HALISTER1: AUCTION PREVIEW: 2036 Gilt Linker Seen Offering Value in ASW

AUCTION PREVIEW: 2036 Gilt Linker Seen Offering Value in ASW

(Bloomberg) -- U.K. to sell 0.125% I/L 11/2036 bonds for GBP1b at 11:30am CET. Analysts see value in owning on ASW, vs I/L 2037 bond.
  • BNP (Shahid Ladha)
    • Little value in real yields, prefer shorter-maturity breakevens; longer-dated UKT(i) ASWs offer strong structural value at current lvls
    • 20Y has cheapened ~15bps on 10s20s30s UKTi real-yield fly in 2016, sector looks cheapest on the nominal curve
    • End of fiscal year, extremely large deficits, no more conventional or linker supply until FY 2016/17 -- these factors bode well for demand
  • SocGen (Marc-Henri Thoumin)
    • Pricing of this issue relatively straightforward given real-yield curve only marginally inverted post 12Y; real yields on long-end linkers within a 3bps-4bps range
    • RPI curve always relatively humped in the 20Y sector as many defined benefit pension-fund liabilities peak around that point
    • Recent relative underperformance of this area of the curve in swaps may lead to ASW demand; auction relatively small, should be well covered
  • Santander (Adam Dent)
    • Bond will have similar duration to the overall gilt linker portfolio; current 1.5bps spread vs similar (but slightly rich) I/L 2037s looks attractive
    • 20Y linkers not attractive outright, real yields close to all-time lows
    • Real-yield curve is flat, stable around 10s30s; little sign of concession
    • Breakevens have fallen in recent months, 20Y sector is relatively rich on the breakeven curve
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Adam Dent (Abbey Natl Treasury Services)
Marc-Henri Thoumin (Societe Generale SA)
Shahid Ladha (BNP Paribas SA)

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UUID: 7947283

HALISTER: Goldman Hired Daughter of Najib Ally Amid 1MDB Pitch, WSJ Says

Goldman Hired Daughter of Najib Ally Amid 1MDB Pitch, WSJ Says

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
GS US (Goldman Sachs Group Inc/The)
0206021D MK (1Malaysia Development Bhd)

People
Edward Naylor (Goldman Sachs Group Inc/The)
Kimora Lee Simmons (Just Fabulous Inc)
Mahathir Mohamad (Proton Holdings Bhd)
Michael Duvally (Goldman Sachs Group Inc/The)
Mohd Abdul Razak (Federation of Malaysia)

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UUID: 7947283

HALISTER1: EU CREDIT DAILY: ECB Holds Key; VW, Abengoa, Aviva, HSBC, ANZ

EU CREDIT DAILY: ECB Holds Key; VW, Abengoa, Aviva, HSBC, ANZ

(To subscribe to EU Credit Daily, click here and set alert via ‘"Display & Edit’’) By Simon Ballard (Bloomberg) -- One might expect a fairly muted European session in credit mkts this morning ahead of ECB later, with a seemingly high potential for investor disappointment with the result, Bloomberg strategist Simon Ballard writes.
  • Credit mkts are looking for ECB to deliver at least a 10bps deposit-rate cut and an additional EU10bn of monthly asset purchases
    • But risk assets may struggle to produce meaningful positive reaction to anything less than the aspirational 20bps cut and EU20bn QE increase that many investors are hoping to see
  • After recent tightening in spreads, ECB may now hold key to near-term direction of Risk Appetite model
  • CDX IG currently +0.1bps at 96.23 in overnight session; iTraxx Asia Ex Japan IG is currently -1.1bps at 147.14
NEWS
  • Corporate News
  • Linde Sees Challenging 2016 as Quarterly Profit Drops on Oil
  • Carrefour Profit Meets Estimates as European Stores Revive
  • Morrison Sees GBP50m-GBP100m Incremental Underlying Pretax
  • Agfa-Gevaert Forecasts Higher Rev. for 2016; EU3b in Medium- Term
  • Volkswagen U.S. CEO Leaves Suddenly Following Diesel Scandal
  • Abengoa Sees Up to EU1.8B in ‘New Money’ in Restructuring Accord
  • Financial News
  • Hannover Re 4Q Profit Rises 26%; Plans to Pay Special Dividend
  • Aviva FY IFRS Profit Dips, Op Profit, NAV Rise
  • Deutsche Bank, HSBC Fight Fed’s ‘Unfair’ Too-Big-to-Fail Plans
  • SMBC Nikko Hires Growney to Sell U.S. Debt as Business Expands
  • Sanlam Full-Year Profit Little Changed as Life Insurance Slumps
  • Rating News
  • No Sale Time Like Present for S.A. on Cusp of Downgrade
  • Moody’s Says ASIC Case Against ANZ Bank Is Credit Negative
  • Other News
  • Draghi Marks a Year of QE With Suspense of ‘No Limits’ Stimulus
  • China Inflation Fastest Since Mid-2014 as Food Prices Jump
  • ‘Brexit’ and Taxes Play Tug of War on British Housing Market
ANALYST VIEWS
  • That the corporate bond market would maintain a positive total return through the year so far despite spreads being wider by 35bp at one stage...highlights the inherent stability and attractiveness of the IG bond market: creditmarketdaily.com
NEW ISSUES
  • Ferrari (not rated) EU500m 7Y at MS +140
  • Pemex EU1.35b 3Y at MS +395; EU900m 7Y at MS +495
  • Berkshire Hathaway EU1b 4Y at MS +60; EU1b 8Y at MS +95, EU750m 12Y at MS +140
  • City of Dortmund EU120m 6Y FRN 3mE +39
  • FMS GBP150m 1% 4/2018 Tap UKT +52
  • EIB GBP300m 5/2021 FRN Tap 3mL +40
  • Land NRW EU1.585b 7Y Green Bond MS -2
  • RCI Banque EU500m 3Y FRN 3mE +100
  • Affordable Housing GBP194m 2.893% 8/2043 Tap UKT +43
  • 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)
VOW GR (Volkswagen AG)
HSBA LN (HSBC Holdings PLC)

