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Valens Credit Weekly Insights for November 30, 2022

November 30, 2022

Featured Top Idea
UBER – Uber Technologies, Inc.
Action: Buy 2026 8.000% Bonds, CUSIP: 90353TAD2 
(7.434% YTW, 4.494% iYTW)
Buy 2027 7.500% Bonds, CUSIP: 90353TAE0 (7.077% YTW, 4.477% iYTW)
Buy 2028 6.250% Bonds, CUSIP: 90353TAG5 (7.192% YTW, 4.502% iYTW)
Buy 2029 4.500% Bonds, CUSIP: 90353TAK6 (7.180% YTW, 4.327% iYTW)

Aggregate Credit Market and Credit Fundamental Review Since the Fed started communicating plans to aggressively raise rates in the face of inflationary pressures, the Fed has changed from a dovish benefit to cost to borrow, to a hawkish headwind. After the recent ~250bps rise in the risk-free rate from 2021 lows, aggregate corporate cost to borrow has risen to levels that are at the high end of the prior bull market. They are nowhere near levels that signal a freeze or panic but are high enough to put pressure on corporates borrowing for growth. The newly elevated cost to borrow for corporates may make refinancing decisions and growth investment decisions tougher. This is why it is important that corporations have such healthy financial statements currently.

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