Research

Valens Credit Weekly Insights for April 24, 2019

Credit and Market Mispricings

Most Compelling Credit v Equity Market Mispricings
AVP, CYH, DISH, HTZ, UIS


Most Compelling Credit Rating Dislocations
AMDBLDRBZHKBHLENMTWNAVRIGXYRCW

Most Compelling CDS Market Mispricings
AMDCYHDFDISHESVHTZJCPRADX 

Most Compelling Bond Market Mispricings
AVPCHKCVICYHDBDDFDISHDNRJCPR

Highlighted Top Ideas
BZH – Beazer Homes USA, Inc.
DF – Dean Foods Company
DNR – Denbury Resources Inc.


Aggregate Credit Market and Credit Fundamental Review 
JCP tops our quantitative outlier report this week.

IG markets are currently fairly valued. XO and HY markets have also moved to fairly valued levels, with CDS converging towards iCDS levels. Overall, cost of borrowing have reversed their trend higher through 2018 so far in 2019, as both the risk free rate and corporate spreads (CDS levels) have tightened. Lower cost for borrowing is favorable for refinancing and borrowing for new credit creation.