Valens Credit Weekly Insights for March 13, 2019
Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
AVP, CVI, CYH, DISH, UIS
Most Compelling Credit Rating Dislocations
AMAG, AMD, BZH, KBH, LEN, MTW, NAV, RIG, X, YRCW
Most Compelling CDS Market Mispricings AVP, CHK, CYH, DF, DISH, DNR, ESV, JCP, RAD, YRCW
Most Compelling Bond Market Mispricings AKS, AVP, CVI, DISH, DF, DNR, JCP, LEE, MTOR, R
Highlighted Top Ideas
EXPE – Expedia Group, Inc.
AXL – American Axle & Manufacturing Holdings, Inc.
X – United States Steel Corporation
Other Recent Analyses
UVV – Universal Corporation
MTW – The Manitowoc Company, 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