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Valens Credit Weekly Insights for April 18, 2018

April 18, 2018

Credit and Market Mispricings

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

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

Most Compelling CDS Market Mispricings
AVP, BZH, CHK, CYH, DNR, JCP, MNI, PKD, SVU, YRCW

Most Compelling Bond Market Mispricings
AER, AMD, AVP, BLDR, CHK, CVI, ENDP, NFX, PKD, UIS

Highlighted Top Ideas
AN– AutoNation, Inc.
AVP – Avon Products, Inc.
UIS – Unisys Corporation

Other Recent Analyses
Materials
ENDP – Endo International plc

Informations Technology
AMKR
– Amkor Technology, 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. However, XO and HY markets appear mispriced in opposite directions. XO CDS appears to be overstating credit risk, with CDS levels not confirmed by iCDS. On the other hand, tight HY CDS spreads have not been confirmed by HY iCDS, signaling HY credit risk is being understated by the credit markets.  Overall, cost of borrowing have been rising thanks to improving economic activity and the rising risk free rate

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