May 16, 2019

Valens Credit Weekly Insights for May 16, 2019


Credit and Market Mispricings

Most Compelling Credit v Equity Market Mispricings
AVPCYHDISHHTZUIS 


Most Compelling Credit Rating Dislocations
AMD, BZH, KBH, LEN, MTW, NAV, RIG, X, UIS, YRCW


Most Compelling CDS Market Mispricings
AKS, AN, CHK, DISH, FCX, HTZ, IEP, LB, X, YRCW


Most Compelling Bond Market Mispricings
AMAG, AVP, CHK, CVI, DBD, DISH, DNR, FCX, TDG, X

Highlighted Top Ideas
CVS– CVS Health Corporation
LEE – Lee Enterprises, Incorporated
RAD – Rite Aid Corporation
Q

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 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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