High Yield Bond Research - May 15, 2019

Posted by Andrew Robartes on May 15, 2019 5:03:40 PM
Find me on:
U.S. STOCKS RECOVERED LOSSES WEDNESDAY after news broke that the White House plans to delay an auto tariffs decision by up to six months. The news was well received in the equities market, which has been turbulent for the better part of the last two weeks. The technology sector performed particularly well today as the NASDAQ rose 1.13%. 10-Year U.S. Treasury Yields fell 3.4 basis points. S&P +0.58%, Dow +0.45%, NASDAQ +1.13%.
 
 
IN THE CORPORATE BOND SPACE, Waste Management Inc. recently priced $4 billion worth of senior unsecured notes. Waste Management plans to use the proceeds to partially fund the acquisition of Advanced Disposal Services Inc. The notes received ratings of Baa1 and A- by Moody’s and Standard & Poor’s respectively. North America’s leading provider of comprehensive waste management environmental services also recently announced a quarterly cash dividend to shareholders payable June 21, 2019. ADI proprietary index data showed a net yield increment for high-yield versus high-grade bonds. High-grade edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded, General Motors Co. (USD) 6.75% 4/1/2046 made analysts' 'Conviction Buy' lists. (See the chart for ADI indixes above.) Andrew Robartes (arobartes@advantagedata.com).
 
Key Gainers and Losers Volume Leaders
+   General Motors Co. 6.75% 4/1/2046 + 4.5%
  Charter Communications Operating LLC 5.75% 4/1/2048 + 0.4%
-   Communications Sales & Leasing Inc. 8.25% 10/15/2023 -1.9%
Sesi LLC   7.125% 12/15/2021 (1)
Pacific Gas & Electric Co.   6.05% 3/1/2034
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.01% -1.05% -1.65% 2.30% 5.33% 6.41%
Mining 0.12% -0.83% -1.50% 1.54% 8.13% 2.35%
Construction 0.10% -0.43% 0.01% 3.84% 7.98% 5.32%
Manufacturing 0.06% -0.63% -0.37% 2.55% 7.02% 5.86%
Transportion, Communication, Electric/Gas 0.14% -0.67% -0.32% 3.28% 7.10% 6.67%
Wholesale 0.01% -0.36% 0.19% 2.77% 7.76% 5.47%
Retail 0.02% -0.78% 0.49% 4.32% 10.36% 8.33%
Finance, Insurance, Real-Estate 0.03% -0.39% 0.00% 2.71% 7.39% 6.54%
Services 0.10% -0.45% -0.49% 2.40% 7.30% 7.14%
Public Administration -0.09% -0.19% 0.84% 3.63% 6.67% 12.52%
Energy 0.11% -1.07% -1.66% 1.42% 7.77% 1.63%
 
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-05-15T170210.500

New Issues Forward Calendar

1. Vistajet Malta Finance PLC (USD) 10.5% 6/1/2024 144A (05/14/2019): 550MM Senior Unsecured Notes, Price at Issuance 98.113, Yielding 10.99%.

1. Nexstar Media Group Inc.: Possible new bonds, Expected Q3 2019

2. Calpine Corp.: $1.4B bonds, Expected Q2 2019

Additional Commentary

NEW ISSUANCE WATCH: on 5/14/19 participants welcome a $550MM new corporate-bond offering by Vistajet Malta Finance PLC. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 5/10/19, with a net outflow of $212MM, year-to-date $13.6B 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)
Road King Infrastructure LTD (5Y Sen USD MR14)
Cable & Wireless Communication (5Y Sen USD CR14)

unnamed (92)

Loans and Credit Market Overview

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, 
notable secondary activity: 
  • Medallion Midland Acquisition, Eldorado Gold Corp., Oryx Midstream
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 14 bp (basis points), as of 05/15/19
  • 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