19
  • Net positive capital flows into high-yield ETFs & mutual funds 

Copyright 2019 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

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.

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


Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 6,200+ CDS reference entities
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 16 products and services from debt to CDS to loans to mid-market
  • Used by top buy and sell-side firms worldwide

 

Subscribe to Email Updates

Recent Posts