1. FIXED INCOME
RESEARCH
René L. Robert
Head of Group
Michael F. Brown
Head of Research
Chris M. Stehli
Market Analyst
Mark T. McKenna
Market Analyst
Sean W. Quinlan
Market Analyst
David L. Chau
Market Analyst
Michael C. Lopus
Quantitative Analyst
Minh T. Vo
Quantitative Analyst
BOSTON
One Federal Street
Floor 25
Boston, MA 02110
TEL: 617.261.9700
FAX: 617.261.9696
NEW YORK
244 Madison Avenue
Suite 233
New York, NY 10016
TEL: 212.227.8870
FAX: 212.208.3059
LONDON
155 Minories, Suite 140
London EC3N 1AD UK
TEL: +44 (0) 207.096.0983
FAX: +44 (0) 871.251.0863
HIGH YIELD BOND RESEARCH June 10, 2016
Bond Markets
Investment-grade corporate bonds rallied, in line with Treasuries, as market participants favored quality
over risk. Overall, investors avoided riskier positions due to abounding uncertainty, with the June 23 U.K.
referendum on EU membership and upcoming central bank decisions. Also factoring into Friday's market
picture, crude oil futures continued to fall, sinking below $50 a barrel. In equity markets, shares dropped
- the S&P 500 was down 0.92% on the day, following losses in Europe and Asia.
High-grade corporates, along with Treasury notes, continued to rise today; accordingly, the yield on
the 10-year U.S. Treasury note fell 4 basis points from 1.68% to 1.64%. Banks are falling as these yields
continue to shrink, wiping out most of the market’s gains from this week. Goldman Sachs took the biggest
losses. Bond yields are retreating as the upcoming 'Brexit' vote approaches. "The U.S. indexes are trailing
what is happening overseas this morning. We've seen a decline in crude prices and strength in U.S.
Treasuries and that combination adds ups to ared day," said Paul Springmeyer, investment management
director at U.S. Bank in Minneapolis. "There still remains quite a bit of uncertainty out there ... and returns
will be fairly muted until those question marks are resolved" Springmeyer said. The yield on the 10-year
German bund fell to another record low of 0.021% today. Government debt also fell to record lows in the
U.K. and Japan, where 10-year government bonds are already trading in negative territory, at -0.153%. In
other news, U.S. crude oil futures are trading at $48.88 (as of 5:00 PM ET), which is a $-1.49 and -2.95%
change from yesterday’s close. Oil reached its year-high price yesterday, clocking in at $52.86 per barrel.
Gasoline, heating oil and natural gas prices also sank. The S&P was down 0.92%, while the U.S. dollar
strengthened compared to its rivals; however, this could change in the near future, as investors are skeptical
about next week’s Federal Reserve meeting which ends on Wednesday. ADI (Advantage Data Inc.) data
showed a net daily yield increment in investment-grade versus high-yield indexes. High-grade corporate
bonds decisively outpaced their high-yield counterparts in net prices. Among investment-grade bonds
showing concurrence of top price gains, Dell Inc. 7.1% 4/15/2028 made some analysts' 'Conviction Buy' lists.
