Investment Grade Bond Research - August 16, 2019

Posted by Pierre Robert on Aug 16, 2019 5:22:00 PM

US STOCKS ROSE TODAY as investors continue to mull trade negotiations and signs of economic stagnation. Despite gains, today marks the end of a volatile week that saw an overall loss of about 1.5% in the DJIA. The ten-year and two-year treasury notes are separated by just 5.7 basis points at 1.55% and 1.493% respectively. S&P +1.44%, DOW +1.20%, NASDAQ +1.67%.

IN THE CORPORATE BOND SPACE, Blackrock TCP Capital Corp. priced $150 million in senior unsecured notes. The notes, which mature on August 23, 2024, yield 3.9%. The finance company intends to use the proceeds to repay outstanding debt and invest in portfolio companiesADI 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, Mattel Inc. (USD) 6.75% 12/31/2025 made analysts' 'Conviction Buy' list. (See the chart for ADI Indices above) Andrew Robartes
Key Gainers and Losers Volume Leaders
+   General Electric Co. 2.7% 10/9/2022 + 3.2%
  AT&T Inc. 5.25% 3/1/2037 + 0.9%
-   CVS Health Corp. 5.05% 3/25/2048 -0.1%
  Altria Group Inc. 4.8% 2/14/2029 -0.2%
Anheuser-Busch Inbev Worldwide Inc.   5.55% 1/23/2049
Comcast Corp.   4.7% 10/15/2048
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.11% 0.32% 1.53% 3.03% 9.68% 9.61%
Mining 0.28% 1.15% 2.53% 5.38% 11.99% 10.50%
Construction 0.22% 0.67% 3.06% 6.22% 10.33% 9.53%
Manufacturing 0.34% 1.35% 3.49% 6.56% 11.31% 10.42%
Transportion, Communication, Electric/Gas 0.35% 1.55% 4.61% 8.18% 14.47% 13.63%
Wholesale 0.33% 1.02% 2.68% 5.15% 10.99% 10.16%
Retail 0.39% 1.51% 3.98% 7.33% 12.46% 11.97%
Finance, Insurance, Real-Estate 0.26% 0.92% 2.56% 4.76% 9.37% 9.73%
Services 0.37% 1.35% 3.53% 6.43% 11.10% 11.04%
Public Administration 0.30% 0.83% 1.57% 2.75% 4.89% 6.17%
Energy 0.26% 1.11% 2.56% 5.52% 12.21% 10.70%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-19T152716.871

New Issues New Issues [Continued]

1. Kimco Realty Corp. (USD) 3.7% 10/1/2049 (08/15/2019): 350MM Senior Unsecured Notes, Price at Issuance 98.832, Yielding 3.76%.

2. Assurant Inc. (USD) 3.7% 2/22/2030 (08/15/2019): 350MM Senior Unsecured Notes, Price at Issuance 99.965, Yielding 3.7%.


Additional Commentary

NEW ISSUANCE WATCH: on 8/16/19 participants welcome $150 million in new corporate-bond offerings by Blackrock TCP Capital Corp. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 8/9/19, with a net outflow of $4 billion since October 2018.
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Hovnanian Enterprises Inc. (5Y Sen USD XR14)
Controladora Mabe SA de CV (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD XR14)
San Miguel Corp. (5Y Sen USD CR14)

unnamed - 2019-08-01T153123.074

Loans and Credit Market Overview


Deals recently freed for secondary trading, notable secondary activity:
  • US Foods Inc., Duerre Group, Albertsons LLC, Helical PLC
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 was 25 bp (basis points), as of 08/16/19
  • Net positive capital flows into high-yield ETFs & mutual funds

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

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