Valens Credit Weekly Insights for June 5, 2019

June 6, 2019

Credit and Market Mispricings

Most Compelling Credit v Equity Market Mispricings

Most Compelling Credit Rating Dislocations

Most Compelling CDS Market Mispricings

Most Compelling Bond Market Mispricings

Highlighted Top Ideas
RFP – Resolute Forest Products Inc.
SKT – Tanger Factory Outlet Centers, Inc.
UNT – Unit Corporation

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

Aggregate Credit Market and Credit Fundamental Review

IG markets are currently fairly valued. XO and HY markets have also moved to fairly valued levels, with CDS converging towards iCDS levels. Overall, cost 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 tightened. Lower cost for borrowing is favorable for refinancing and borrowing for new credit creation.

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