High Yield Bond Research - July 19, 2019

Posted by Andrew Robartes on Jul 19, 2019 5:15:00 PM
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U.S. STOCKS ROSE THEN FELL today as investors weigh the possibility of an interest-rate cut. Oil futures rose this afternoon, but end the week down 7% amid tensions with Iran. The 10-year note rose 2.5 basis points. S&P -0.62%, DOW -0.25, NASDAQ -0.74%.
IN THE CORPORATE BOND SPACE, Hertz Corporation priced $500 million worth of senior unsecured notes. The car rental company, which is a subsidiary of Hertz Global Holdings Inc., plans to use the proceeds to consummate the redemption of outstanding notes, pay interest, and for general corporate purposes. The notes will yield 7.125% and will mature in August of 2026ADI proprietary index data showed a net yield increment for high-yield versus high-grade bondsHigh-grade edged out high-yield.  Among high-grade bonds showing topmost price gains at appreciable volumes traded, Southern California Gas (USD) 4.125% 6/1/2048 made analysts' 'Conviction Buy' lists. (See the chart for ADI index above.Andrew Robartes (arobartes@advantagedata.com)
Key Gainers and Losers Volume Leaders
+   Antero Resources Finance Corp. 5.375% 11/1/2021 + 0.4%
  Range Resources Corp. 4.875% 5/15/2025 + 3.6%
-   Sprint Nextel Corp. 6% 11/15/2022 -1.0%
  CenturyLink Inc. 7.5% 4/1/2024 -0.5%
Western Digital Corp.   4.75% 2/15/2026
Teva Pharmaceuticals Fin BV   6.75% 3/1/2028
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.03% 0.09% 1.96% 4.73% 11.41% 12.69%
Mining -0.70% -1.37% -0.24% -3.38% 6.42% 1.40%
Construction -0.16% -0.24% 0.97% 2.76% 11.05% 8.75%
Manufacturing -0.12% -0.22% 0.63% 1.73% 9.10% 7.39%
Transportion, Communication, Electric/Gas -0.13% -0.08% 1.14% 2.84% 10.50% 8.72%
Wholesale -0.08% 0.05% 0.95% 2.68% 10.72% 7.46%
Retail -0.16% -0.14% 0.46% 2.77% 12.37% 9.84%
Finance, Insurance, Real-Estate -0.08% 0.08% 1.22% 2.74% 10.46% 9.16%
Services -0.13% -0.04% 0.58% 2.33% 9.70% 8.38%
Public Administration -0.08% 0.53% 1.87% 4.22% 10.55% 13.85%
Energy -0.60% -1.04% -0.03% -2.34% 6.89% 2.22%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-07-22T102848.651

New Issues Forward Calendar

1. Acrisure LLC (USD) 10.125% 8/1/2026 144A (07/18/2019): 400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 10.13%.

2. Acrisure LLC (USD) 10.125% 8/1/2026 Reg S (07/18/2019):400MM Senior Unsecured Notes, Price at Issuance 100, Yielding 10.13%.

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

2. Twinset Spa: ¬170M 5 year senior secured floating-rate notes, Expected Q3 2019

Additional Commentary

NEW ISSUANCE WATCH: on 7/19/19 participants welcome a $450MM new corporate-bond offering by Taylor Morrison Communities 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 XR14)
Weatherford International LTD (5Y Sen USD MR14)
Cable & Wireless Communication (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed - 2019-07-18T170629.635

Loans and Credit Market Overview


Deals recently freed for secondary trading, 
notable secondary activity: 
  • Sunshine Luxembourg VII Sarl, Consolidated Precision Products
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 26 bp (basis points), as of 07/19/19
  • 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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