Valens Credit Weekly Insights for March 18, 2020
Most Compelling Credit v Equity Market Mispricings
AN, AXL, CYH, IRM, UIS
Most Compelling Credit Rating Dislocations
ADNT, AMD, BHC, BZH, CSTM, DOOR, EXPE, KBH, MTW, SKT
Most Compelling CDS Market Mispricings
AKS, AN, BHC, CHK, CSTM, GM, IRM, RIG, UIS, YRCW
Most Compelling Bond Market Mispricings
AKS, AMAG, BZH, GM, GME, IRM, MTW, RAD, RIG, VGR
Highlighted Top Ideas
CVS– CVS Health Corporation
GM – General Motors Company
VGR – Vector Group Ltd.
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.
