Halister News

--AARON KIRCHFELD

(Bloomberg) -- Italy to sell bonds for up to EU8.5b across 0.05% 2019, 0.65% 2023 and 1.65% 2032 at 11am CET; Ireland to sell EU1b 1% 2026 bonds at 11:30 am CET.

• Citigroup (Aman Bansal)
  • Best value in switching from rich May 2020 BTP into new Oct. 2019; May 2020 is the richest BTP on the 2-10yr curve vs fitted curve and also looks historically rich vs 3yr sector
  • Spread should perform on further Italian underperformance, which has been marked by the steepening of sub-10yr curve so far
  • Remain constructive on the Irish sovereign with relatively high growth rates (5.2% expected by Citi in 2016) and a notable fall in the deficit (from -10.3% in 2011 to just -1.8% last year)
  • Better relative value on the Irish domestic curve given a degree of concession rather than on a cross-market basis

• Commerzbank (David Schnautz)
  • Auction should be an opportunity to implement strategic overweights in IRISHs vs OATs and OLOs in the 10y area, eyeing parity in ASW
  • Ireland’s National Treasury Management Agency unlikely to tap the bond at final 2016 auction on Nov. 3
  • Any supply-induced spread re-widening in Italy vs Spain would be an even better entry opportunity for tactical overweights in BTPs vs SPGBs, especially in the 10y area

(Bloomberg) -- Aside from the pound, the U.S. election and commodity price gyrations, 3Q earnings may hold as much of the market’s attention in coming weeks. Initial releases this week, including Alcoa and Ericsson, may have been warning shots in terms of downside risk to overly exuberant expectations, Bloomberg strategist Simon Ballard writes.

• Investors may remain cautious, favoring defensive risk positioning, unless and until there’s clarity that the early weak numbers were outliers in a generally constructive macro environment
• GBP remains under pressure from hard/soft Brexit polemic; investors may look to reset currency shorts on any rally, with weak sentiment pervading the GBP risk-asset spectrum
• Asia credit markets weaker overnight, suggest possible wider bias to EUR credit risk at the open this morning; spotlight likely still on Deutsche Bank, Wells Fargo
• Risk Appetite Model shows relative stability over past two days
• Bloomberg Barclays Eur-Agg Corporate index closed flat again yday at 113bps; Bloomberg Barclays Eur HY index closed at 400bps (-1bps)
• CDX IG closed +0.8bps at 75.71 in overnight session; iTraxx Asia Ex Japan IG currently +0.6bps at 117.13 and iTraxx Australia quoted +1.3bps at 104.44

NEWS

• Corporate News
• Casino 3Q Sales Beat Ests., Confirms 2016 French Targets
• Unilever 3Q Underlying Sales Growth Beats Estimates
• Sky Gets Brexit Boost as Quarterly Sales Rise on Weaker Pound
• TSMC Profit Rises to Record on Orders for Apple Processors
• Fast Retailing Forecasts Full-Year Operating Profit to Rise 37%
• Hochschild Mining 3Q Production Up, Production Target Raised
• WH Smith FY Headline Pretax In Line, Announces GBP50m Buyback
• Booker 1H Revenue, Pretax In Line; On Course for FY Expectations
• Mondi Operating Profit Ex-Items for 3Q Rises 3% Y/Y to EUR227m
• Cathay Pacific Falls to 7-Year Low After Profit Outlook Scrapped
• Southern’s $6.9 Billion Clean Coal Plant Produces First Power
• Toyota-Suzuki Alliance Marks Car Industry Fight for Survival

• Financial News
• Wells Fargo CEO Stumpf Quits in Fallout From Fake Accounts
• Hargreaves Lansdown Says ‘Confident’ in Execution of Strategy
• Ping An Bank Says Board Changes Planned After Shake-Up Reported
• China Banks Face Growing Pressure on Bad Loans: CBRC Official

• Credit Rating News
• S&PGR Affirms Stanley Black & Decker ’A’ Rtg; Outlook Stable
• S&PGR Rates Enersis Americas SA’s New Sr Unsecured Notes ’BBB’
• S&PGRBulletin: Samsung Rtgs Unffctd By Note 7 Discontinuation

• Other News
• Platinum In Bear Market as Rates, Electric Cars Dent Outlook
• Pound’s Plunge Squeezes U.K. Companies as Brexit Hedges Expire

ANALYST VIEWS

• The better tone for credit, admittedly amid limited turnover and volumes, was also apparent in the high-yield sector where spreads also were better bid for choice. Overall, for the moment, the corporate bond market is coming out top of the risk asset pile: creditmarketdaily.com

NEW ISSUES

• State of Brandenburg EU700m 10Y MS -18
• Close Brothers Finance GBP250m 10Y UKT +175
• CNP Assurances EU1b 6Y Tier 3 Notes MS +190
• Westpac Banking Corp EU1.5b 1/2022, 4/2027 Notes
• Promsvyazbank Expected $250m 3Y Bonds 5.25%
• RCS & RDS EU350m 7NC3 Senior Secured Notes 5%
• Tereos EU200m 4.125% 2023 Tap 102.75
• European IG credit pipeline here and HY credit pipeline here
• Issuers exposed to S-T rollover and interest-rate reset risk here

• NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

--BENJAMIN HARVEY

(Bloomberg) -- Aluminum producer is considering 3 types of debt refinancing, including selling a eurobond as rates are attractive, Deputy CEO Oleg Mukhamedshin says in phone interview from London.

• Rusal may use 70b-ruble multi-currency exchange-traded bonds program it registered with Moscow Exchange
• Co. also in talks with Chinese regulators over issuing panda bonds
• NOTE: Panda bonds are yuan-denominated securities sold by a non-Chinese organization and traded in China’s domestic mkt
• Co. is also in talks with banks to lower borrowing costs under existing debt
• Rusal is waiting for lenders’ approval to pay interim div. approved by board last month; expects approval in Oct.
• NOTE: Moody’s gave Rusal Ba3 rating on Oct. 7 with stable outlook
• NOTE: In June: Rusal Gets AA+ Credit Rating With China Chengxin Securities Rating

(Bloomberg) -- Swiss financial-services industry becoming more attentive to money laundering after risks increased in past 5 yrs, FINMA chief Mark Branson is cited as saying in interview with Tribune de Geneve.

• Origin of funds from emerging-markets clients is harder to establish: TdG
• NOTE: Swiss Banks Chasing Asia Cash Stung by Dirty-Money Crackdown