Halister News

(Bloomberg) -- With little evidence that ECB policy accommodation is driving inflationary trends in the euro area, long-end IRS could stay low for long given structural factors increasingly gaining weight, Commerzbank strategist Markus Koch writes in client note.

• Long-term investors are advised to scale into a range accrual
• To express the view of rates staying low for longer, the structure references the 10y CMS rate over 12-year term
• If the index fixings are no higher than 3% or lower than 0% for the next 12 years, coupons of 2.3% p.a. are on the cards
• Intriguingly, it suffices for the coupon condition to be met during merely 5 years to break even with current, matched- maturity swap rates

--TIMOTHY SIFERT

(Bloomberg) -- Order said mostly for A321neo, people familiar with the matter said.

• Announcement may be as early as tomorrow: people familiar
• AirAsia, Airbus decline to comment
• NOTE: Each A321neo costs $125.7 million, before discounts

--With assistance from Elffie Chew and Kyunghee Park.

(Bloomberg) -- Friday’s strong U.S. jobs report helps fuel robust Asian credit mkts overnight, even as China warns on the global macro outlook, underscoring questions about m-t risk asset fundamentals, Bloomberg strategist Simon Ballard writes.

• Political uncertainty in U.K. may continue to weigh on GBP risk assets, even as BOE seen considering rate cut this week to cushion Brexit weakness
  • Defensive investor sentiment has re-steepened GBP credit quality curve to 397bps, +60bps in past month
• Asia iTraxx and EUR equity futures trading higher this morning suggesting a firm open to EUR credit mkts
• Risk Appetite Model holding steady post U.S. payrolls report
• CDX IG closed -3.9bps at 77.94 in overnight session; iTraxx Asia Ex Japan IG currently -5.9bps at 132.70

NEWS

• Corporate News
• Formosa Chemicals 2Q Net Income NT$13.3b; Est. NT$8.96b
• Telefonica Sells 1.5% China Unicom Stake for $364 Million
• Eskom May Write Off Interest on Municipal Debt
• Advanced Petrochemical Second-Quarter Profit Falls 24%
• Pinewood Group Says Strategic Review in Progress
• Samsung Left Off China Battery List Spooks EV Maker Jianghuai
• San Miguel Plans to Seek Debt for Refinancing, Mostly in Peso

• Financial News
• Bank Indonesia Sees Weak Demand as Main Challenge to Growth
• Swedish Banks Likely to Replicate Nykredit Tier 3 Issue
• Deutsche Bank Faces Court Deadline for Thoma Succession
• Standard Chartered Starts Brokerage in Japan With 100 Staff

• Credit Rating News
• Moody’s Says NBAD, First Gulf Bank Merger Is Credit Positive
• S&PGR Affirms Mubadala Development Co. At ’AA/A-1+’; Otlk Stbl
• S&PGR Affirms International Petroleum Investment At ’AA/A-1+’

• Other News
• Canada’s Utilities Power Top Bond Returns as Yield Meets Safety
• The Week Brexit Got Real for Investors in Frozen Property Funds

ANALYST VIEWS

• Corporate bond spreads and yields are heading towards record lows, leaving some to question whether they’re overcooked, and ponder the risks to current position: creditmarketdaily.com

NEW ISSUES

• CIBC GBP250m 3/2019 Covered FRN Tap 3mL +46
• 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.

(Bloomberg) -- LafargeHolcim says agreed with Nirma, subject to approval by Competition Commission of India, divestment of its interest in Lafarge India for an enterprise value of ~$1.4b

• Lafarge India operates three cement plants and two grinding stations with a total capacity of around 11m tonnes pa
• The proceeds from divestment will be used to reduce debt further
• LafargeHolcim has a divestment target of CHF3.5b in 2016
• July 8: Lafarge India Unit Purchase Race Narrows to Local Companies: ET Link