January 31, 2019

Valens Credit Weekly Insights for January 30, 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
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
DF – Dean Foods Company
SUM – Summit Materials, Inc.
TCG:GBR – Thomas Cook Group plc

Other Recent Analyses
Consumer Discretionary
BBY – Best Buy Co., Inc.
Materials
RPM – RPM International 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

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