Valens Credit Weekly Insights for April 22, 2020
Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
AN, AXL, CYH, IRM, UIS
Most Compelling Credit Rating Dislocations
ADNT, AMD, BHC, BZH, CSTM, DOOR, EXPE, KBH, MTW, SKT
Most Compelling CDS Market Mispricings
AN, BHC, DAL, EXPE, FCX, GM, IRM, LB, TDG YRCW
Most Compelling Bond Market Mispricings
Highlighted Top Ideas
CSTM – Constellium SE
OC – Owens Corning
UHS – Universal Health Services, Inc.
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. Overall, costs of borrowing have risen dramatically in the last month due to coronavirus concerns, as the decline in the risk-free rate has been offset by corporate spreads (CDS levels) moving wider. The dramatic spike wider should be monitored to see if it slows in the near-term.
