October 10, 2018

Valens Credit Weekly Insights for October 10, 2018


Credit and Market Mispricings

Most Compelling Credit v Equity Market Mispricings
AVP, CYH, HOV, NAV, UIS

Most Compelling Credit Rating Dislocations
AKS, AMD, CSTM, HK, JCP, MTW, NAV, R, X, YRCW

Most Compelling CDS Market Mispricings
AVP, CHK, CYH, DISH, DNR, ESV, HOV, HTZ, JCP, PKD

Most Compelling Bond Market Mispricings
AKS, AER, AVP, CHK, DISH, DNR, JCP, LEE, MTOR, PKD

Highlighted Top Ideas
AER – AerCap Holdings N.V.
AVP – Avon Products, Inc.
OC – Owens Corning

Other Recent Analyses
Energy
NFX – Newfield Exploration Company
Materials
MLM – Martin Marietta Materials, Inc.

Quantitative Credit Outlier Report Review
CYH tops our quantitative outlier report this week.

Aggregate Credit Market and Credit Fundamental Review
IG markets are currently fairly valued. XO markets have also moved to fairly valued levels, with iCDS converging towards CDS levels. However, the HY market appears mispriced. HY CDS appears to be understating credit risk, with CDS levels not confirmed by iCDS. Overall, cost of borrowing have been rising thanks to improving economic activity and the rising risk free rate

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