Valens Credit Weekly Insights for August 28, 2019
Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
AVP, CYH, DISH, HTZ, UIS
Most Compelling Credit Rating Dislocations
ADNT, AMD, BHC, BZH, CSTM, DOOR, EXPE, KBH, LEN, MTW
Most Compelling CDS Market Mispricings
AER, BZH, CHK, CYH, CSTM, DISH, RAD, RIG, UIS, X
Most Compelling Bond Market Mispricings
ADNT, CSTM, DNR, GTT, MDR, MGM, MTW, RAD, SKT, UIS
Highlighted Top Ideas
CSTM – Constellium SE
FCX – Freeport-McMoRan Inc.
MDR – McDermott International, Inc.
Aggregate Credit Market and Credit Fundamental Review
IG and XO markets are currently fairly valued. HY markets have seen CDS move wider than iCDS again recently. Overall, costs 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 mostly tightened. Lower cost for borrowing is favorable for refinancing and borrowing for new credit creation.
