Featured Top Idea
F – Ford Motor Company
Action: Buy 2028 6.625% Bonds CUSIP: 345370BT6 (4.554% YTW, 4.439% iYTW)
Buy 2030 9.625% Bonds CUSIP: 345370CX6 (5.014% YTW, 4.560% iYTW)
Buy 2031 7.450% Bonds CUSIP: 345370CA6 (5.214% YTW, 4.560% iYTW)
Buy 2032 3.250% Bonds CUSIP: 345370DA5 (5.554% YTW, 4.965% iYTW)
Buy 2032 6.100% Bonds CUSIP: 345370DB3 (5.578% YTW, 4.965% iYTW)...
Featured Top Idea
DFH – Dream Finders Homes Inc.
| Action: | Buy 2028 3.875% Bonds CUSIP: 682189AQ8 (7.054% YTW, 6.094% iYTW) |
Aggregate Credit Market and Credit Fundamental Review
Since the Fed started communicating plans to aggressively raise rates in the face of inflationary pressures, the Fed has changed from a dovish benefit to cost to borrow, to a hawkish headwind. After the recent ~250bps rise in the risk-free rate from 2021 lows, aggregate corporate cost to borrow has risen to levels that are at the high end of the prior bull market. They are nowhere near levels that signal a freeze or panic but are high enough to put pressure on corporates borrowing for growth. The newly elevated cost to borrow for corporates may make refinancing decisions and growth investment decisions tougher. This is why it is important that corporations have such healthy financial statements currently....
UAA – Base Case CDS 320bps
Base Case iCDS 219bps, Negative Case iCDS 296bps, 2030 7.250% Bond YTW of 7.467%, iYTW of 5.787%
Ba3 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens
Low Refinancing Need...
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Featured Top Idea
HLX – Helix Energy Solutions Group
Action: Buy 2029 9.750% Bond CUSIP: 42330PAL1 (7.325% YTW, 6.215% iYTW)...
DFH – Base Case iCDS 246bps,
Negative Case iCDS 692bps, 2030 6.875% Bond YTW of 7.054%, iYTW of 6.094%,
B1 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens,
Low Refinancing Need...
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HLX – Base Case iCDS 263bps,
Negative Case iCDS 456bps, 2029 9.750% Bond YTW of 7.325%, iYTW of 6.215%,
Ba3 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens,
Low Refinancing Need...
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Featured Top Idea
F – Ford Motor Company
Action: Buy 2028 6.625% Bonds CUSIP: 345370BT6 (4.554% YTW, 4.439% iYTW)
Buy 2030 9.625% Bonds CUSIP: 345370CX6 (5.014% YTW, 4.560% iYTW)
Buy 2031 7.450% Bonds CUSIP: 345370CA6 (5.214% YTW, 4.560% iYTW)
Buy 2032 3.250% Bonds CUSIP: 345370DA5 (5.554% YTW, 4.965% iYTW)
Buy 2032 6.100% Bonds CUSIP: 345370DB3 (5.578% YTW, 4.965% iYTW)...
F – Base Case iCDS 84bps,
Negative Case iCDS 174bps, 2031 7.450% Bond YTW of 5.214%, iYTW of 4.560%,
Ba1 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens,
Low Refinancing Need...
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Featured Top Idea
XYZ – Block, Inc.
Action: Buy 2029 3.000% Bonds CUSIP: 22788CAA3 (4.556% YTW, 3.897% iYTW)...
NRG – CDS 93bps, iCDS 177bps
Negative Case iCDS 215bps, 2028 5.750% Bond YTW of 5.372%, iYTW of 5.326%
Ba1 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens
Low Refinancing Need...
