Valens Credit Weekly Insights for January 15, 2020
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, MTW, SKT
Most Compelling CDS Market Mispricings
AKS, AN, AVP BHC, BZH, CHK, DISH, RAD, RIG, WYND
Most Compelling Bond Market Mispricings
ADNT, AKS, AMAG, CSTM, DNR, MTW, RAD, RFP, RIG, UIS
Highlighted Top Ideas
CHK – Chesapeake Energy Corporation
EXPE – Expedia Group, Inc.
X – United States Steel 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.