HALISTER1: EU CREDIT DAILY: Cash Bonds Firm; Deutsche Bank Cut, AIB Strong

EU CREDIT DAILY: Cash Bonds Firm; Deutsche Bank Cut, AIB Strong

(Bloomberg) -- Risk assets may come under some pressure post Asian market weakness as probability of a July Fed rate increase has risen to around 54% from 48% at the end of last week, Bloomberg strategist Simon Ballard writes.
  • Still, secondary cash corporate bonds should remain consistently better bid vs more liquid and volatile synthetic indexes owing to buy-and-hold attributes
  • Deutsche Bank likely in spotlight this morning as Moody’s cuts and amid reports that the SEC is looking at Deutsche Bank trades
    • M&A also in focus as markets digest details of proposed Bayer-Monsanto acquisition
    • Bayer CDS, hybrid spreads stabilizing at wider levels on implied debt financing; company still targeting IG rating for hybrid debt post transaction
    • CDS +12bps over week, but off wides; hybrid bonds off lows, ~3pts lower vs week ago
  • Risk Appetite model reflects current underpinning to corp bond space as volatility declines to ytd low
  • CDX IG closed +0.3bps at 83.52 in overnight session; iTraxx Asia Ex Japan IG currently +0.3bps at 146.32
NEWS
  • Corporate News
  • Sony’s Profit Forecast Misses Estimates on Quake Damage Costs
  • Kingfisher 1Q B&Q U.K., Brico Depot LFL Sales Beat Estimates
  • Aveva FY16 Revenue Falls 3%; Adj. Pretax Down 18%, Misses Ests.
  • UK Mail Says Hub Now Operating Well, Sees 2H Weighting
  • Severn Trent Revenue In Line, Underlying PBIT Beats Estimates
  • De La Rue FY Rev. From Cont. Ops Increases, Orders Grow
  • Monsanto Trading Below Bayer Offer Shows Regulatory Anxiety
  • Financial News
  • SEC Said to Look at Deutsche Bank Trades
  • AIB Says Profitability Strong in 1Q; NIM Progress Continues
  • Singapore Orders BSI Bank to Shut Down Amid 1MDB Probe
  • Nationwide B.S. NBS Preliminary Results Announcement
  • Credit Rating News
  • Deutsche Bank Ratings Cut by Moody’s on Struggle to Overhaul
  • Aussie Bonds Set to Lose Highest-Yielding AAA Spot to Singapore
  • Other News
  • Negative-Rate Pain Fuels Japan Demand for Derivatives to Opt Out
  • Brexit Seems Increasingly Unlikely to Corporate-Debt Investors
ANALYST VIEWS
  • This (is now) the best May month ever for (non-financial corp) issuance (€39.3b)... previous high of €38.7b set in 2009 has been passed effortlessly, with still a week’s worth of business to get through: creditmarketdaily.com
NEW ISSUES
  • 3M Company EU500m 2/2022, EU500m 15Y
  • ABN Amro Bank EU500m 6Y Green Bonds MS +52
  • Aurizon Network EU500m 10Y MS +265
  • City of Bremen EU500m 7Y MS -8
  • EFSF EU3b 10Y MS -8, EU2b 31Y MS +29
  • Sydbank EU500m 2Y FRN 3mE +55
  • Viesgo EU400m 10Y MS +233
  • 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.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Topics
Leveraged Finance

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HALISTER1: South African prosecutor to appeal almost 800 corruption charges against President dropped (Transcript)

South African prosecutor to appeal almost 800 corruption charges against President dropped (Transcript)

Alert: HALISTER1
Source: AUB (Australian Broadcasting Corporation)

People
Jacob Zuma (Republic of South Africa)
Thabo Mbeki (Republic of South Africa)

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