Valens Credit Weekly Insights for February 27, 2019
Credit and Market Mispricings
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
