High Yield Bond Research - July 24, 2019

Posted by Pierre Robert on Jul 24, 2019 5:05:09 PM
SOVEREIGN BENCHMARKS yields in Europe, Canada and United States were even to higher. The UK yield curve were sharply  lower again as Boris Johnson was assuming role as Prime Minister.  Boris Johnson has vowed to get Brexit done this fall and investors are noticeably worried that it may be done  in a destructive manor. S&P -0.62%, DOW -0.25, NASDAQ -0.74%
unnamed - 2019-07-18T170855.947

TENET HEALTHCARE CORP bonds were among the most active traded in the corporate bond world due the fact that it plans to spin off its Conifer Unit as a standalone unit. The spin-off would value the unit at over $2 billion. This spin-off would be completely tax-free.  Tenet Healthcare Corp. (6.75) 0% 6/15/2023, Tenet Healthcare Corp. (USD) 8.125% 4/1/2022, Tenet Healthcare Corp. (USD) 5.125% 5/1/2025, Tenet Healthcare Corp. (USD) 7% 8/1/2025, all traded combined more than $60 million. Tenet’s stock was up almost %15. ADI proprietary index data showed a net yield increment for High Grade versus high-yield bondsHigh-grade edged out High-yield.  Among high-yield 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
+   Sprint Nextel Corp. 7.875% 9/15/2023 + 1.1%
  Petrobras Global Finance BV 6.85% 6/5/2115 + 0.4%
-   Tenet Healthcare Corp. 0% 6/15/2023 -0.5%
Sprint Nextel Corp.   7.875% 9/15/2023
Pacific Gas & Electric Co.   6.05% 3/1/2034
Tenet Healthcare Corp.   0% 6/15/2023
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.17% -0.60% 0.29% 4.95% 12.10% 13.04%
Mining 0.13% -0.88% -0.99% -3.71% 6.45% 1.16%
Construction 0.10% 0.19% 0.71% 3.00% 11.43% 8.83%
Manufacturing 0.10% -0.29% -0.01% 1.54% 9.25% 7.28%
Transportion, Communication, Electric/Gas 0.14% 0.23% 0.62% 3.21% 10.75% 9.43%
Wholesale 0.12% 0.12% 0.51% 2.75% 10.81% 7.56%
Retail 0.11% 0.05% 0.32% 3.26% 12.72% 9.70%
Finance, Insurance, Real-Estate 0.11% 0.21% 0.92% 2.85% 10.75% 9.28%
Services 0.09% 0.10% 0.23% 2.45% 10.25% 8.63%
Public Administration 0.32% 0.12% 1.35% 4.01% 10.54% 12.37%
Energy 0.11% -0.77% -0.84% -2.80% 6.85% 1.76%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-07-24T170257.624

New Issues Forward Calendar

1. JBS Investments GmbH (USD) 5.75% 7/30/2028 144A (07/23/2019): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.75%.

2. Five Point Op Co. LP (USD) 7.875% 11/15/2025 (07/23/2019):125MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7.88%.

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

Additional Commentary

NEW ISSUANCE WATCH: on 7/23/19 participants welcome a $1.25 Billion new corporate-bond offering by JBS USA LLC 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 23 bp (basis points), as of 07/24/19
  • 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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