Investment Grade Bond Research - October 22, 2019

Posted by Andrew Robartes on Oct 22, 2019 5:14:36 PM
Find me on:

US STOCKS FELL SLIGHTLY TODAY amid European headlines regarding Brexit. Additionally, McDonald’s missed earnings expectations in a mixed third quarter and saw shares dip 5%. The 10-year Treasury note declined 3.7 bps. S&P -0.36%, DOW -0.15%, NASDAQ -0.72%

unnamed - 2019-09-09T165400.694

IN THE CORPORATE BOND SPACE, Netflix, Inc. (NFLX) priced $2 billion worth of senior unsecured notes due in 2030. The American streaming service will use the proceeds from these junk-rated bonds to finance new content, and potential acquisitions. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-grade edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Ford Motor Co. (USD) 4.346% 12/8/2026 made analysts' 'Conviction Buy' list. (See the chart above for Ford Motor Co. below) Andrew Robartes

Key Gainers and Losers Volume Leaders
+   CVS Health Corp. 4.3% 3/25/2028 + 0.1%
  Altria Group Inc. 5.95% 2/14/2049 + 0.2%
-   Southern Copper Corp. 3.875% 4/23/2025 -0.3%
  AT&T Inc. 4.35% 3/1/2029 -0.2%
Molson Coors Brewing Co.   4.2% 7/15/2046
Southern Copper Corp.   3.875% 4/23/2025
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.10% -0.01% 0.34% 1.01% 5.46% 6.36%
Mining -0.16% -0.03% -0.38% 2.24% 11.54% 11.82%
Construction -0.12% -0.10% 0.40% 2.23% 9.39% 10.41%
Manufacturing -0.15% 0.11% 0.23% 2.81% 10.74% 11.42%
Transportion, Communication, Electric/Gas -0.22% 0.03% 0.06% 3.37% 13.53% 15.04%
Wholesale -0.15% 0.26% 0.39% 2.68% 12.20% 11.98%
Retail -0.17% 0.21% 0.30% 3.44% 12.16% 13.18%
Finance, Insurance, Real-Estate -0.10% 0.14% 0.33% 2.31% 9.51% 10.73%
Services -0.16% 0.17% 0.38% 2.98% 10.68% 12.21%
Public Administration -0.12% 0.01% 0.18% 1.32% 4.70% 6.91%
Energy -0.18% 0.00% -0.41% 2.19% 11.92% 11.99%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-10-22T171237.431

New Issues New Issues [Continued]

1. Royal Bank of Canada (USD) 2.25% 11/1/2024 (10/21/2019): 1500MM Senior Unsecured Notes, Price at Issuance 99.778, Yielding 2.3%.

2. Delta Airlines (USD) 3.75% 10/28/2029 (10/21/2019): 600MM Senior Unsecured Notes, Price at Issuance 99.595, Yielding 3.8%.


Additional Commentary

NEW ISSUANCE WATCH: on 10/21/19 participants welcome a $750MM new corporate-bond offering by
United Rentals Inc. 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 XR14)
Weatherford International LTD (5Y Sen USD MR14)
Cable & Wireless Communication (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:
  • McDermott International Inc., Live Nation Entertainment Inc., Berry Plastics Corp. 

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 28bp (basis points), as of 10/22/19
  • Net positive capital flows into high-yield ETFs & mutual funds

Copyright 2019 Advantage Data Inc. All Rights Reserved.

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: 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

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