Valens Credit Weekly Insights for November 20, 2019
Most Compelling Credit v Equity Market Mispricings
AVP, CYH, DISH, HTZ, UIS
Most Compelling Credit Rating Dislocations
ADNT, AMD, BHC, BZH, CSTM, DOOR, EXPE, KBH, LEN, MTW
Most Compelling CDS Market Mispricings
AKS, AN, BHC, BZH, CHK, DISH, RAD, RIG, WYND, X
Most Compelling Bond Market Mispricings
ADNT, AMAG, CAR, CSTM, DNR, MGM, MTW, RAD, RIG, UIS
Highlighted Top Ideas
CSTM – Constellium SE
GT – The Goodyear Tire & Rubber Company
URI – United Rentals, Inc.
Aggregate Credit Market and Credit Fundamental Review
IG and XO markets are currently fairly valued. HY markets have seen CDS move wider than iCDS again recently. Overall, costs 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 mostly tightened. Lower cost for borrowing is favorable for refinancing and borrowing for new credit creation.