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Featured Top Idea
CNC – Centene Corporation
| Action:Close Trade: | 2028 2.450% Bonds CUSIP: 15135BAY7 2029 4.625% Bonds CUSIP: 15135BAT8 2030 3.375% Bonds CUSIP: 15135BAU5 2030 3.000% Bonds CUSIP: 15135BAW1 2031 2.500% Bonds CUSIP: 15135BAX9 2031 2.625% Bonds CUSIP: 15135BAZ4 |
Aggregate Credit Market and Credit Fundamental Review
Since the Fed started communicating plans to aggressively raise rates in the face of inflationary pressures, the Fed has changed from a dovish benefit to cost to borrow, to a hawkish headwind. After the recent ~250bps rise in the risk-free rate from 2021 lows, aggregate corporate cost to borrow has risen to levels that are at the high end of the prior bull market. They are nowhere near levels that signal a freeze or panic but are high enough to put pressure on corporates borrowing for growth. The newly elevated cost to borrow for corporates may make refinancing decisions and growth investment decisions tougher. This is why it is important that corporations have such healthy financial statements currently....
CRWD – Base Case iCDS 26bps
Negative Case iCDS 48bps, 2029 3.000% Bond YTW of 4.556%, iYTW of 3.897%
Baa3 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens
Low Refinancing Need...
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XYZ – Base Case iCDS 69bps
Negative Case iCDS 118bps, 2031 3.500% Bond YTW of 4.827%, iYTW of 4.305%
Ba2 Rating from Moody’s, IG3+ (equivalent to A1) Rating from Valens
Low Refinancing Need...
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Featured Top Idea
EAT – Brinker International, Inc.
Action: Buy 2030 8.250% Bonds CUSIP: 109641AK6 (5.817% YTW, 4.875% iYTW)...
CIEN – Base Case iCDS 60bps,
Negative Case iCDS 87bps, 2030 4.000% Bond YTW of 5.188%, iYTW of 4.199%,
Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens,
Low Refinancing Need...
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EAT – Base Case iCDS 113bps
Negative Case iCDS 130bps, 2030 8.250% Bond YTW of 5.817%, iYTW of 4.875%
Ba3 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens
Low Refinancing Need...
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Featured Top Idea
BRBR – BellRing Brands, Inc.
| Action: | Close Trade: Buy 2030 7.000% Bonds, CUSIP: 07831CAA1 |
Aggregate Credit Market and Credit Fundamental Review
Since the Fed started communicating plans to aggressively raise rates in the face of inflationary pressures, the Fed has changed from a dovish benefit to cost to borrow, to a hawkish headwind. After the recent ~250bps rise in the risk-free rate from 2021 lows, aggregate corporate cost to borrow has risen to levels that are at the high end of the prior bull market. They are nowhere near levels that signal a freeze or panic but are high enough to put pressure on corporates borrowing for growth. The newly elevated cost to borrow for corporates may make refinancing decisions and growth investment decisions tougher. This is why it is important that corporations have such healthy financial statements currently....
BRBR – Base Case iCDS 166bps,
Negative Case iCDS 229bps, 2030 7.000% Bond YTW of 5.810%,
iYTW of 5.519%, B1 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens,
Low Refinancing Need...
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Featured Top Idea
ON – ON Semiconductor Corporation
| Action: | Buy 2028 3.875% Bonds CUSIP: 682189AQ8 (5.172% YTW, 4.379% iYTW) |
Aggregate Credit Market and Credit Fundamental Review
Since the Fed started communicating plans to aggressively raise rates in the face of inflationary pressures, the Fed has changed from a dovish benefit to cost to borrow, to a hawkish headwind. After the recent ~250bps rise in the risk-free rate from 2021 lows, aggregate corporate cost to borrow has risen to levels that are at the high end of the prior bull market. They are nowhere near levels that signal a freeze or panic but are high enough to put pressure on corporates borrowing for growth. The newly elevated cost to borrow for corporates may make refinancing decisions and growth investment decisions tougher. This is why it is important that corporations have such healthy financial statements currently....
WMS – Base Case iCDS 111bps,
Negative Case iCDS 133bps, 2030 6.375% Bond YTW of 5.352%, iYTW of 4.882%,
Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens,
Low Refinancing Need...
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