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FIXED INCOME
RESEARCH
René L. Robert
Head of Group
Michael F. Brown
Head of Research
Chris M. Stehli
Market Analyst
Mark T...
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing ...
Additional Commentary
NEW ISSUANCE WATCH: Participants welcomed $6.75B in offerings on 6/8/16, including those of Dell
Inc...
Advantage_Data_High_Yield_Summary_06_10_16
Advantage_Data_High_Yield_Summary_06_10_16
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Advantage_Data_High_Yield_Summary_06_10_16

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Advantage_Data_High_Yield_Summary_06_10_16

  1. 1. FIXED INCOME RESEARCH René L. Robert Head of Group Michael F. Brown Head of Research Chris M. Stehli Market Analyst Mark T. McKenna Market Analyst Sean W. Quinlan Market Analyst David L. Chau Market Analyst Michael C. Lopus Quantitative Analyst Minh T. Vo Quantitative Analyst BOSTON One Federal Street Floor 25 Boston, MA 02110 TEL: 617.261.9700 FAX: 617.261.9696 NEW YORK 244 Madison Avenue Suite 233 New York, NY 10016 TEL: 212.227.8870 FAX: 212.208.3059 LONDON 155 Minories, Suite 140 London EC3N 1AD UK TEL: +44 (0) 207.096.0983 FAX: +44 (0) 871.251.0863 HIGH YIELD BOND RESEARCH June 10, 2016 Bond Markets Investment-grade corporate bonds rallied, in line with Treasuries, as market participants favored quality over risk. Overall, investors avoided riskier positions due to abounding uncertainty, with the June 23 U.K. referendum on EU membership and upcoming central bank decisions. Also factoring into Friday's market picture, crude oil futures continued to fall, sinking below $50 a barrel. In equity markets, shares dropped - the S&P 500 was down 0.92% on the day, following losses in Europe and Asia. High-grade corporates, along with Treasury notes, continued to rise today; accordingly, the yield on the 10-year U.S. Treasury note fell 4 basis points from 1.68% to 1.64%. Banks are falling as these yields continue to shrink, wiping out most of the market’s gains from this week. Goldman Sachs took the biggest losses. Bond yields are retreating as the upcoming 'Brexit' vote approaches. "The U.S. indexes are trailing what is happening overseas this morning. We've seen a decline in crude prices and strength in U.S. Treasuries and that combination adds ups to ared day," said Paul Springmeyer, investment management director at U.S. Bank in Minneapolis. "There still remains quite a bit of uncertainty out there ... and returns will be fairly muted until those question marks are resolved" Springmeyer said. The yield on the 10-year German bund fell to another record low of 0.021% today. Government debt also fell to record lows in the U.K. and Japan, where 10-year government bonds are already trading in negative territory, at -0.153%. In other news, U.S. crude oil futures are trading at $48.88 (as of 5:00 PM ET), which is a $-1.49 and -2.95% change from yesterday’s close. Oil reached its year-high price yesterday, clocking in at $52.86 per barrel. Gasoline, heating oil and natural gas prices also sank. The S&P was down 0.92%, while the U.S. dollar strengthened compared to its rivals; however, this could change in the near future, as investors are skeptical about next week’s Federal Reserve meeting which ends on Wednesday. ADI (Advantage Data Inc.) data showed a net daily yield increment in investment-grade versus high-yield indexes. High-grade corporate bonds decisively outpaced their high-yield counterparts in net prices. Among investment-grade bonds showing concurrence of top price gains, Dell Inc. 7.1% 4/15/2028 made some analysts' 'Conviction Buy' lists. (See chart for Ford Motor Co. bonds, next page.) Sean Quinlan squinlan@advantagedata.com Key Gainers and Losers Volume Leaders + Weatherford Intl LTD 5.125% 9/15/2020 + 1.7% Dell Computer Corp. 7.1% 4/15/2028 + 2.1% - AGCO Corp. 5.875% 12/1/2021 -4.1% Weatherford Intl LTD 9.625% 3/1/2019 Centene Corp. 4.75% 5/15/2022 Weatherford Intl LTD 4.5% 4/15/2022 AdvantageData Click Here for a Free Trial to Advantage Data Charting
