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Valens Credit Weekly: AMKR, DAL, KIM, CSTM, FCX mis-priced/mis-rated. Also, XO iCDS diverging from XO CDS showing distress in credit markets

November 25, 2020

Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
AERCYHDISHEXPELB
Most Compelling Credit Rating Dislocations
BHCBZHCSTMCYHDISHGMEGISRUISX
Most Compelling CDS Market Mispricings
ANBZHDISHGTLBMGMMTORTDGWYNDX
Most Compelling Bond Market Mispricings
ADNTGMGPSHCAIRMLENMGMTWTRUHSWK

Highlighted Top Ideas
AMKR – Amkor Technology, Inc.
DAL – Delta Air Lines, Inc.
KIM – Kimco Realty Corporation

Aggregate Credit Market and Credit Fundamental Review
The IG market is currently fairly valued. HY and XO markets have seen CDS move wider than iCDS again recently even after markets have normalized. Overall, costs of borrowing rose dramatically in due to coronavirus concerns, before stabilizing again recently thanks to the Fed’s actions to calm markets. While the overblown reaction in credit markets has since moderated, HY and XO markets remain mispriced.