Halister News

(Bloomberg) -- Credit market sentiment appears to have swung 180 degrees, from fearing the prospect of a second- or third-quarter FOMC rate hike to embracing it. After risk assets weakened in early May, we are firmly back in risk-on mode, at least for now, Bloomberg strategist Simon Ballard writes.

• Risk assets are buoyed by the hawkish idea of strengthening macroeconomic fundamentals; Asia credit firm overnight
  • However, the market’s susceptibility to near-term event risk is still elevated; U.S. rates, U.K. EU membership referendum may carry extreme market volatility risk in coming weeks
• Greece debt agreement in principle is a clear fillip for the EUR credit mkt; but longer-term debt sustainability may still be in doubt, creating a “buy the rumor, sell the fact” moment for some investors
• Risk Appetite model shows spreads grinding tighter but with increased volatility

• CDX IG closed -0.7bps at 77.03 in overnight session; iTraxx Asia Ex Japan IG currently -2.1bps at 141.19

NEWS

• Corporate News
• Total Reports Flow Loss at Bacton Seal U.K. Gas Terminal Site
• Tate & Lyle FY Revenue, Adjusted EPS Ahead of Estimates
• Daily Mail 1H Profit Falls; Results Hit by Weak Print Ads Market
• Uniqa 1Q Profit Halves on Investment Income; Outlook Confirmed
• Darty 4Q Like-for-Like Rev. Rises 12%

• Financial News
• Standard Bank 4-Month Expense Growth Exceeds Income Growth
• Alliance Financial 4Q Net Rises to 129.8m Rgt vs 93.3m Rgt Y/y
• Senior Bondholders Added to Bail-In Buffer in Danish Experiment
• Suncorp Falls Most in Three Months After Analysts Downgrade

• Credit Rating News
• Australia Banks Asset Quality to Come Under Pressure: Moody’s
• S&PGR Rates Nykredit Realkredit’s Proposed Tier 3 Notes ’BBB+’
• Macau Economy Seen at Risk as Moody’s Downgrades Gaming Hub

• Other News
• Greece’s Journey to Redemption Remains a Long One After Aid Deal
• Bank Indonesia Prepares Rules to Allow Structured Products

ANALYST VIEWS

• Rising markets usually lift confidence, encourage more risk- taking and can boost activity. That’s not the case right now, though as we don’t see enough fundamental economic improvements anywhere to justify sharply rising markets: creditmarketdaily.com

NEW ISSUES

• Affordable Housing Finance GBP161m 2.893% Tap UKT +35
• Bright Food EU400m 3Y MS +185
• Castilla Y Leon EU400m 5Y Interp. SPGB +28
• China Development Bank EU1b 5Y MS +60
• Credit Mutuel Arkea EU500m 10Y Tier 2 MS +270
• Credit Agricole EU1b 12/2022 MS +63
• Danske Bank EU1b 7Y MS +62
• Erste Group Bank EU500m PNC5.5 With 8.875% Coupon
• HeidelbergCement EU750m 8Y MS +205
• Immob. Grande Distribuzione EU300m 5Y MS +250
• JCDecaux EU750m 7Y MS +80
• State of Berlin EU250m 0.75% 9/2023 Tap MS -9
• Hoist Kredit EU250m 12/2019 3.125%
• 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) -- Revenue gain estimated at 164.5b pesos to 351b pesos in 1st yr of implementation, Finance Dept. says in e-mailed statement.

• NOTE: Philippines Outgoing Minister to Submit $3 Billion Tax Plan Link
• Largest increase could be from administrative reforms including repeal of bank secrecy, making tax evasion predicate crime to money laundering

--GEAROID REIDY

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

• To get this story sent to your inbox real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery

DOWNGRADES

• Capitol Hill Hotels
  • Long-term loan facilities cut to D from B- at Crisil
  • Cites delays in servicing term debt

• Duflon Industries
  • LT loan facilities cut to B+ from BB at Crisil
  • Cites weaker-than-expected operating performance, large working capital cycle

UPGRADES

• Musaddilal Projects
  • LT loan facilities raised to BBB- from BB+ at Crisil
  • Cites significant improvement in financial-risk profile, liquidity

(Bloomberg) -- Shares drop as much as 4.3%, most since Feb. 11 as Credit Suisse and UBS cut ratings.

