Research

Valens Credit Weekly Insights for October 11, 2019

Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
AVPCYHDISHHTZUIS

Most Compelling Credit Rating Dislocations
ADNTAMDBHCBZHCSTMDOOREXPEKBHLENMTW

Most Compelling CDS Market Mispricings
ANBZHCHKCSTMDISHLBRADRIGWYNDX

Most Compelling Bond Market Mispricings
ADNTCARCSTMDNRIMKT.AMDRMGMMTWRADUIS

Highlighted Top Ideas
AXL– American Axle & Manufacturing Holdings, Inc.
UNT – Unit Corporation
RFP – Resolute Forest Products 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.