Systematic Credit and Equity G-255 Trade Indicators for November 13, 2025
Indicators at "Fair Value" for first time since late May & why are Meta, Blue Owl, and BlackRock really engaged in the Hyperion?
Good morning. First things first.
The Stochastic Trading Model overnight indicators showed:
Attractive Long Credit Indicators: 90 (+13 from Wednesday, –17% below the 200-day moving average of all long indicators)
â Attractive Long Credit Market Cap accounts for 34% of all undervalued Systematic Credit capital.
Attractive Short Credit Indicators: 492 (–58 from Wednesday, –3% below the 200-day moving average of all model short trade indicators)
â Attractive Short Credit Market Cap accounts for 34% of all overvalued Systematic Credit capital.
We are at fair value for G-255 credit and equities — for the first time since late May — according to the stochastic systematic trading model.
If 33 years of history is any guide, these fair value conditions won't last long.
"Meta's Hyperion data center needs $29 billion. Traditional financing would destroy their credit rating."
— Not our statement; sourced from another credit post.
"Meta invested $500M equity and controls $29B infrastructure. That's 58x leverage without balance sheet impact. Instead of volatile capex, Meta pays predictable rent. CFO gets stable opex. Wall Street gets predictable earnings."
Actually… Quantitatively Speaking
The $29 billion would not have impacted Meta's credit rating or capital access.
Meta provided the JV with a guarantee that the property will maintain a minimum value for the first 16 years â on balance sheet.
Meta will use the facilities via operating lease agreements (4-year initial term, with extension options) â operating lease obligations also on balance sheet.
Capex does not impact reported earnings — only non-investment expenses are expensed directly.
Otherwise, we agree 100% with the statements above.
Meta 3Q results
So why are Meta, Blue Owl, and BlackRock really engaged in the Hyperion transaction — and likely more to come? Please refer to our Meta earnings report from October 31 (updated today in the earnings digest alongside the Cisco report). The core reason for this transaction (and others) is so attractive: Meta's 3Q operating metrics — for a company with $250 billion in annual revenue — are astonishing at the subscriber growth level.
Bottom line:
Meta has the most loyal subscriber base in modern global tech communications.
The migration into AI isn't "a bet" — it's an investment in its current user base + every human under 12 years old.
There is zero question about Meta's management expertise in personal and business communications at scale. AI integration is designed to sustain subscriber and revenue-per-subscriber growth at the pace shown in 3Q.
Forget balance sheet impact — there is none. (See the report.)
Systematic Trading Indicators for Meta equity and corporate bonds
From a purely quantitative Systematic Trading perspective:
META US Equity has the highest G-255 long Systematic Trading indicator score: 119.9 — of all 244 names in the equity/trading research universe.
META is up only 5% YoY, while returning > $40 billion/year to shareholders.
New META bonds still have –4 to –15 bps of tightening potential to reach the model's projected avoid-trade levels.
G-255 equities are at fair value for the first time since late May. With corporate bond ETF flows declining week-over-week, there is no change in the trading model's daily trade allocation.
Top traded IG G – 255 issuer: Verizon (Baa1/BBB+ attractive long credit/equity) (-1 to -2bp) on Wednesday
Traded HY G – 255 issuer: Pemex ( B1/BBB attractive long credit) (+4 to +6bp) Wednesday
Key Systematic Trading Model Economic Indicators Reported Wednesday:
Total carloads for the week ending November 8 were 224,651 carloads, + 0.1% compared with the
same week in 2024, while U.S. weekly intermodal volume was 268,842 containers and trailers, down 8.7%.
compared to 2024.
Total U.S. weekly rail traffic was 493,493 carloads and intermodal units, -4.9% compared with the
same week last year.
Credit Market Conditions
Source: Bloomberg Capital Markets
UST 10-Year Rates: -16.9bp YoY and -43.2bp YTD.
Bloomberg 10Y credit spreads are derived by taking the Moody's index yield and subtracting the UST 10Y YTM.
