High Yield Bond Research - May 29, 2019

Posted by Andrew Robartes on May 29, 2019 5:21:11 PM
Find me on:
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.

unnamed - 2019-05-29T171526.155

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)

unnamed - 2019-05-28T172102.935

Loans and Credit Market Overview


Deals recently freed for secondary trading, 
notable secondary activity: 
  • Louis Dreyfus Corp., Service Corp. Intl., Lucid Energy Group LLC
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 

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