February 1, 2018

Valens Credit Weekly Insights for January 31, 2018


Credit and Market Mispricings

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

Most Compelling Credit Rating Dislocations
AMD, BLDR, CHK, EXPE, JCP, MNI, R, UIS, X, YRCW

Most Compelling CDS Market Mispricings
AVP, CHK, CYH, ESV, JCP, MNI, NFX, PKD, SVU, YRCW

Most Compelling Bond Market Mispricings
AKS, AMD, AVP, BLDR, CHK, CVI, FCX, JCP, PKD, UIS

Highlighted Top Ideas
AXL – American Axle & Manufacturing Holdings, Inc.
JCP – J. C. Penney Company, Inc.
VRX – Valeant Pharmaceuticals International, Inc.

Other Recent Analyses
Consumer Discretionary
RCL – Royal Caribbean Cruises Ltd.
Industrials
MTOR – Meritor, 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, as are HY markets. However, even after XO CDS has normalized in the last several months, it remains substantially above XO iCDS levels. This indicates that the XO market is overstating credit risk.

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