Valens Credit Weekly Insights for February 12, 2020
Most Compelling Credit v Equity Market Mispricings
AN, AXL, CYH, HTZ, UIS
Most Compelling Credit Rating Dislocations
ADNT, AMD, BHC, BZH, CSTM, DOOR, EXPE, KBH, MTW, SKT
Most Compelling CDS Market Mispricings
AKS, AN, AXL, AVP, BHC, CHK, IRM, RIG, UIS, WYND
Most Compelling Bond Market Mispricings
AKS, AMAG, BZH, DNR, GME, MTW, RAD, IRM, RIG, UIS
Highlighted Top Ideas
HTZ – Hertz Global Holdings, Inc.
IRM – Iron Mountain Incorporated
RAD – Rite Aid Corporation
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.