LEVERAGED LOANS SAW the highest percentage returns since 2010 despite significant outflows and weak performance in March. “There has been more volatility in the secondary loan market and that has been driven by outflows in the first three months of the year. It’s pretty rare for one quarter to see such movement that is technically driven”. Durable goods orders dipped 1.6 percent in February in the result of fewer aircraft orders and decelerating defense-related speeding, in addition, data from January was revised lower. Business investment softened by 0.1 percent mirroring consumer confidence growing a slim 2.6 percent year-to-date compared to last year’s pace of 10 percent. 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, Norfolk Southern Corp (USD) 7.05% 5/1/2037 made analysts' 'Conviction Buy' lists. (See the chart for ADI Indices above) Corey Mahoney cmahoney@
| Key Gainers and Losers | Volume Leaders | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
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AmeriGas Partners LP 5.875% 8/20/2026 Charter Communications Operating LLC 5.75% 4/1/2048 |
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| New Issues | Forward Calendar |
|---|---|
|
1. JBS USA LLC (USD) 6.5% 4/15/2029 144A (04/01/2019): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6.5%. 2. Sable Intl. Finance LTD (USD) 5.75% 9/7/2027 144A (04/02/2019):400MM Secured Notes, Price at Issuance 99.195, Yielding 5.87%. |
1. ADT Inc.: $2.75B, Expected Q2 2019 |
Additional Commentary
JBS USA LLC. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/29/19, with a net inflow of $0.589B, year-to-date $10.6B flowed into high-yield.
| Top Widening Credit Default Swaps (CDS) | Top Narrowing Credit Default Swaps (CDS) |
| Rite Aid Corp. (5Y Sen USD XR14) Weatherford International LTD (5Y Sen USD MR14) |
Cable & Wireless Communication (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD MR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:Deals recently freed for secondary trading, notable secondary activity:
- FLIR Systems Inc., Kirby Corp., Syneos Health, Inc., Fred Olsen Wind LTD, Carbonite Inc
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 04/02/19
- Net positive capital flows into high-yield ETFs & mutual funds
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