  2. 2. Industry Returns Tracker Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.01% 0.97% 2.27% 8.47% 9.74% 1.65% Mining 0.29% 3.45% 9.40% 34.97% 28.10% -6.64% Construction 0.05% 0.45% 1.61% 6.94% 4.52% 2.20% Manufacturing 0.06% 0.87% 2.72% 7.53% 7.72% 2.65% Transportion, Communication, Electric/Gas -0.03% 0.96% 2.24% 6.62% 7.97% 2.60% Wholesale 0.12% 0.73% 0.34% 7.90% 7.95% 1.29% Retail 0.00% 0.67% 0.60% 4.45% 6.76% 3.39% Finance, Insurance, Real-Estate 0.02% 0.72% 1.30% 4.35% 4.67% 4.18% Services 0.01% 0.70% 1.39% 4.73% 6.54% 5.29% Public Administration 0.14% 0.44% 0.49% 3.38% 1.75% 6.98% Energy 0.29% 3.59% 8.86% 32.17% 22.35% -5.86% Total returns (non-annualized) by rating, market weighted. New Issues Forward Calendar 1. Weatherford International LTD (USD) 7.75% 6/15/2021 (06/09/2016): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7.75%. 2. Scf Capital (USD) 3.375% 6/16/2023 144A (06/09/2016): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.38%. 3. JC Penney Co. Inc. (USD) 5.875% 7/1/2023 144A (06/09/2016): 500MM Secured Notes, Price at Issuance 100, Yielding 5.88%. 4. West Corp. (USD) 4.75% 7/15/2021 144A (06/09/2016): 400MM Secured Notes, Price at Issuance 100, Yielding 4.75%. 5. Gogo Intermediate Holdings LLC (USD) 12.5% 7/1/2022 144A (06/09/2016): 525MM Secured Notes, Price at Issuance 100, Yielding 12.5%. 6. Weatherford International LTD (USD) 8.25% 6/15/2023 (06/10/2016): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 8.25%. 1. AMSURG CORP.: $3.7 billion in new financing. Expected 2nd Quarter 2016. 2. DYNEGY INC.: $1.85 billion secured debt facility. Expected 2nd Quarter 2016. 3. SUNOPTA FOODS INC.: $300 million senior secured notes due 2023. Expected 2nd Quarter 2016. 4. MTS SYSTEMS CORP.: $250 million senior notes. Expected 2nd Quarter 2016. 5. SOLARWINDS: $580 million senior secured notes. Expected 2nd Quarter 2016. 6. STERIGENICS-NORDION HLDGS LLC: $120 million senior secured notes. Expected 2nd Quarter 2016.
  3. 3. Additional Commentary NEW ISSUANCE WATCH: Participants welcomed $6.75B in offerings on 6/8/16, including those of Dell Inc. ($3.25B), DISH Network Corp. ($2B), and Cheniere Energy Partners LP ($1.5B). The most recent data showed money flowed into high-yield ETFs/mutual funds for the week ended 6/8/16, with a net influx of $748.153MM, rendering 92 of the 160 previous weeks with net inflows. Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS) Parker Drilling Co. (5Y Sen USD MR14) HealthSouth Corp. (5Y Sen USD XR14) Chesapeake Energy Corp. (5Y Sen USD XR14) MBIA Insurance Corp. (5Y Sen USD CR14) Loans and Credit Market Overview SYNDICATED LOANS HIGHLIGHTS: Deals recently freed for secondary trading, notable secondary activity: Life Time Fitness Inc. Cushman & Wakefield Eze Software Group OVERALL CREDIT MARKET: A net positive skew on improvement in the US economy remains intact, although a view builds that a lag in the rate of global economic recovery is in effect. Positive effects remained in force: TED spread held below 50 bp (basis points), in particular, <41 bp as of 6/10/16 Fed maintains a measured rate-increase stance, tightening by 0.25%-0.50% in Dec. '15 Net positive capital flows into high-yield ETFs & mutual funds (inflows for 92 of 160 previous weeks) Copyright 2016 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com 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.

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