July 11, 2019

Valens Credit Weekly Insights for July 6, 2019


Credit and Market Mispricings

Most Compelling Credit v Equity Market Mispricings
AVP, CYH, DISH, HTZ, UIS

Most Compelling Credit Rating Dislocations
ADNT, AMD, BHC, BZH, CSTM, EXPE, KBH, LEN, MTW, YRCW

Most Compelling CDS Market Mispricings
AER, BZH, CHK, DISH, MTOR, R, RIG, TMUS, UIS, X

Most Compelling Bond Market Mispricings
ADNT, AER, CSTM, CVI, GTT, MDR, MGM, MTW, RAD, SKT

Highlighted Top Ideas
DBD – Diebold Nixdorf, Incorporated
MGM – MGM Resorts International
WYND – Wyndham Destinations, Inc.

Quantitative Credit Outlier Report Review
TCG:GBR tops our quantitative outlier report this week.

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.