Investment Grade Bond Research - October 16, 2019

Posted by Pierre Robert on Oct 16, 2019 4:43:18 PM

WORLD BONDS AND STOCKS WERE MIXED. Multiple trade deals are in the works. Syria invasion falls out is also playing itself out. The 10-year note down 2.9 basis points. S&P -0.17, DOW -0.05, NASDAQ -0.29%.

INITIAL OPTIMISM OVER BREXIT AND PHASE 1 CHINA/US DEAL is giving way to a wait and see the situation. Hunger for concrete details in writing is evident. 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,  Monsanto Co. (USD) 4.4% 7/15/2044 made analysts' 'Conviction Buy' list (See the chart above for Monsanto Co. bonds above.) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Newell Rubbermaid Inc. 4.2% 4/1/2026 + 0.0%
  HSBC Hldg PLC 3.973% 5/22/2030 + 0.5%
-   CVS Health Corp. 5.05% 3/25/2048 -0.0%
  Anheuser-Busch Inbev Worldwide Inc. 5.55% 1/23/2049 -0.1%
  Molson Coors Brewing Co. 4.2% 7/15/2046 -0.2%
CVS Health Corp.   5.05% 3/25/2048
Oracle Corp.   2.95% 5/15/2025
HSBC Hldg PLC   3.973% 5/22/2030
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.00% -0.45% 0.98% 1.28% 5.89% 6.47%
Mining 0.09% -0.74% 1.01% 2.40% 11.63% 11.52%
Construction 0.02% -0.80% 1.34% 2.58% 9.23% 9.61%
Manufacturing 0.06% -0.70% 1.21% 3.07% 10.33% 10.77%
Transportion, Communication, Electric/Gas 0.12% -0.91% 1.53% 3.82% 13.37% 14.48%
Wholesale 0.06% -0.64% 1.06% 2.83% 11.24% 11.15%
Retail 0.08% -0.83% 1.20% 3.47% 11.79% 12.41%
Finance, Insurance, Real-Estate 0.04% -0.59% 0.97% 2.39% 9.14% 10.23%
Services 0.07% -0.75% 1.27% 2.96% 10.08% 11.34%
Public Administration 0.04% -0.49% 0.66% 1.53% 4.80% 6.94%
Energy 0.10% -0.77% 1.00% 2.31% 11.96% 11.61%
Total returns (non-annualized) by rating, market weighted.
New Issues New Issues [Continued]

1. Credit Agricole London (USD) 2.375% 1/22/2025 Reg S (10/15/2019): 1000MM Senior Preferred Security, Price at Issuance 99.639, Yielding 2.45%.

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

3. New York Life Global Funding (USD) FLT% 1/21/2022 144A (10/15/2019): 750MM Secured Notes, Price at Issuance 100.


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 CR14)
Ghana, Republic of (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed - 2019-09-09T165404.526

Loans and Credit Market Overview


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 35 bp (basis points), as of 10/16/19
  • 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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