October 26, 2017

Valens Credit Weekly Insights for October 25, 2017


Credit and Market Mispricings

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

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

Most Compelling CDS Market Mispricings
AVP, CHK, CYH, ESV, FTR, JCP, MNI, PKD, UIS, SVU

Most Compelling Bond Market Mispricings
AMD, ATW, BLDR, AVP, CHK, CYH, FTR, MDR, PKD, SVU

Highlighted Top Ideas
AKS – AK Steel Holding Corporation
BLDR – Builders FirstSource, Inc.
MDR – McDermott International, Inc.

Other Recent Analyses
Consumer Discretionary
AXL – American Axle & Manufacturing Holdings, Inc.
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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