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HALISTER1: Korean Won, Taiwan Dollar, Rupee Forwards Most Active on DTCC

Korean Won, Taiwan Dollar, Rupee Forwards Most Active on DTCC

(Bloomberg) -- USD/KRW non-deliverable forwards account for 49.1% of total volume today, according to trades reported to DTCC; USD/TWD second-most active at 12.9%, USD/INR third-most active at 12.3%.
  • Notional amounts traded include:
    • $180m of USD/KRW at 1,210.10; matures June 15
  • Total volume was $11.2b as of 2:53pm HKT; global total yesterday was $73.8b, with USD/KRW accounting for 24.7%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER: Carrefour 2015 Recurring Oper. Income In Line, Div. Misses

Carrefour 2015 Recurring Oper. Income In Line, Div. Misses

(Bloomberg) -- Carrefour 2015 recurring oper. income EU2.45b, est. EU2.45b.
  • Div. EU70c, BDVD forecast EU74c
  • France recurring oper inc. down 6.4% current FX to EU1.19b
  • Other Europe recurring oper. inc. up 33% current FX to EU567m
  • Emerging mkts recurring oper. inc. down 5.2% current FX to EU718m
  • 2015 adjusted net income, Group share EU1.11b, est. EU1.15b
  • 2015 net sales up 3% at current FX to EU76.9b
  • Net debt reduced by EU408m to EU4.5b
  • FCF EU687m vs EU306m in 2014
  • 2016 outlook: Total investments of between EU2.5b and EU2.6b, constant focus on FCF generation, maintain BBB+ rating
  • NOTE: Reported 2015 sales including VAT EU86.3b on Jan. 15
  • Call 9:30am CET +44 203 367 9462
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
CA FP (Carrefour SA)

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UUID: 7947283

HALISTER1: Longer-Term JGBs Sold on Worry Over High Volatility: SMBC Nikko

Longer-Term JGBs Sold on Worry Over High Volatility: SMBC Nikko

(Bloomberg) -- JGB market is still reeling from aftermath of elevated volatility in past 2-3 days, making investors nervous, says Makoto Noji, senior interest-rate strategist at SMBC Nikko Securities, in an interview.
  • “Longer-dated sector was sold on concerns over high volatility,” says Tokyo-based Noji; adds investors usually make their purchases on an assumption that market will be somewhat stable
  • Says today’s 5-year JGB sale went “smoothly,” in line with market expectations, due to pre-auction concession; NOTE: 5- year auction drew average yield of -0.142%, fresh record low
  • 5-year yield up 2 bps to -0.155% in secondary market
  • 10-year yield up 2 bps to -0.010%, 20-year yield up 4.5 bps to 0.490% and 30-year yield up 8 bps to 0.785%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Makoto Noji (SMBC Nikko Securities Inc)

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UUID: 7947283

HALISTER1: New York Post: ONE57 linked to global money-laundering probe | New York Post

New York Post: ONE57 linked to global money-laundering probe | New York Post

Alert: HALISTER1
Source: NYP (New York Post)

Tickers
0206021D MK (1Malaysia Development Bhd)
1011839Z US (Extell Development Co)
185587Z UH (International Petroleum Investment Co)

People
Gary Barnett (Extell Development Co)
Mohamed Al-Husseiny (Aabar Investments PJSC)
Tim Leissner (Goldman Sachs Group Inc/The)

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UUID: 7947283