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Valens Credit Weekly Insights for May 19, 2021

May 19, 2021

Featured Top Idea
DAL – Delta Air Lines, Inc.
Trade: Buy 2024 2.900% Bonds CUSIP: 247361ZU5 (2.618% YTW, 1.328% iYTW)
Trade: Buy 2025 7.000% Bonds CUSIP: 247361ZX9 (2.716% YTW, 1.846% iYTW)
Trade: Buy 2026 7.375% Bonds CUSIP: 247361ZZ4 (3.319% YTW, 1.809% iYTWW)

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.