Valens Credit Weekly Insights for March 25, 2020
Credit and Market Mispricings
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
AN, CHK, CSTM, DAL, FCX, GM, IRM, RIG, UIS, YRCW
Most Compelling Bond Market Mispricings
AKS, AMAG, BZH, GM, GME, IRM, MTW, RAD, RIG, VGR
Highlighted Top Ideas
AXL – American Axle & Manufacturing Holdings, Inc.
CLW – Clearwater Paper Corporation
UBER – Uber Technologies, Inc.
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.