Valens Credit Weekly Insights for May 8, 2019

May 9, 2019

Credit and Market Mispricings

Most Compelling Credit v Equity Market Mispricings

Most Compelling Credit Rating Dislocations

Most Compelling CDS Market Mispricings

Most Compelling Bond Market Mispricings

Highlighted Top Ideas
AMD – Advanced Micro Devices, Inc.
BBY – Best Buy Co., Inc.
SUM – Summit Materials, Inc.

Aggregate Credit Market and Credit Fundamental Review 
JCP tops our quantitative outlier report this week.

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.