High Yield Bond Research - July 16, 2019

Posted by Pierre Robert on Jul 16, 2019 5:12:09 PM
ANHEUSER-BUSCH INBEV WORLDWIDE INC.  bonds were very active coming after a shelved plan to IPO $10 billion dollars in Hong Kong.  Over $130 million of Anheuser-Busch Inbev Worldwide Inc. (USD) 5.55% 1/23/2049 and Anheuser-Busch Inbev Worldwide Inc. (USD) 4.75% 1/23/2029 bonds traded today. Anheuser-Busch Inbev Worldwide Inc was planning to use the $10 billion to help reduce there $100 billion in debt.
 
TREASURY YIELDS have continued  to rise and rally due to continued good economic news, finalizing budget negotiations and tariff war seeming to once again show a promise that a deal can be had. The key 10 year Treasury rate rose .03 to 2.122 or (+1.42%). Europe’s sovereign debt widely traded down. Franklin Templeton continues to feel that the economy is strong enough that 10 year treasury curve will return to at least 2.5%.  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, Ferrellgas Partners LP (USD) 8.625% 6/15/2020 made analysts' 'Conviction Buy' lists. (See the chart for Ferrellgas Partners  bonds below.) Pierre Robert.
 
Key Gainers and Losers Volume Leaders
+   Anheuser-Busch Inbev Worldwide Inc. 4.75% 1/23/2029 + 0.2%
  General Mills Inc. 4.2% 4/17/2028 + 0.2%
-   Tyson Foods Inc. 5.1% 9/28/2048 -0.2%
Anheuser-Busch Inbev Worldwide Inc.   5.55% 1/23/2049
CVS Health Corp.   5.05% 3/25/2048
General Mills Inc.   4.7% 4/17/2048
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.10% 0.00% 3.18% 5.99% 13.97% 15.43%
Mining 0.00% -0.25% 0.91% -2.22% 7.69% 2.10%
Construction 0.01% 0.03% 1.28% 2.94% 11.17% 8.88%
Manufacturing -0.00% -0.13% 1.20% 2.03% 9.56% 7.70%
Transportion, Communication, Electric/Gas 0.06% -0.16% 1.60% 2.87% 10.53% 8.67%
Wholesale 0.02% 0.02% 1.32% 2.60% 10.60% 7.36%
Retail -0.05% 0.03% 0.68% 2.87% 12.25% 9.03%
Finance, Insurance, Real-Estate 0.06% 0.06% 1.47% 2.59% 10.26% 9.17%
Services -0.00% -0.04% 0.84% 2.03% 9.97% 8.75%
Public Administration 0.02% 0.43% 1.97% 4.59% 10.39% 13.13%
Energy -0.01% -0.32% 0.88% -1.53% 7.99% 2.67%
 
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-07-16T171005.499

New Issues Forward Calendar



(None Current 07/16/2019)

 

1. LIONSGATE: $3.6 billion bond and bank financing. Expected 3rd Quarter 2016.

2. CALLON PETROLEUM CO.: $350 million senior notes due 2024. Expected 3rd Quarter 2016.

Additional Commentary


NEW ISSUANCE WATCH: on 7/12/19 participants welcome a $600MM new corporate-bond offering by Horizon Pharma Inc. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 6/21/19, with a net outflow of $602MM, year-to-date $8.9B flowed into high-yield.
 
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Rite Aid Corp. (5Y Sen USD XR14)
Ghana, Republic of (5Y Sen USD CR14)
Road King Infrastructure LTD (5Y Sen USD CR14)

unnamed - 2019-06-27T171147.709

Loans and Credit Market Overview


SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, 
notable secondary activity: 
  • Consolidated Precision Products, Starwood Property Trust Inc., Heritage Power, LLC
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 18 bp (basis points), as of 07/16/19
  • 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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