Investment Grade Bond Research - October 15, 2019

Posted by Pierre Robert on Oct 16, 2019 10:58:55 AM

BONDS AND STOCKS WERE UP BECAUSE OF BANKS LIKE JP Morgan reported much stronger earnings. The 10-year note up 3.8 basis points. S&P +1.00%, DOW +0.89, NASDAQ +1.24%.

MORE TROUBLING REVELATIONS CONCERNING THE UKRAINE PROBE. Testimony from the ex-ambassador and an ex-Russian advisor to the President showed alarm concerning the President's using Giuliani's firm to steer US policy in Ukraine. ADI proprietary index data showed a yield increment for high-yield versus high-grade bondsHigh-yield edged out high-grade. Among high-grade bonds showing topmost price gains at appreciable volumes traded,  SLM Corporation (USD) 5.625% 8/1/2033 made analysts' 'Conviction Buy' list (See the chart above for SLM Corporation bonds above.) Pierre Robert
 
Key Gainers and Losers Volume Leaders
+   HSBC Hldg PLC 3.973% 5/22/2030 + 0.2%
  PepsiCo. Inc. 2% 4/15/2021 + 0.1%
-   CVS Health Corp. 5.05% 3/25/2048 -0.2%
  GE Capital Intl. Funding Co. 4.418% 11/15/2035 -0.6%
HSBC Hldg PLC   3.973% 5/22/2030
IBM Corp.   3.5% 5/15/2029
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.30% -0.62% 0.81% 1.30% 5.85% 6.44%
Mining -0.25% -1.17% 0.13% 2.43% 11.58% 11.28%
Construction -0.35% -0.91% 0.56% 2.79% 9.42% 9.87%
Manufacturing -0.32% -1.00% 0.42% 3.14% 10.45% 10.84%
Transportion, Communication, Electric/Gas -0.39% -1.33% 0.37% 3.88% 13.42% 14.43%
Wholesale -0.29% -0.90% 0.41% 2.96% 11.59% 11.06%
Retail -0.36% -1.22% 0.27% 3.60% 11.80% 12.41%
Finance, Insurance, Real-Estate -0.25% -0.78% 0.36% 2.47% 9.20% 10.23%
Services -0.38% -1.08% 0.47% 3.18% 10.43% 11.75%
Public Administration -0.16% -0.59% 0.21% 1.65% 4.73% 6.91%
Energy -0.26% -1.24% 0.08% 2.37% 11.77% 11.28%
 
Total returns (non-annualized) by rating, market weighted.
New Issues New Issues [Continued]

1. Banque Ouest Africaine de Developpement (USD) 4.7% 10/22/2031 144A (10/15/2019): 830MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.7%.

2. Enmax Corp. (CAD) 3.331% 6/2/2025 (10/15/2019): 300MM Senior Unsecured Notes, Price at Issuance 99.996, Yielding 3.33%.

 

Additional Commentary


NEW ISSUANCE WATCH: on 10/10/19 participants welcome a $500M new corporate-bond offering by
Viper Energy. The most recent data showed a money flowed out of highyoutflow ETF/mutual funds for the week ended 9/27/2019, with a net outflow of $258 million.
 
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Hertz Corp. (5Y Sen USD MR14)
Ghana, Republic of (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed - 2019-09-09T165404.526

Loans and Credit Market Overview


SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:
  • Raytheon Co., Shearer's Foods Inc., Triumph Group Inc., Seagate Technology, B&G Foods Inc.
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 31 bp (basis points), as of 10/15/19
  • 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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