High Yield Bond Research - July 26, 2019

Posted by Corey Mahoney on Aug 1, 2019 2:49:35 PM
U.S. DURABLE GOODS ORDERS SURGED BY 2 PERCENT IN JUNE largely due to an increase in civilian aircraft orders. Core capital goods orders rose 1.9 percent on year-over-year basis suggesting the economy is picking up steam after two months of weak data. “The U.S. economy is stronger todaybecause the rest of the world is in a recession. That’s not the way it’s supposed to work, but that’s the way it’s working now. Because the rest of the world is in a recession, our interest rates are scraping bottom. And because our interest rates are scraping bottom, our economy is actually doing pretty darn well,” said Todd Buchholz, former White House director of economic policy under President George H.W. Bush  “Eighty-eight percent of our economy has pretty much nothing at all to do with exports or imports.”
unnamed - 2019-07-18T170855.947

T-MOBILE AND SPRINT RECEIVE APPROVAL from the Department of Justice to continue with the merger of the two companies.  Under the agreement, Sprint will have to divest its Boost Mobile and Virgin Mobile brands to Dish Network Corp.  Subsequent to the agreement T-Mobile will not raise rates for at least three years and will increase 5G coverage to 97 percent of the U.S. population.  ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-yield edged out high-grade.  Among high-yield bonds showing topmost price gains at appreciable volumes traded, Sprint Nextel Corp. (USD) 11.5% 11/15/2021 made analysts' 'Conviction Buy' lists. (See the chart for Sprint Nextel Corp. below.) Corey Mahoney

Key Gainers and Losers Volume Leaders
+   Sprint Corp. 7.625% 3/1/2026 + 0.9%
  Tenet Healthcare Corp. 0% 6/15/2023 + 0.6%
-   Goodyear Tire & Rubber Co. 5% 5/31/2026 -0.1%
Sprint Nextel Corp.   7.875% 9/15/2023
Washington Prime Group LP   5.95% 8/15/2024
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.02% -0.02% 0.59% 5.94% 11.37% 10.67%
Mining -0.07% 0.27% -1.25% -4.11% 5.75% 0.04%
Construction -0.01% 0.29% 0.82% 3.23% 11.46% 9.20%
Manufacturing 0.01% 0.08% 0.18% 1.71% 9.47% 7.55%
Transportion, Communication, Electric/Gas 0.04% 0.66% 0.87% 3.36% 11.06% 9.28%
Wholesale 0.03% 0.30% 0.64% 2.45% 11.15% 7.51%
Retail 0.01% 0.26% 0.58% 2.79% 12.53% 9.69%
Finance, Insurance, Real-Estate 0.02% 0.34% 1.08% 3.07% 10.97% 9.36%
Services 0.00% 0.27% 0.50% 2.51% 10.07% 8.57%
Public Administration 0.22% 0.43% 1.45% 4.64% 11.02% 12.73%
Energy -0.05% 0.13% -1.08% -3.16% 6.35% 0.95%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-01T144706.136

New Issues Forward Calendar

1. Mong Duong Finance Hldg BV (USD) 5.125% 5/7/2029 144A (07/25/2019): 678MM First Lien Notes, Price at Issuance 100, Yielding 5.13%.

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

2. DDM Holding AG: ¬100MM, Expected Q3 2019

Additional Commentary

NEW ISSUANCE WATCH: on 7/24/19 participants welcome a $1250MM 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)
Hertz Corp. (5Y Sen USD XR14)
Hovnanian Enterprises Inc. (5Y Sen USD MR14)
SuperValu Inc. (5Y Sen USD MR14)
San Miguel Corp. (5Y Sen USD CR14)

unnamed - 2019-07-18T170629.635

Loans and Credit Market Overview


Deals recently freed for secondary trading, 
notable secondary activity: 
  • Nascar Holdings Inc., NGPL Pipeco LLC, Whatabrands LLC, Electricite de France
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 16 bp (basis points), as of 07/26/19
  • Net positive capital flows into high-yield ETFs & mutual funds 

Copyright 2019 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

Topics: Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, News, Syndicated Bonds, syndicated, research, market update

Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 6,200+ CDS reference entities
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 16 products and services from debt to CDS to loans to mid-market
  • Used by top buy and sell-side firms worldwide

Subscribe to Email Updates

Recent Posts