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 ADI indexes above.) Andrew Robartes (arobartes@advantagedata.com).

 

Key Gainers and Losers	Volume Leaders
+   Wells Fargo & Co. 4.4% 6/14/2046 + 0.8%   CSX Corp. 4.25% 3/15/2029 + 0.3% -   Comcast Corp. 4.7% 10/15/2048 -1.0%	Qualcomm Inc.   4.3% 5/20/2047 Wells Fargo & Co.   4.4% 6/14/2046

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.29% -0.61% 0.49% 2.81% 5.12% 5.04% Mining 0.05% 0.22% 0.54% 2.98% 6.26% 7.16% Construction 0.08% 0.30% 1.14% 3.23% 4.77% 6.48% Manufacturing -0.01% 0.21% 0.84% 2.56% 4.73% 6.17% Transportion, Communication, Electric/Gas 0.03% 0.16% 0.98% 3.43% 6.00% 8.58% Wholesale -0.05% 0.14% 0.95% 3.02% 5.74% 6.79% Retail -0.04% 0.23% 0.79% 2.56% 4.96% 6.70% Finance, Insurance, Real-Estate 0.00% 0.19% 0.85% 2.44% 4.45% 6.56% Services 0.05% 0.30% 0.89% 2.57% 4.76% 7.18% Public Administration -0.05% 0.16% 0.72% 1.45% 1.84% 4.36% Energy 0.04% 0.15% 0.54% 3.06% 6.40% 8.96%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. Berry Global Inc. (USD) 4.875% 7/15/2026 Reg S (05/20/2019):1250MM First Lien Notes, Price at Issuance 100, Yielding 4.88%. 2. Berry Global Inc. (USD) 4.875% 7/15/2026 144A (05/20/2019):1250MM First Lien Notes, Price at Issuance 100, Yielding 4.88%.

NEW ISSUANCE WATCH: on 5/20/19 participants welcome a $1250M 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 MR14) Atmos Energy Corp. (5Y Sen USD MR14)

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

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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