Advantage Data High Yield Bond Market Summary

High Yield Bond Research - October 24, 2019

Posted by Pierre Robert on Oct 24, 2019 5:19:04 PM
US STOCKS WERE MIXED TODAY, and Boris Johnson called for snap elections in December.  Republicans and Democrats fight over the close door setting of the Impeachment inquiry. The 10-year Treasury note declined 0.7 bps. S&P -0.36%, DOW -0.10%, NASDAQ -0.72%.
SOVEREIGN BONDS WERE COLLECTIVELY DOWN. Talk of negative yields are returing. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-grade edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded, JC Penney Co. Inc. (USD) 5.65% 6/1/2020 made analysts' 'Conviction Buy' list. (See the chart below for JC Penney Co. Inc. above) Pierre Robert
 
Key Gainers and Losers Volume Leaders
+   CVS Health Corp. 5.05% 3/25/2048 + 0.3%
  Wells Fargo & Co. 3% 10/23/2026 + 0.7%
-   Wells Fargo & Co. 4.15% 1/24/2029 -0.3%
  Suzano Austria GmbH 7% 3/16/2047 Reg S -0.1%
Wells Fargo & Co.   4.15% 1/24/2029
Enbridge Inc.   1.75% 1/10/2020
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.01% 0.16% 1.50% 3.59% 18.54% 18.74%
Mining -0.05% -0.33% -4.35% -3.83% 4.13% -1.16%
Construction 0.04% 0.46% 1.25% 3.58% 15.33% 14.29%
Manufacturing 0.05% 0.54% 0.62% 2.33% 11.63% 9.73%
Transportion, Communication, Electric/Gas 0.05% 0.21% 0.48% 2.14% 13.55% 10.91%
Wholesale 0.06% 0.11% -0.16% 1.01% 11.68% 9.29%
Retail 0.06% 0.32% 0.73% 2.42% 15.61% 14.08%
Finance, Insurance, Real-Estate 0.08% 0.45% 0.51% 2.58% 13.24% 11.38%
Services 0.07% 0.33% 0.49% 2.51% 12.99% 11.19%
Public Administration 0.01% 0.57% 1.43% 3.12% 13.96% 16.20%
Energy -0.03% -0.36% -3.66% -2.83% 5.59% 0.66%
 
Total returns (non-annualized) by rating, market weighted.
New Issues Forward Calendar

1. Reliance Standard Life Global Funding II (USD) 2.5% 10/30/2024 Reg S (10/23/2019): 400MM Secured Notes, Price at Issuance 99.832, Yielding 2.54%.

1. LIONSGATE: $3.6 billion bond and bank financing. Expected 3rd Quarter 2016.

Additional Commentary


NEW ISSUANCE WATCH: on 10/22/19 participants welcome a $1B new corporate-bond offering by Netflix Inc. The most recent data showed a money flowed out of high outflow ETF/mutual funds for the week ended 9/27/2019, with a net outflow of $258 million.
 
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Hertz Corp. (5Y Sen USD CR14)
Ghana, Republic of (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed - 2019-09-09T165353.966

Loans and Credit Market Overview


SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, 
notable secondary activity: 
  • McDermott International Inc., Live Nation Entertainment Inc., Berry Plastics 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 28 bp (basis points), as of 10/24/19
  • Net positive capital flows into high-yield ETFs & mutual funds 

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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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