May 30, 2019

Valens Credit Weekly Insights for May 29, 2019


Credit and Market Mispricings


Most Compelling Credit v Equity Market Mispricings CYHDISHHTZAVPUIS 


Most Compelling Credit Rating Dislocations
AMDYRCWMTWNAVBZHXRIGLENCSTMKBH 

Most Compelling CDS Market Mispricings
DISHCHKRIGHTZLBAXLAERUISBZHR 

Most Compelling Bond Market Mispricings
MDRADNTDISHRIGRADCHKXMGMANR


Highlighted Top Ideas
CAR – Avis Budget Group, Inc.
CSTM – Constellium N.V.
LB – L Brands, Inc.

Quantitative Credit Outlier Report Review
TCG:GBR 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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