Valens Credit Weekly Insights for January 22, 2020
Most Compelling Credit v Equity Market Mispricings
AER, AVP, CYH, HTZ, UIS
Most Compelling Credit Rating Dislocations
ADNT, AMD, BHC, BZH, CSTM, DOOR, EXPE, KBH, MTW, SKT
Most Compelling CDS Market Mispricings
AER, AKS, AN, AVP BHC, CHK, DISH, RAD, RIG, WYND
Most Compelling Bond Market Mispricings
ADNT, AKS, AMAG, CSTM, DNR, MTW, RAD, RFP, RIG, UIS
Highlighted Top Ideas
BZH – Beazer Homes USA, Inc.
DISH – DISH Network Corporation
MTW – The Manitowoc Company, Inc.
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.