(See chart for Ford Motor Co. bonds, next page.) Sean Quinlan squinlan@advantagedata.com
Key Gainers and Losers Volume Leaders
+ Weatherford Intl LTD 5.125% 9/15/2020 + 1.7%
Dell Computer Corp. 7.1% 4/15/2028 + 2.1%
- AGCO Corp. 5.875% 12/1/2021 -4.1%
Weatherford Intl LTD 9.625% 3/1/2019
Centene Corp. 4.75% 5/15/2022
Weatherford Intl LTD 4.5% 4/15/2022
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2. Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.01% 0.97% 2.27% 8.47% 9.74% 1.65%
Mining 0.29% 3.45% 9.40% 34.97% 28.10% -6.64%
Construction 0.05% 0.45% 1.61% 6.94% 4.52% 2.20%
Manufacturing 0.06% 0.87% 2.72% 7.53% 7.72% 2.65%
Transportion, Communication, Electric/Gas -0.03% 0.96% 2.24% 6.62% 7.97% 2.60%
Wholesale 0.12% 0.73% 0.34% 7.90% 7.95% 1.29%
Retail 0.00% 0.67% 0.60% 4.45% 6.76% 3.39%
Finance, Insurance, Real-Estate 0.02% 0.72% 1.30% 4.35% 4.67% 4.18%
Services 0.01% 0.70% 1.39% 4.73% 6.54% 5.29%
Public Administration 0.14% 0.44% 0.49% 3.38% 1.75% 6.98%
Energy 0.29% 3.59% 8.86% 32.17% 22.35% -5.86%
Total returns (non-annualized) by rating, market weighted.
New Issues Forward Calendar
1. Weatherford International LTD (USD) 7.75% 6/15/2021
(06/09/2016): 750MM Senior Unsecured Notes, Price at Issuance
100, Yielding 7.75%.
2. Scf Capital (USD) 3.375% 6/16/2023 144A (06/09/2016):
750MM Senior Unsecured Notes, Price at Issuance 100, Yielding
3.38%.
3. JC Penney Co. Inc. (USD) 5.875% 7/1/2023 144A (06/09/2016):
500MM Secured Notes, Price at Issuance 100, Yielding 5.88%.
4. West Corp. (USD) 4.75% 7/15/2021 144A (06/09/2016): 400MM
Secured Notes, Price at Issuance 100, Yielding 4.75%.
5. Gogo Intermediate Holdings LLC (USD) 12.5% 7/1/2022 144A
(06/09/2016): 525MM Secured Notes, Price at Issuance 100,
Yielding 12.5%.
6. Weatherford International LTD (USD) 8.25% 6/15/2023
(06/10/2016): 750MM Senior Unsecured Notes, Price at Issuance
100, Yielding 8.25%.
1. AMSURG CORP.: $3.7 billion in new financing. Expected 2nd
Quarter 2016.
2. DYNEGY INC.: $1.85 billion secured debt facility. Expected 2nd
Quarter 2016.
3. SUNOPTA FOODS INC.: $300 million senior secured notes due
2023. Expected 2nd Quarter 2016.
4. MTS SYSTEMS CORP.: $250 million senior notes. Expected 2nd
Quarter 2016.
5. SOLARWINDS: $580 million senior secured notes. Expected 2nd
Quarter 2016.
6. STERIGENICS-NORDION HLDGS LLC: $120 million senior secured
notes. Expected 2nd Quarter 2016.

3. Additional Commentary
NEW ISSUANCE WATCH: Participants welcomed $6.75B in offerings on 6/8/16, including those of Dell
Inc. ($3.25B), DISH Network Corp. ($2B), and Cheniere Energy Partners LP ($1.5B). The most recent data
showed money flowed into high-yield ETFs/mutual funds for the week ended 6/8/16, with a net influx
of $748.153MM, rendering 92 of the 160 previous weeks with net inflows.
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Parker Drilling Co. (5Y Sen USD MR14)
HealthSouth Corp. (5Y Sen USD XR14)
Chesapeake Energy Corp. (5Y Sen USD XR14)
MBIA Insurance Corp. (5Y Sen USD CR14)
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
Life Time Fitness Inc.
Cushman & Wakefield
Eze Software Group
OVERALL CREDIT MARKET:
A net positive skew on improvement in the US economy remains intact, although a view builds that a lag
in the rate of global economic recovery is in effect. Positive effects remained in force:
TED spread held below 50 bp (basis points), in particular, <41 bp as of 6/10/16
Fed maintains a measured rate-increase stance, tightening by 0.25%-0.50% in Dec. '15
Net positive capital flows into high-yield ETFs & mutual funds (inflows for 92 of 160 previous
weeks)
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