HALISTER1: Bayview Opportunity Master Fund IVb Trust 2016-SPL2 - Finalized Presale Report

Bayview Opportunity Master Fund IVb Trust 2016-SPL2 - Finalized Presale Report

Alert: HALISTER1
Source: DBR (Dominion Bond Rating Service)

People
Corina Gonzalez (DBRS Inc)
Lu Ye (DBRS Inc)
Quincy Tang (Dbrs Inc)

Topics
Credit Analysis Research
Credit Research
Fixed Income Research
Investment Research
Reports

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UUID: 7947283

HALISTER1: UST AUCTION PREVIEW: 5Y May Draw Highest Yield Since 2011

UST AUCTION PREVIEW: 5Y May Draw Highest Yield Since 2011

(Bloomberg) -- Current 5Y yield little changed at 2.053% ahead of $34b auction at 1pm ET; WI yield around 2.068%, above 5Y auction stops since April 2011.
  • Positives for the sale include outright yield and expectations that USTs will benefit this week from month-end index extensions and quarter-end rebalancing that favors bonds vs equities
  • Negatives include sector’s sensitivity to Fed rate increases; low foreign demand “remains a material impediment and money managers will need to step up for a strong auction,” BMO strategist Aaron Kohli says in note
  • Auction also may benefit from concession on curve since Dec. 14 FOMC meeting caused market to price in 2 rate hikes in 2017; 5s30s is near YTD lows, 3s5s10s fly highest since mid-2015
  • Past three 5Y auctions stopped within 0.2bp of WI yield at bidding deadline; Dec. 2015 sale tailed 1.2bp, produced then-record low 2.32 bid-to-cover ratio
  • Yesterday’s $26b 2Y auction was soft, tailing 0.5bp with lowest bid-to-cover since Dec. 2008
  • 6-auction averages:
    • Bid-to-cover: 2.40 (low 2.27, high 2.54)
    • Dealer award: 35.2% (low 25.1%, high 41.7%)
    • Direct award: 4.73% (low 3.7%, high 6.2%)
    • Indirect award: 60.1% (low 53.6%, high 68.7%)
  • Primary dealers’ position in 3yr-6yr sector was net long $13b in week ended Dec. 14 vs $16.9b avg net long over past year
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aaron Kohli (Bank of Montreal)

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UUID: 7947283

HALISTER1: U.S. ECO PREVIEW: Pending Home Sales Due in 5 Minutes

U.S. ECO PREVIEW: Pending Home Sales Due in 5 Minutes

(Bloomberg) -- U.S. index of pending home sales seen rising 0.5% in Nov. after increasing 0.1% in Oct. (forecast range -1.5% to +2%); leading indicator of existing home sales, tracks new contracts for single-family homes, condos, co-ops.
  • Contract signings “could rise before falling as potential home buyers rush to lock-in rates before they increase even further": Bloomberg Intelligence
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Brazil’s Temer Veto on Bill Could Favor Budget Fix: Tendencias

Brazil’s Temer Veto on Bill Could Favor Budget Fix: Tendencias

(Bloomberg) -- President Michel Temer would show a ’’strong commitment’’ to the fiscal adjustment if he vetoes the bill on states’ debts approved by lower house without any austerity requirements, Fabio Klein, analyst on public finance at Tendencias Consultoria, says in a phone interview.
  • Potential veto would be a “positive surprise”
    • Only doubt is how the government would handle it politically, as the lower house didn’t approve the requirements previously included in the bill
  • Putting the requirements back on the bill could save time, favoring the fiscal adjustment process; without them, the Finance Ministry would need to negotiate the conditions with each state separately
    • Requirements included in a federal bill also could work as guidance for indebted states, representing a starting point for their own fiscal adjustment programs
  • NOTE: Brazil’s Temer Decides to Ask for New States Debt Bill: G1
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Michel Temer (Federative Republic of Brazil)
Fabio Klein (Tendencias Consultoria Integra)

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UUID: 7947283

HALISTER: Yum! Brands Plans to Sell KFC in Turkey as Part of Global Drive

Yum! Brands Plans to Sell KFC in Turkey as Part of Global Drive

(Bloomberg) -- Co. is planning to refranchise restaurants that it owns in Turkey in line with a global growth plan announced in Oct. for KFC, Pizza Hut, Taco Bell brands, it says in e-mailed response to questions from Bloomberg.
  • “KFC Turkey will increasingly grow through its franchisees”
  • “The company plans to refranchise its KFC restaurants in Turkey with a focus on equipping and recruiting the best restaurant operators to deliver great customer experiences and drive brand growth in the region”
  • NOTE: Yum! Brands announced on Oct. 11 that it will increase its franchise restaurant ownership to at least 98% globally by fiscal year ending 2018; That’s up from 77% in Oct.
  • NOTE: Kentucky-based co. said in 2015 it plans to add 400 KFC restaurants in Turkey in 5 yrs; co. has 104 KFC restaurants in the country, according to Turkey unit’s website
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
0849716D TI (Suzer Holding AS)
YUM US (Yum! Brands Inc)

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UUID: 7947283