U.S. STOCKS DECLINED AGAIN WEDNESDAY as trade worries continued and more investors moved into government bonds. The Treasury yield curve has reached its deepest inversion since 2007, with the 3-month yield topping the 10-year by almost 10 basis points. Amidst the yield curve predicting economic downturn, all three major indices fell today. S&P -0.69%, DOW -0.87%, NASDAQ -0.79%.
IN THE CORPORATE BOND SPACE, Choice Properties REIT priced $750 million worth of senior unsecured notes. The proceeds will be
used in part to pay existing debts and for general corporate purposes. The notes bear an interest rate of 3.532% and will mature on June 11, 2029. Compared to the yields of Treasury Bonds,
corporate bonds have been falling at a slower rate, indicating caution among investors.
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,
San Diego Gas & Electric Co. (USD) 3.95% 11/15/2041 made analysts' 'Conviction Buy' lists. (See the chart for
ADI indexes above.)
Andrew Robartes (
arobartes@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
Eldorado Resorts LLC 6% 4/1/2025 |
+ 0.2% |
| |
Aircastle LTD 5.125% 3/15/2021 |
+ 0.2% |
| - |
CSC Hldg LLC 5.25% 6/1/2024 |
-0.3% |
| |
B&G Foods Inc. 5.25% 4/1/2025 |
-0.6% |
|
Teva Pharmaceuticals Fin BV 6.75% 3/1/2028
Sprint Nextel Corp. 7.875% 9/15/2023
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
-0.02% |
-0.03% |
-0.34% |
1.41% |
5.77% |
7.27% |
| Mining |
-0.09% |
-0.97% |
-2.22% |
0.16% |
7.47% |
2.17% |
| Construction |
-0.07% |
-0.15% |
-0.15% |
3.40% |
8.09% |
6.49% |
| Manufacturing |
-0.09% |
-0.13% |
-0.50% |
1.97% |
7.38% |
6.36% |
| Transportion, Communication, Electric/Gas |
-0.04% |
-0.09% |
-0.27% |
2.54% |
7.65% |
7.29% |
| Wholesale |
-0.05% |
-0.19% |
-0.21% |
1.63% |
7.65% |
5.25% |
| Retail |
-0.08% |
-0.03% |
-0.18% |
3.64% |
10.28% |
8.12% |
| Finance, Insurance, Real-Estate |
-0.05% |
-0.10% |
-0.09% |
2.33% |
7.96% |
7.04% |
| Services |
-0.08% |
-0.11% |
-0.06% |
2.04% |
7.60% |
7.37% |
| Public Administration |
-0.19% |
0.54% |
1.05% |
2.44% |
7.27% |
13.51% |
| Energy |
-0.15% |
-0.86% |
-2.14% |
0.56% |
7.46% |
1.93% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
1. Kruger Packaging Hldg LP (CAD) 6% 6/1/2026 (05/28/2019):125MM Senior Unsecured Notes, Price at Issuance 100, Yielding 6%.
|
1. Twinset Spa: ¬170M 5 year senior secured floating-rate notes, Expected Q2 2019
2. Diamondback Energy Inc.: High-yield notes, Expected Q2 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 5/28/19 participants welcome a $125MM new corporate-bond offering by Kruger Packaging Hldg LP. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 5/24/19, with a net inflow of $4MM, 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) |
Road King Infrastructure LTD (5Y Sen USD MR14)
SuperValu Inc. (5Y Sen USD MR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Louis Dreyfus Corp., Service Corp. Intl., Lucid Energy Group LLC
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 18 bp (basis points), as of 05/29/19
- Net positive capital flows into high-yield ETFs & mutual funds
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