Valens Credit Weekly Insights for July 29, 2020
Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
AN, AXL, CYH, DISH, IRM
Most Compelling Credit Rating Dislocations
AMD, BHC, BZH, CSTM, CYH, EXPE, KBH, LEE, MTW, SKT
Most Compelling CDS Market Mispricings
AN, BZH, DISH, GPS, IRM, LB, LEN, TDG, WYND, X
Most Compelling Bond Market Mispricings
DOOR, GM, GPS, HCA, IRM, LEN, MGM, TDG, TWTR, UHS
Highlighted Top Ideas
DISH – DISH Network Corporation
MDP – Meredith Corporation
WH – Wyndham Hotels & Resorts, Inc.
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.
