High Yield Bond Research - August 16, 2019

Posted by Andrew Robartes on Aug 16, 2019 5:19:00 PM
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US STOCKS ROSE TODAY as investors continue to mull trade negotiations and signs of economic stagnation. Despite gains, today marks the end of a volatile week that saw an overall loss of about 1.5% in the DJIA. The ten-year and two-year treasury notes are separated by just 5.7 basis points at 1.55% and 1.493% respectively. S&P +1.44%, DOW +1.20%, NASDAQ +1.67%.
IN THE CORPORATE BOND SPACE, Blackrock TCP Capital Corp. priced $150 million in senior unsecured notes. The notes, which mature on August 23, 2024, yield 3.9%. The finance company intends to use the proceeds to repay outstanding debt and invest in portfolio companiesADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded, Mattel Inc. (USD) 6.75% 12/31/2025 made analysts' 'Conviction Buy' list. (See the chart for Mattel Inc. below) Andrew Robartes
Key Gainers and Losers Volume Leaders
+   Pacific Gas & Electric Co. 6.05% 3/1/2034 + 0.2%
  iHeartCommunications Inc. 8.375% 5/1/2027 + 0.5%
-   Sprint Nextel Corp. 7.875% 9/15/2023 -0.3%
  Whiting Petroleum Corp. 5.75% 3/15/2021 -0.5%
EMC Corp.   3.375% 6/1/2023
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 0.11% -0.06% -0.72% 7.13% 12.36% 13.44%
Mining -0.14% -1.13% -4.61% -4.63% 4.31% -0.72%
Construction 0.02% 0.05% 0.93% 3.89% 12.77% 10.48%
Manufacturing 0.04% -0.16% -0.25% 1.98% 9.25% 6.95%
Transportion, Communication, Electric/Gas 0.07% 0.05% 0.75% 4.03% 11.87% 9.34%
Wholesale 0.04% -0.27% -0.29% 2.41% 10.52% 6.80%
Retail 0.16% -0.46% -0.46% 2.72% 12.56% 10.01%
Finance, Insurance, Real-Estate 0.03% -0.11% 0.74% 3.59% 11.43% 9.68%
Services 0.05% -0.18% 0.25% 2.92% 10.11% 8.19%
Public Administration 0.12% 0.12% 1.64% 5.16% 12.20% 14.38%
Energy -0.07% -0.76% -3.97% -3.52% 5.25% 0.49%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-19T152352.106

New Issues Forward Calendar

(None Current 08/16/2019)


1. DDM Holding AG: ¬100MM, Expected Q3 2019

2. General Electric Distributed Power: $600M high-yield bonds, Expected Q3 2019

Additional Commentary

NEW ISSUANCE WATCH: on 08/13/19 participants welcome a $2.1B new corporate-bond offering by
Tenet Healthcare Corp. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 8/9/19, with a net outflow of  since October 2018.
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)

unnamed - 2019-08-01T153117.188

Loans and Credit Market Overview


Deals recently freed for secondary trading, 
notable secondary activity: 
  • US Foods Inc., Duerre Group, Albertsons LLC, Helical 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 was 25 bp (basis points), as of 08/16/19
  • 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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