• Co. faces “near-term headwinds” of lower bond yields,lack of premium rate increases which may impact share price, Credit Suisse analysts led by Andrew Adams -- who cut the co. to neutral from outperform -- said in note to investors
  • Margin improvement diminishing as rev. growth slows; Special div. less likely amid capital pressures
• UBS analysts led by James Coghill -- who cut Suncorp to neutral vs buy -- say co. closer to fair value after gaining ~15% since its interim profit in Feb.
• NOTE: SUN up almost twice the increase for S&P/ASX200 index
• NOTE: Suncorp yday forecast low single digit growth in GWP

(Bloomberg) -- Governor Muhammad Ibrahim comments on overseas probes into Malaysian state investment company after Swiss authorities said BSI SA had acted in serious breach of money-laundering rules in connection with 1MDB.

• There are other rules administered by other jurisdictions and Bank Negara Malaysia will continue to give its cooperation on this matter: Muhammad
• BNM has completed its investigation into 1MDB: Muhammad
• NOTE: Malaysia’s 1MDB Web And The 143-Year-Old Swiss Bank It Ensnared Link

(Bloomberg) -- Asian currencies strengthen broadly against the dollar, led by the yen & the ringgit, as regional equities and oil prices advance amid growing confidence a Fed rate rise won’t derail the global economy.

• Dollar index falls, set for two straight days of losses
• There’s some adjustment from recent dollar strength amid lack of significant incentives to further buy up USD, says Kozo Hasegawa, Bangkok-based FX trader at Sumitomo Mitsui Banking Corp.
  • Gains in crude oil prices and stocks are supportive for emerging market currencies; EM currency moves continue to be driven by factors in the U.S.: Hasegawa
• Brent crude oil price rises above 50$/bbl for first time since Nov., MSCI Asia Pacific Index gains 0.7%
• Yen advances as Japan Vice Finance Minister Asakawa’s interview with the FT suggests that intervention is less likely
  • “However, the key quote is from 10 days ago,” Joseph Capurso, senior currency strategist at CBA in Sydney says, adding USD/JPY may have over-reacted
  • Some investors may also be unwinding intra-day long position amid thin liquidity conditions, says Kyosuke Suzuki, Tokyo-based FX and money market sales at Societe Generale
• Yuan gains after PBOC raises daily reference rate by 0.21% to 6.5552/USD, a day after setting the fixing at weakest since 2011
  • Market consensus has shifted; doesn’t believe yuan is set for much bigger devaluation, as in evidence yday when weakest CNY fixing since 2011 had little impact, says W. Brad Bechtel, managing director at Jefferies
  • Yuan transactions fell by 1.82% m/m in Swift RMB Internationalization Tracker; it ranks as sixth-most widely used currency for global transactions vs fifth a year earlier
• Southeast Asian currencies gain for a second day, with ringgit leading advance on higher oil prices
  • Thai baht is moving in line with other currencies, BOT Governor Veerathai says today
  • Economy has good buffers and can weather global volatility;

Thailand has less foreign debt and higher liquidity than many other countries, he says ** Philippines Presumptive President Duterte says some of his choices turn down offer for Cabinet posts & are asking for higher pay, allowance ** Philippine banks face additional liquidity requirement under Basel 3 framework: BusinessWorld ** Singapore set to release April industrial output at 1 pm local, with data likely to show that it fell 0.2% y/y vs -0.5% prior, according to Bloomberg survey

• Dollar strength will resume in run-up to June-July FOMC meeting as risk appetite fueled by rebound in oil prices isn’t sustainable, Scotiabank’s strategist Qi Gao writes in note today
  • Regional currencies are expected to remain vulnerable to resurfacing concerns over Fed’s tightening and potential external uncertainty in June including Brexit referendum
• Australian dollar falls after 1Q business investment dips 5.2% q/q vs est. 3.5% drop
  • Chinese yuan’s reaction to any Fed hike in June may affect whether RBA chooses to hold rates in coming months, says market strategist Honglin Jiang of Credit Suisse
• New Zealand dollar declines after Fonterra’s 2016-17 forecast a lower-than-expected milk payout
  • New Zealand raises surplus forecasts as tax revenues improve; leaves door for tax cut at next year’s election