Valens Credit Weekly Insights for October 24, 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
AXL – American Axle & Manufacturing Holdings, Inc.
CAR – Avis Budget Group, Inc.
DNR – Denbury Resources Inc.
Other Recent Analyses
Consumer Discretionary
DF – Dean Foods Company
Communication Services
MNI – The McClatchy Company
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