Valens Credit Weekly Insights for September 4, 2019

September 5, 2019

Credit and Market Mispricings
Most Compelling Credit v Equity Market Mispricings

Most Compelling Credit Rating Dislocations

Most Compelling CDS Market Mispricings

Most Compelling Bond Market Mispricings

Highlighted Top Ideas
MCK – McKesson Corporation
MTOR – Meritor, Inc.
SKT – Tanger Factory Outlet Centers, 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.