Valens Credit Weekly Insights for January 23, 2019
Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
AVP, CVI, CYH, NAV, UIS
Most Compelling Credit Rating Dislocations
AKS, AMAG, AMD, BZH, LEN, MTW, NAV, RIG, X, YRCW
Most Compelling CDS Market Mispricings
AKS, AVP, CHK, CYH, DISH, ESV, JCP, RAD, X, YRCW
Most Compelling Bond Market Mispricings
AKS, AVP, CVI, DISH, DNR, FCX, JCP, LEE, MTOR, R
Highlighted Top Ideas
AMD – Advanced Micro Devices, Inc.
BZH – Beazer Homes USA, Inc.
UIS – Unisys Corporation
Other Recent Analyses
RAD – Rite Aid Corporation
DNR – Denbury Resources 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