High Yield Bond Research - August 21, 2019

Posted by Pierre Robert on Aug 21, 2019 4:59:49 PM
GOVERNMENT BONDS yields rebounded in Europe with the exception of Italy whose government collapsed amid their ongoing budget debate. Stock markets were also mixed to lower.The 10-year Treasury note rose 1.8 basis points to 1.577%. S&P +0.79%, DOW +.91%, NASDAQ +.88%.
EQUIFAX IN THE process of settling with state attorney's and a possible sale to PE. 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, Equifax Inc (USD) 7% 7/1/2037  made analysts' 'Conviction Buy' list. (See the chart for ADI Indices above) Pierre Robert
 
Key Gainers and Losers Volume Leaders
+   Pacific Gas & Electric Co. 6.05% 3/1/2034 + 1.0%
  Petrobras Global Finance BV 6.85% 6/5/2115 + 2.4%
-   Petrobras Global Finance BV 8.75% 5/23/2026 -0.1%
  Goodyear Tire & Rubber Co. 5% 5/31/2026 -0.4%
Pacific Gas & Electric Co.   6.05% 3/1/2034
Sprint Nextel Corp.   7.875% 9/15/2023
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.03% -0.27% -0.07% 6.98% 11.48% 10.99%
Mining 0.25% -0.82% -2.84% -4.18% 4.85% -0.34%
Construction 0.03% 0.34% 1.09% 4.08% 12.26% 9.65%
Manufacturing 0.07% 0.08% 0.46% 2.59% 10.09% 7.54%
Transportion, Communication, Electric/Gas 0.04% 0.09% 0.92% 3.93% 11.92% 8.89%
Wholesale -0.02% -0.01% 0.01% 2.63% 10.77% 6.90%
Retail -0.03% 0.03% 0.28% 2.50% 12.49% 9.32%
Finance, Insurance, Real-Estate 0.00% 0.02% 0.75% 3.60% 11.36% 9.45%
Services 0.06% 0.11% 0.64% 3.03% 10.26% 8.01%
Public Administration 0.12% 0.72% 2.36% 5.58% 12.86% 14.95%
Energy 0.27% -0.64% -2.40% -3.12% 5.72% 0.80%
 
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-21T165822.508

New Issues Forward Calendar



(None Current 08/21/2019)

 

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

2. Twinset Spa: ¬170M 5 year senior secured floating-rate notes, 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 MR14)
Weatherford International LTD (5Y Sen USD MR14)
Hertz Corp. (5Y Sen USD CR14)
Road King Infrastructure LTD (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed - 2019-08-01T153117.188

Loans and Credit Market Overview


SYNDICATED LOANS HIGHLIGHTS:

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 24 bp (basis points), as of 08/21/19
  • 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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