High Yield Bond Research - July 22, 2019

Posted by Pierre Robert on Jul 22, 2019 5:26:01 PM
TREASURIES  were mixed to down in Canada and the US-Mostly down in Canada and slightly higher in the United States. Soveriegns in Europe were also mixed. Congress and the White House are close to a debt limit deal. The 10-year note rose 2.5 basis points. S&P -0.62%, DOW -0.25, NASDAQ -0.74%
ANHEUSER-BUSCH INBEV WORLDWIDE INC after failing to IPO in Hong Kong for $10 billion, decided to sell their Austrailian division  to Asahi Group Holdings for $11 billion. Most of the proceeds will go towards debt reduction. Anheuser-Busch Inbev Worldwide Inc. (USD) 4.75% 1/23/2029 and Anheuser-Busch Inbev Worldwide Inc. (USD) 4.6% 4/15/2048 traded almost $60 million bonds 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, Southern California Gas (USD) 4.125% 6/1/2048 made analysts' 'Conviction Buy' lists. (See the chart for ADI index above.) Pierre Robert
Key Gainers and Losers Volume Leaders
+   United Technologies Corp. 3.75% 11/1/2046 + 0.4%
  CenterPoint Energy Inc. 4.25% 11/1/2028 + 0.7%
-   General Electric Co. FLT% PERP (1) -1.3%
United Technologies Corp.   3.75% 11/1/2046
Citigroup Inc.   4.45% 9/29/2027
CenterPoint Energy Inc.   4.25% 11/1/2028
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.05% -0.01% 1.64% 5.04% 12.17% 13.26%
Mining -0.01% -1.39% -0.10% -2.82% 7.31% 2.36%
Construction 0.01% 0.05% 1.04% 3.03% 11.44% 9.26%
Manufacturing -0.06% -0.25% 0.52% 1.80% 9.52% 7.74%
Transportion, Communication, Electric/Gas 0.04% 0.01% 0.89% 2.80% 10.48% 8.78%
Wholesale -0.00% -0.06% 0.87% 2.72% 10.84% 7.57%
Retail 0.08% -0.06% 0.53% 3.13% 12.59% 10.28%
Finance, Insurance, Real-Estate -0.02% 0.06% 1.11% 2.77% 10.52% 9.23%
Services 0.01% -0.01% 0.52% 2.35% 9.75% 8.38%
Public Administration -0.28% -0.08% 1.25% 3.91% 10.24% 12.90%
Energy -0.08% -1.23% 0.01% -1.97% 7.67% 2.81%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-07-22T172452.520

New Issues Forward Calendar

1. Tampa Electric Co. (USD) 3.625% 6/15/2050 (07/22/2019): 300MM Senior Unsecured Notes, Price at Issuance 98.774, Yielding 3.69%.

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.

3. FERRO CORP: $200 million offering senior notes due 2016, expected week of July 21, 2008.

Additional Commentary

NEW ISSUANCE WATCH: on 7/19/19 participants welcome a $930MM new corporate-bond offering by TPC Group Inc The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 7/19/19, with a net inflow of $570MM, six week total $7.4B flowed into high-yield.
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)
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: 
  • NGPL Pipeco LLC, Whatabrands LLC,Electricite de France, STAG Industrial Inc.
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 20 bp (basis points), as of 07/22/19
  • 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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