HALISTER1: AUCTION PREVIEW: Covering Demand, Smaller Size to Support SPGBs

AUCTION PREVIEW: Covering Demand, Smaller Size to Support SPGBs

(Bloomberg) -- Spain to sell 5.9% 07/2026, 5.75% 07/2032, 4.7% 07/2041 for EU2b-3b at 10:30am CET. Analysts optimistic on the sale given expectations for short-covering demand, reduced sizes.
  • Mizuho (Antoine Bouvet)
    • Auction bonds surprised the markets, sizes reduced due to longer average duration
    • 10Y has richened since the auction announcement; because of this outperformance, bond should see good demand
    • Neutral on both longer issues, 16Y trades expensive on the fitted curve, without benefiting from low cash price which explains neighboring issues
    • 25Y bonds trades expensive in repo, have richened slightly into auction, should benefit from short- covering demand
  • Commerzbank (David Schnautz)
    • Risk of ultra-long peripheral supply indigestion remote, given low target range of EU2b-3b, Tesoro’s selection of bonds
    • All three auction bonds are off-the-runs, should benefit from special demand; SPGB 07/2026 tap is the first-ever since the start of QE, expect a smooth sale
  • SocGen (Marc-Henri Thoumin)
    • 10Y offers good pickup vs shorter maturities; 7s10s SPGB spread looks steep compared to BTPs, expect some convergence after the auction
    • 07/2032 looks rich relative to the curve, expect limited interest for this bond
    • 10/2044 has seen modest concession ahead of this tap, 10s30s has steepened a tad, potential for reversal post- auction
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Antoine Bouvet (Mizuho Financial Group Inc)
David Schnautz (Commerzbank AG)
Marc-Henri Thoumin (Societe Generale SA)

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UUID: 7947283

HALISTER1: EU CREDIT DAILY: ECB Ahead; Novartis Beats, VW Pays, UBS Snag

EU CREDIT DAILY: ECB Ahead; Novartis Beats, VW Pays, UBS Snag

(Bloomberg) -- Eggs, chips and beans. Likely to be a quiet session in Europe today ahead of the ECB (and Riksbank) rate decisions, even if there is little expectation of any move in rates, Bloomberg strategist Simon Ballard writes.
  • Risk appetite looks firm going into ECB decision but key may be tone of any comments on macro growth outlooks
    • Technical bid for credit may be dented if monetary stimulus portrayed as having run its course while growth prospects remain anemic; central bank rhetoric increasingly ruling out chances of ’helicopter money’
  • Soros’ China comments offer implicit warning against risk appetite exuberance, highlight need for fundamentally-driven investment strategy
  • Structural demand for spread product still reflected in Risk Appetite Model’s slow but steady compression
  • CDX IG currently -1.1bps at 72.93 in overnight session; iTraxx Asia Ex Japan IG is currently -1.1bp at 137.60
NEWS
  • Corporate News
  • Novartis 1Q Core EPS Beats Estimates; Keeps FY16 Forecast
  • SABMiller Fourth-Quarter Sales Advance on Africa, Latin America
  • Sky 9-Month Revenue Rises; 3Q New Customers Adds Beats Estimate
  • Ericsson 1Q Sales, Profit Miss Ests.; Raises Restructuring Est.
  • Pernod Ricard Revenue Meets Analysts’ Estimates on U.S. Demand
  • Saab 1Q Operating Profit Rises; Maintains 2016 Outlook
  • Eurotunnel 1Q Sales Rise 4% to EU279.9b
  • Schneider Electric 1Q Rev. Beats Est., Co. Confirms 2016 Targets
  • Norske Skog 1Q Ebitda Rises From Year Earlier; NIBD Decreases
  • Norwegian Air 1Q Revenue Beats Ests., Net Loss Misses
  • VW Said to Pay At Least $10 Billion in U.S. Diesel-Cheating Suit
  • Financial News
  • UBS, Favored by Bank Investors, Hits Snag in Wealth Expansion
  • Credit Rating News
  • S&P Rpt Examines Key Factors For Toshiba After Downgrades
  • Investors in Leveraged Loans Face Lower Recoveries, Moody’s Says
  • Other News
  • Billionaire Drahi’s Surprise Junk-Debt Binge Caps Chaotic Months
  • Indian Bank Shares Jump as RBI Reported to Ease Bad-Debt Rules
  • Structural Headwinds to Japan Growth Remain Persistent: Moody’s
ANALYST VIEWS
  • And now the unstoppable juggernaut… as bad as the markets were in January and early February, the opposite is now true. The omens appear to be good: creditmarketdaily.com
NEW ISSUES
  • IIC $500m 3Y Reg S FRN 3mL +30
  • Buzzi Unicem EU500m 7Y MS +200
  • KBC Group EU750m 5Y MS +112
  • Heineken EU800m 10Y MS +55
  • Unibail-Rodamco EU500m 11Y, EU500m 20Y Bonds
  • TD Bank EU1b 7Y Covered MS +17
  • HSH Nordbank EU500m 7Y Covered MS +23
  • Hamburg EU750m 10Y MS -1
  • Landesbank Berlin EU150m 0.06% 4/2020 Tap MS -2
  • 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)

Tickers
2539Z GR (European Central Bank)
NOVN VX (Novartis AG)

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UUID: 7947283

HALISTER: Novartis 1Q Core EPS Beats Estimates; Keeps FY16 Forecast

Novartis 1Q Core EPS Beats Estimates; Keeps FY16 Forecast

(Bloomberg) -- Co. still sees FY16 net sales and core oper. income broadly in line with prior yr at constant FX.
  • 1Q net sales: $11.6b vs est. $11.8b
  • 1Q core EPS: $1.17 vs est. $1.15
  • 1Q core oper. income (ebit): $3.26b vs est. $3.15b
  • 1Q core net income: $2.76b
  • Statement
  • NOTE: Yday, PREVIEW NOVARTIS 1Q: Gleevec Patent Expiry, Alcon, FX to Weigh
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
NOVN VX (Novartis AG)

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UUID: 7947283

HALISTER: SoftBank Investors Call for Internal Probe of President Arora

SoftBank Investors Call for Internal Probe of President Arora

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
9984 JP (SoftBank Group Corp)
S US (Sprint Corp)

People
Masayoshi Son (SoftBank Group Corp)
Nikesh Arora (SoftBank Group Corp)
Atul Goyal (Jefferies Singapore Ltd)
David Boies (Boies Schiller & Flexner LLP)
Matthew Schwartz (Boies Schiller & Flexner LLP)

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UUID: 7947283