THE NASDAQ FELL SHARPLY MONDAY morning as U.S. tech companies cut off supplies to Chinese electronics manufacturer, Huawei Technologies. In compliance with a decision from the White House, chipmakers have halted business with Huawei until further notice. Amid the escalating trade tensions, all three major indices suffered losses, with the NASDAQ dropping 113 points. S&P -0.67%, Dow -0.33%, NASDAQ -1.46%.
IN THE CORPORATE BOND SPACE, Berry Global Group Inc.
priced $1.75 billion worth of senior secured notes through its wholly owned subidiary, Berry Global Escrow Corporation. The global plastic manufacturer plans to
use the proceeds to fund a portion of the acquistion of RPC Group Plc and to repay existing debt. Additionally, Tesla Inc. (TSLA) stock has
fallen over 20% in the past two weeks, immediately follwoing a sale of $1.8 billion in bonds. The world’s largest producer of electric cars is well off pace to meet their sales goal for the year and are facing what analysts consider to be
dire circumstances.
ADI proprietary index data showed a net
yield increment for high-yield versus high-grade bonds. High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded,
Pacific Gas & Electric Co. (USD) 2.95% 3/1/2026 made analysts' 'Conviction Buy' lists. (See the chart for
Pacific Gas & Electric Co. (USD) 2.95% 3/1/2026 below.)
Andrew Robartes (
arobartes@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
Sprint Corp. 7.625% 2/15/2025 |
+ 4.2% |
| |
Dish DBS Corp. 7.75% 7/1/2026 |
+ 0.9% |
| - |
Hughes Satelite Systems 6.625% 8/1/2026 |
-0.2% |
|
Charter Communications Operating LLC 5.75% 4/1/2048
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% |
-0.10% |
-1.30% |
2.57% |
6.51% |
8.66% |
| Mining |
-0.04% |
-0.25% |
-1.14% |
1.73% |
8.25% |
2.89% |
| Construction |
-0.06% |
-0.18% |
-0.09% |
3.75% |
8.20% |
6.04% |
| Manufacturing |
-0.05% |
-0.24% |
-0.31% |
2.57% |
7.27% |
6.48% |
| Transportion, Communication, Electric/Gas |
-0.04% |
-0.00% |
-0.14% |
3.22% |
7.39% |
7.24% |
| Wholesale |
-0.07% |
-0.08% |
0.02% |
2.43% |
7.86% |
5.60% |
| Retail |
-0.11% |
-0.32% |
0.51% |
2.96% |
8.61% |
5.98% |
| Finance, Insurance, Real-Estate |
-0.05% |
-0.08% |
-0.04% |
2.74% |
7.24% |
6.76% |
| Services |
-0.02% |
-0.12% |
-0.12% |
2.43% |
7.60% |
7.18% |
| Public Administration |
0.12% |
0.33% |
0.95% |
3.19% |
6.95% |
13.10% |
| Energy |
-0.03% |
-0.26% |
-1.13% |
1.81% |
7.95% |
2.75% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
1. Berry Global Inc. (USD) 5.625% 7/15/2027 Reg S (05/20/2019):500MM Second Lien Notes, Price at Issuance 100, Yielding 5.63%.
|
1. Diamondback Energy Inc.: High-yield notes, Expected Q2 2019
2. Harsco Corp.: Unsecured Debt, Expected Q3 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 5/20/19 participants welcome a $500MM new corporate-bond offering by Berry Global Inc. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 5/17/19, with a net outflow of $2.6B, year-to-date $11.0B flowed into high-yield.
| Top Widening Credit Default Swaps (CDS) |
Top Narrowing Credit Default Swaps (CDS) |
Rite Aid Corp. (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD CR14) |
SuperValu Inc. (5Y Sen USD XR14)
San Miguel Corp. (5Y Sen USD CR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Horizon Pharma Inc., PCI GAMING AUTHORITY, Medallion Midland Acquisition
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 15 bp (basis points), as of 05/20/19
- Net positive capital flows into high-yield ETFs & mutual funds
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