Research

Valens Credit Weekly Insights for May 22, 2019

Credit and Market Mispricings


Most Compelling Credit v Equity Market Mispricings
AVP, CYH, DISH, HTZ, UIS


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


Most Compelling CDS Market Mispricings
AER, AXL, BZH, CHK, DISH, HTZ, LB, R, RIG, UIS  


Most Compelling Bond Market Mispricings
ADNT, AN, CHK, DISH, MDR, MGM, R, RAD, RIG, X


Highlighted Top Ideas
FCX– Freeport-McMoRan Inc.
LEN – Lennar Corporation
URI – United Rentals, Inc.


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.