Research

Valens Credit Weekly Insights for September 30, 2020

September 30, 2020

Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings
AERCYHDISHEXPELB
Most Compelling Credit Rating Dislocations
BHCBZHCSTMCYHDISHDOOREXPELEEMTWRAD
Most Compelling CDS Market Mispricings
ANBZHDISHEXPEIRMMGMMTORTDGWYNDX
Most Compelling Bond Market Mispricings
DOORGMGPSHCAIRMLENMGMTDGTWTRUHS

Highlighted Top Ideas
CVI – CVR Energy, Inc.
GT – The Goodyear Tire & Rubber Company
MGM – MGM Resorts International

Aggregate Credit Market and Credit Fundamental Review
The IG market is currently fairly valued. HY and XO markets have seen CDS move wider than iCDS again recently even after markets have normalized. Overall, costs of borrowing rose dramatically in due to coronavirus concerns, before stabilizing again recently thanks to the Fed’s actions to calm markets. While the overblown reaction in credit markets has since moderated, HY and XO markets remain mispriced.