Charles Schwab was the lone G-255 issuer to come to the USD market on Wednesday bringing the November total to 14 issuers, 45 bonds and $55.6 billion of USD supply. As this was the first SCHW deal in two years and the Schwab balance sheet now has net cash, the deal (according to the Systematic trading model) was priced well outside of avoid trading levels.
Thus Far 13 of the 43 bonds offered in November have reached their systematic model trading avoid point.
For the month of October 22 ($29.75 billion) of the 71 bonds ($101.105 billion) have reached their model avoid trading level.
For the month of September, 62 ($55.6 billion) of the 162 G-255 bonds sold have reached their avoid trading level.
Corp Bond ETF flows fell by -$1.8 billion to $807 mm in the week ending November 11, 2025
Dedicated Investment Grade corporate bond ETFs had net outflow of -$203mm
Dedicated High Yield corporate ETFs have net outflow of -$399mm
Attractive Long Credit Indicators: 90, (+13 from Wednesday and -17% below the 200-day moving average of all long indicators. )
Attractive Long Credit Market Cap accounts for: 34% of all undervalued Systematic Credit capital.
Attractive Short Credit Indicators 492, (-58 from Wednesday and -3% below the 200-day moving average of all model short trade indicators).
Attractive Short Credit Market Cap accounts for: 34% of all overvalued Systematic Credit capital.
G-255 Equity Trade Indicators and US Equity Correlation to Overall US Credit Spreads
US equities and credit markets failed to correlate directionally for an 8th trading day in 20.
US equities are roughly 1% higher WoW; US credit markets are wider in the week ended November 12.
US equities are +3.15% higher over the past month, US credit spreads are only modestly higher.
2025 is on track for the second-weakest year in 32 for USD credit-equity correlated movement—historic 80% vs. ~73% this year.
Systematic Equity Trading Indicators November 12
• Attractive Long G-255 Equity Trade Indicators: 72, (-3 from Wednesday and +20% above the 200-day moving
average of all model long trade indicators).
• Attractive Short Equity Trade Indicators 5, (unchanged from Wednesday and -36% below the 200-day moving
average of all model short trade indicators).
For G-255 issuers, equity prices of the world's most indebted companies rose +.05% Wednesday and +.9% over the past week, while the S&P 500 rose +0.06% Tuesday and +.8% over the past week.
G-255 Equity and Credit Indicators – How we use them
• G-255 issuers are the world's 255 largest issuers of corporate debt, as tracked and analyzed in
proprietary systematic credit trading model featured in the "Systematic Trading" Report on Substack and
universe represents the most heavily indebted and actively traded global companies.
• The G-255 refers to a standardized reporting framework used by USD bond issuers to disclose quarterly
financial results. It's not a regulatory mandate but a market convention tracked by systematic credit analysts and
traders. The exact list of 255 issuers isn't publicly detailed but aligns with globally indebted giants.
• Indicator calibration: Credit trading models use earnings data to recalibrate valuation indicators, such as spread to-curve, earnings momentum, and debt ratios.
• Bond-level granularity: Many G-255 issuers have multiple bonds outstanding. Systematic models assess
relative value across the capital structure, flagging overvalued or undervalued bonds.
• Equity-credit linkage: For dual-listed issuers, equity signals (e.g., earnings beats/misses) influence credit
spreads. G-255 disclosures synchronize these inputs
Long Opportunities:
Focus on de-leveraging issuers, including Single A and BBB-rated TMT, BBB-rated Energy,
Euro Yankee Banks, and Floating Rate Notes.
Valuation Insight: The stochastic credit trading model identifies 238 undervalued bonds ($395.9 billion market
value), with 90 long trade indicators across the 6,000-bond USD universe.
Short Opportunities
1,445 bonds ($2.26 trillion) are overvalued per the stochastic credit trading model, with 492 short trade indicators.
U.S. Big 6 Banks (all ratings):No longer a short indicator as of October 22. Bonds +5 to +18 bp since 9/22.
