February 27, 2019

Valens Credit Weekly Insights for February 27, 2019


Credit and Market Mispricings

AVP, CVI, CYH, DISH, UIS

Most Compelling Credit Rating Dislocations

AMAG, AMD, BZH, KBH, LEN, MTW, NAV, RIG, X, YRCW

Most Compelling CDS Market Mispricings

AVP, CHK, CYH, DF, DISH, ESV, JCP, RAD, X, YRCW

Most Compelling Bond Market Mispricings

AKS, AVP, CVI, DISH, DF, DNR, JCP, LEE, MTOR, R  

Highlighted Top Ideas
LEN – Lennar Corporation
KBH – KB Home.
YRCW – YRC Worldwide Inc.

Other Recent Analyses
Industrials
URI – United Rentals, Inc.

Quantitative Credit Outlier Report Review
JCP
tops our quantitative outlier report this week.

Aggregate Credit Market and Credit Fundamental Review

IG markets are currently fairly valued. XO markets have also moved to fairly valued levels, with iCDS converging towards CDS levels. However, the HY market appears mispriced. HY CDS appears to be understating credit risk, with CDS levels not confirmed by iCDS. Overall, cost of borrowing have been rising thanks to improving economic activity and the rising risk free rate

 

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