High Yield Bond Research - August 12, 2019

Posted by Pierre Robert on Aug 12, 2019 5:14:30 PM
SOVEREIGN YIELD CURVE in Europe  and US have fallen significantly. Stock markets have fallen significantly as well. Similarly, the 10-Year Treasury note fell to 1.639%. S&P -1.23%, DOW -1.49%, NASDAQ -1.2%.
RENAULT BONDS had an uptick in trading due to the fact that they may restructure the relationship with Nissan in order to facilitate the merger with Fiat. 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, Microsoft Corp. (USD) 3.75% 5/1/2043 made analysts' 'Conviction Buy' lists. (See the chart for ADI indexes above.) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Pacific Gas & Electric Co. 6.05% 3/1/2034 + 1.5%
  Southwestern Energy Co. 7.5% 4/1/2026 + 1.3%
-   Frontier Communications Corp. 10.5% 9/15/2022 -1.7%
  Petrobras Global Finance BV 6.85% 6/5/2115 -0.2%
Pacific Gas & Electric Co.   6.05% 3/1/2034
Petrobras Global Finance BV   6.85% 6/5/2115
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.15% 0.03% -0.12% 6.29% 12.06% 12.35%
Mining -0.02% -2.30% -3.53% -4.77% 4.38% -1.34%
Construction -0.07% -0.02% 0.79% 3.59% 11.89% 9.24%
Manufacturing -0.00% -0.14% -0.14% 1.81% 9.40% 6.95%
Transportion, Communication, Electric/Gas -0.04% -0.05% 0.60% 3.54% 11.51% 8.76%
Wholesale 0.02% -0.41% 0.03% 2.42% 10.29% 6.62%
Retail -0.03% -0.40% -0.04% 1.58% 12.13% 8.32%
Finance, Insurance, Real-Estate -0.08% -0.12% 0.89% 3.37% 11.23% 9.04%
Services -0.06% -0.10% 0.53% 2.82% 10.71% 8.32%
Public Administration -0.38% -0.27% 1.44% 4.62% 11.64% 13.19%
Energy 0.00% -2.15% -3.30% -3.90% 5.03% -0.13%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-12T171048.874

New Issues Forward Calendar

(None Current 08/12/2019)


1. Sinclair Broadcast Group Inc.: $2.55B, seven-year senior secured notes; $2.325B eight year senior unsecured notes

2. Diamondback Energy Inc.: High-yield notes, Expected Q3 2019

Additional Commentary

NEW ISSUANCE WATCH: on 08/09/19 participants welcome a $750MM new corporate-bond offering by
iHeartCommunications Inc.. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 8/2/19, with a net outflow of $115 MM, $1.3 billion outflow the prior week.
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Weatherford International LTD (5Y Sen USD MR14)
Hertz Corp. (5Y Sen USD CR14)
Road King Infrastructure LTD (5Y Sen USD CR14)

Loans and Credit Market Overview


Deals recently freed for secondary trading, 
notable secondary activity: 
  • Duerre Group, Albertsons LLC, Helical PLC, London Stock Exchange Group PLC
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 19 bp (basis points), as of 08/09/19
  • 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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