June 21, 2018

Valens Credit Weekly Insights for June 20, 2018


Credit and Market Mispricings

Most Compelling Credit v Equity Market Mispricings
AVP, CYH, MNI, NAV, UIS

Most Compelling Credit Rating Dislocations
AMD, MNI, MTOR, MTW, NAV, PKD, R, UIS, X, YRCW

Most Compelling CDS Market Mispricings
AVP, CHK, CVI, CYH, DNR, ENDP, HTZ, JCP, MNI, PKD

Most Compelling Bond Market Mispricings
AKS, AER, AMD, AVP, BZH, CHK, CVI, ENDP, PKD, VRX

Highlighted Top Ideas
AKS – AK Steel Holding Corporation
DLX – Deluxe Corporation
FCX – Freeport-McMoRan Inc.

Other Recent Analyses
Energy
RIG – Transocean Ltd.
Materials
AMD – Advanced Micro Devices, Inc.

Quantitative Credit Outlier Report Review
CYH tops our quantitative outlier report this week.

Aggregate Credit Market and Credit Fundamental Review
IG markets are currently fairly valued. Recently HY markets have also moved to fairly valued levels, with iCDS converging towards CDS levels. However, the XO market appears mispriced. XO CDS appears to be overstating credit risk, with CDS levels not confirmed by iCDS. Overall, cost of borrowing have been rising thanks to improving economic activity and the rising risk free rate

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