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Valens Credit Weekly Insights for January 20, 2021

January 20, 2021

Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
CYHDISHEXPELBUIS
Most Compelling Credit Rating Dislocations
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Most Compelling CDS Market Mispricings
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Most Compelling Bond Market Mispricings
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Highlighted Top Ideas
BZH – Beazer Homes USA, Inc.
MCK – McKesson Corporation
MGM – MGM Resorts International

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.