Valens Credit Weekly Insights for February 17, 2021

Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
CYH, DISH, EXPE, LB, UIS
Most Compelling Credit Rating Dislocations
BZH, CSTM, CYH, DBD, GIS, HCC, NFLX, R, VREX, X
Most Compelling CDS Market Mispricings
AN, BZH, CSTM, DAL, DISH, MAT, MGM, R, UIS, X
Most Compelling Bond Market Mispricings
BZH, CAR, DBD, GM, GPS, HCA, MGM, NFLX, UHS, X

Highlighted Top Ideas
AXL – American Axle & Manufacturing Holdings, Inc.
TPR – Tapestry, Inc.
UAA – Under Armour, 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 even after markets have normalized. Overall, costs of borrowing rose dramatically in due to coronavirus concerns, before stabilizing again recently thanks to the Fed’s actions to calm markets. While the overblown reaction in credit markets has since moderated, HY and XO markets remain mispriced.