On 5 August 2020, Peabody Energy Company (Peabody, Company) announced its second quarter results for the period ended 30 June 2020. Overall, the results were weak (although not unexpected), 2Q20 revenues were USD627m down 45% on the prior corresponding period (pcp), reflecting the impact of a decrease in volumes in the Powder River Basin compounded by challenging U.S. industry conditions and weak commodity prices, in conjunction with lower gas prices which drives higher electricity generation from gas rather than coal.

The current environment has seen some large, stable corporates issue long dated bonds at low interest rates compared to recent history.

On 3 August 2020, the government of Victoria announced a range of new restrictions to combat the spread of COVID-19 in the state. In this report, we undertake an initial preliminary assessment of what these mean for a number of companies.

On 30 July 2020, General Motors Financial Company (GMF, Company) announced 1H20 results for the six month period ended 30 June 2020. GMF recorded softer revenues, earnings before tax (EBT) and net profit after tax (NPAT).

On 30 July 2020, Genworth Mortgage Insurance Australia Limited, the non-operating holding company for Genworth Financial Mortgage Insurance Pty Ltd, reported a statutory net loss after tax of AUD90.0m for the six months ended 30 June 2020. Much of the headline result was impacted by provisions for expected future claims in response to COVID-19 that were announced in the first quarter, with the company reporting a net profit after tax of AUD35.6m in the second quarter.

On 27 July 2020, Emeco Holdings Limited (Emeco) released its full year results for the period ended 30 June 2020 (FY20). Overall, the results were solid, owing in part to the contribution of recent acquisitions. Emeco reported revenue and EBITDA of AUD540m and AUD246m, respectively, both were up about 15% on the prior year.

On 20 July 2020, Privium Group (Privium, Company) provided a trading update for the 11 months ended 31 May 2020 and an update on progress of the refinancing of its notes. While full year results are still to be finalised, the Company reported a 5% increase in sales to 1,215 (FY19 1,154), with revenue to May of AUD235.3m and EBITDA of AUD12.0m.

In our latest Credit Outlook looking at what's in store for the next six months, we consider the various dynamics at stake that will influence the financial markets and the economy for the rest of 2020. Notwithstanding better than feared data more recently, significant uncertainty around the recovery in employment and demand is likely to weigh on the private sector (businesses and households) for some time.

Credit spreads have tightened materially since the dislocation experienced in March this year, however prices have not fully recovered, providing an investment opportunity in the USD space.

The newest additions to FIIG’s USD DirectBond list are two investment grade (IG) rated corporate hybrids issued by BP Capital. These newly issued securities offer strong relative value.