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Valens Credit Weekly Insights for March 17, 2021

March 17, 2021

Featured Top Idea
MGM – MGM Resorts International
Trade: Buy 2025 6.750% Bonds CUSIP: 552953CG4 (3.315% YTW, 1.615% iYTW)
Trade: Buy 2025 5.750% Bonds CUSIP: 552953CE9 (3.326% YTW, 1.766% iYTW)
Trade: Buy 2026 4.625% Bonds CUSIP: 552953CD1 (3.667% YTW, 1.557% iYTW)
Trade: Buy 2027 5.500% Bonds CUSIP: 552953CF6 (4.057% YTW, 1.937% iYTW)

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 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.