Single A and BB Energy: No longer a short indicator as of October 27. Bonds +5 to +17.5 bp since 9/27.
Single A Healthcare: No longer a short indicator as of October 22. Bonds +4 to +15 bp since 9/22.
Single A Industrials: No longer a short indicator as of October 22. Bonds +5 to +15 bp since 9/22.
Autos: 133 bonds ($150.3 billion) are overvalued, with 88 short trade indicators
Systematic Portfolio Daily Trading Model Indicators
Long Indicators: Target deleveraging new issues with attractive valuations, focusing on 5-year maturities.
Short Indicators: Target releveraging issuers trading at the deepest discount from their model avoid point, avoiding 7-year maturities due to low attractiveness.
Replace Longs: Swap long positions that have reached their avoid trading level.
Portfolio Trading Hurdle: Maintain a 1:1 long-to-short ratio once the 67.5% long position threshold is reached.
Current Status: Add new supply trades where the issuer is deleveraging; add new issue bonds where spreads widened by +2 basis points.
Current Status of Trading Indicators: Last week, one short trade and two long trades reached their avoid trading level. The trading model added three long indicators.
Monitor Trade Position Composition:
Track the percentage of long positions relative to the total portfolio.
If replacing long positions that have reached their avoid trading level pushes the portfolio above the 65% long hurdle, initiate short positions in releveraging issuers (avoiding 7-year maturities) at a 1:1 ratio for additional long positions.
Review: Reassess portfolio balance after today's fund flow data to ensure alignment with the systematic strategy.
Look for individual bond indicators to change overnight: Historic trading levels are leading to overnight adjustments to long, short and avoid indicator levels.
Closed Positions: John Deere Cr. (A2/A) DE 5.45 01/16/35 short trading indicator reached its avoid trading level Wednesday 11/3. BP (A2/A-) BPLN 3.06 06/17/41 short trading indicator reached its avoid trading level Tuesday 11/4. Citicorp (A3/BBB+) C Float 09/11/31 long trading indicator reached its avoid trading level Wednesday 11/5. General Motors Financial (Baa2/BBB) GM 2.7 06/10/31 short trading indicator reached its avoid trading level Friday 11/7.
Enter New Longs: Lloyds Bank (A3/A-) LLOYDS Float 11/04/31 was added by the trading model as another long trade indicator on 11/4. The trading model added Meta (AA3/ AA-) META 4 7/8 11/15/35 and META 5 1/2 11/15/45 new supply long trade indicators on Friday.
Enter New Short Trades: The trading model added Cigna (Baa1/A-) CI 2.4 03/15/30 and HCA (Baa2/BBB-) HCA 3 5/8 03/15/32 as short trade indicators 11/3.
Current Sample Systematic Basket bond trades based on trading strategy
New Trade Indicators Wednesday: None
Wednesday's Basket Trade Long/Short Ratio: 67%
Systematic Long/Short Basket Trade Performance Report (January 4, 2025 – November 12, 2025)
Performance Summary: Total Trades: 184 (1% of total trade indicators).
Long Indicators: 125/144 reached avoid-trading levels, tightening by -9.23 bp.
Short Indicators: 33/40 reached avoid-trading levels, widening by +5.70 bp.
Remaining Longs: 19 widened by +3.12 bp.
Remaining Shorts: 7 tightened by -10.71 bp.
Average Spread Movement: ± 6.56 bp in the recommended direction.
Success Rate: 86% of indicators reached avoid-trading levels, which is slightly below normal.
Average trade holding period: 22.4 days (above average)
Disclaimer - This report is not intended as, and does not constitute an offer, or a solicitation to buy or sell any securities or financial instruments. All data, levels, opinions, and representations herein are provided for informational purposes only and should not be relied upon for making investment decisions. Past performance is not indicative of future results. The authors of this report assume no liability for losses or damages arising from the use of this information. Investors should consult with a qualified financial advisor before making any investment decisions. The information in this report is based on sources believed to be reliable, but no guarantee is made as to its accuracy, completeness, or timeliness.