High Yield Bond Research - August 5, 2019

Posted by Pierre Robert on Aug 5, 2019 5:03:47 PM
THE DEVALUING OF THE CHINESE yuan by China to below 7 Yuan to the dollar in reaction to Trumps 10% tariff on the remaining $300 Billion of Chinese goods has caused wide spread issues in the stock and bond market. Bond and stock markets were substancially lower. The 10-Year Treasury note fell to 1.846%, its lowest yield in nearly 3 years. S&P -0.73%, DOW -0.37%, NASDAQ -1.32%
OIL PRICES HAS FALLEN almost 10% in the last 5 days. Oil companies bonds are among the biggest volume traders this past week. Petrobras Global Finance BV (USD) 6.85% 6/5/2115, Diamond Offshore Drilling (USD) 7.875% 8/15/2025, Range Resources Corp. (USD) 4.875% 5/15/2025, Chesapeake Energy Corp. (USD) 8% 1/15/2025, Targa Resources Partners LP (USD) 5.375% 2/1/2027, Antero Resources Corp. (USD) 5.625% 6/1/2023, etc were among the largest volume traders today. 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, Bristol-Myers Squibb (USD) 6.125% 5/1/2038 made analysts' 'Conviction Buy' lists. (See the chart for ADI  indexes above.) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Teva Pharmaceutical Industries LTD 2.8% 7/21/2023 + 2.5%
  Iron Mountain Inc. 6% 8/15/2023 + 0.8%
-   Petrobras Global Finance BV 6.85% 6/5/2115 -1.0%
  Chesapeake Energy Corp. 8% 1/15/2025 -3.6%
Petrobras Global Finance BV   6.85% 6/5/2115
Goodyear Tire & Rubber Co.   4.875% 3/15/2027
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.28% -0.17% -0.21% 5.05% 11.90% 12.24%
Mining -0.42% -0.49% -1.88% -2.85% 6.49% 1.19%
Construction -0.09% -0.08% 0.86% 2.93% 11.71% 9.47%
Manufacturing -0.12% -0.02% -0.04% 1.69% 9.58% 7.34%
Transportion, Communication, Electric/Gas -0.20% -0.14% 0.55% 3.02% 11.24% 8.95%
Wholesale -0.09% -0.18% 0.34% 2.39% 10.84% 6.93%
Retail -0.27% -0.36% -0.00% 1.56% 11.72% 8.15%
Finance, Insurance, Real-Estate -0.06% 0.13% 0.95% 2.98% 10.82% 9.18%
Services -0.11% -0.10% 0.54% 2.39% 10.64% 8.80%
Public Administration 0.22% 0.62% 1.95% 5.27% 11.96% 13.52%
Energy -0.34% -0.35% -1.62% -1.78% 7.28% 2.17%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-05T170206.639

New Issues Forward Calendar

(None Current 08/05/2019)


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

2. Calpine Corp.: $1.4B bonds, Expected Q3 2019

Additional Commentary

NEW ISSUANCE WATCH: on 08/02/19 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)
Hertz Corp. (5Y Sen USD CR14)
Road King Infrastructure LTD (5Y Sen USD CR14)

unnamed - 2019-08-01T153117.188

Loans and Credit Market Overview


Deals recently freed for secondary trading, 
notable secondary activity: 
  • Helical PLC, London Stock Exchange Group PLC, Maxamcorp Holding SL
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 08/05/19
  • 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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