HIGH-YIELD DEBT ROSE AGAINST INVESTMENT GRADE BONDS in net prices linked to actual trades. Treasury yields ticked higher resulting in a steeper curve as crude oil prices push higher, the two often move hand in hand. In addition, the spread between the two and 10-year note widened 1.3 basis points. 10-year Treasury note rose 0.2 basis points. S&P -0.01%, DOW -0.22%, NASDAQ +0.07%
EXISTING U.S. HOME SALES PLUMMET 4.9 PERCENT IN MARCH to start the spring selling season off on a low note. The underlining issue remains with the
lack of affordable inventory causing the slowdown. Doug Duncan, chief economist at Fannie Mae states “
There simply isn’t supply at the entry level where people actually want to buy”. Crude oil soared 2.59 percent as the U.S. announced the
termination of waivers for countries to import Iranian oil. U.S. Secretary Mike Pompeo declared
“U.S. will not issue any exception to Iranian oil importers,” currently
eight countries have waivers expiring May 2.
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,
Lennar Corp. (USD) 4.75% 4/1/2021 made analysts' 'Conviction Buy' lists. (See the chart for
Lennar Corp. bonds below.)
Corey Mahoney cmahoney@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
HCA Inc. 6.5% 2/15/2020 |
+ 0.1% |
| |
Sprint Spectrum LP 7.25% 9/15/2021 |
+ 0.1% |
| - |
Hertz Corp. 6.25% 10/15/2022 |
-2.2% |
|
Momentive Performance Materials Inc. 3.88% 10/24/2021
Ensco PLC 4.5% 10/1/2024
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
-0.23% |
0.46% |
1.98% |
4.41% |
7.24% |
5.89% |
| Mining |
0.01% |
0.59% |
2.40% |
4.38% |
9.44% |
3.85% |
| Construction |
-0.08% |
0.30% |
2.15% |
5.02% |
7.76% |
4.59% |
| Manufacturing |
-0.05% |
0.16% |
1.50% |
4.46% |
7.42% |
5.49% |
| Transportion, Communication, Electric/Gas |
-0.02% |
0.25% |
1.76% |
5.15% |
7.45% |
5.86% |
| Wholesale |
-0.05% |
0.15% |
1.28% |
4.19% |
7.64% |
3.98% |
| Retail |
-0.04% |
0.30% |
2.12% |
5.01% |
9.16% |
5.95% |
| Finance, Insurance, Real-Estate |
-0.01% |
0.01% |
1.14% |
4.04% |
7.04% |
5.73% |
| Services |
-0.05% |
-0.04% |
1.22% |
3.81% |
7.00% |
6.20% |
| Public Administration |
0.12% |
0.23% |
0.43% |
3.31% |
6.08% |
10.11% |
| Energy |
0.04% |
0.82% |
2.43% |
4.74% |
9.20% |
3.33% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
(None Current 04/22/2019)
|
1. E.W. Scripps: $1.85B term loans and unsecured debt, Expected Q1 2019
2. Twinset Spa: ¬170M 5 year senior secured floating-rate notes, Expected Q1 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 4/17/19 participants welcome a $300MM new corporate-bond offering by
Vizient Inc. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 4/18/19, with a net inflow of $1.1B, year-to-date $14.4B 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 CR14)
SuperValu Inc. (5Y Sen USD MR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Prysmian, Project Maple II BV, Trade Me Group LTD, Jane Street, Six Flags 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 17 bp (basis points), as of 04/22/19
- Net positive capital flows into high-yield ETFs & mutual funds
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