Halister News

(Bloomberg) -- While the core scenario is for higher euro rates in the medium-term, this trend looks shaky on a shorter time frame; prefer holding carry strategies over coming months, write SocGen analysts including Adam Kurpiel in a client note.

• Favors leveraged roll-down strategies in EUR vol, with the belly of the curve to find support from falling headline inflation in late 2017, though the drop will be limited given upbeat economic picture
  • Buy EUR 6m 2y3y ATMF/ATMF -15bps 1x2 receiver spread at zero-cost
• Weak inflation and encouraging economic growth support tighter sovereign spreads in the medium term
  • “Absolute yields have been volatile of late, but non-core spreads have remained relatively protected, especially in the 2-5y area. We expect this to continue in July and August. We also like chasing discrepancies that could prove relatively immune to the ECB’s stance”
  • Favors owning 5y BTP vs Bund for carry and roll, offering 9bp/3-month reward
  • Sees 2s5s France as flat compared to Bunds; sees no reason for persistence in this de-synchronization, expect a catch-up in correlations over the coming weeks; recommends entering 2s5s OAT steepeners vs bund at 4.5bps in yield, targets 13bps, stop -2bps
• In the U.K., recommends long 1.25% 07/2027 on asset swap vs selling 4% 01/2060 at a spread of -20bps, targets -25bps, with a stop at -17bps
  • “The BOE does not look ready to raise rates just yet, but the market will remain nervous, with a decent premium priced for the November meeting. The forces supporting longs are set to abate. This is especially the case for ultra longs, where the late summer syndication and political risks are not reflected in asset swap spreads”

To contact the reporter on this story: Abigail Morris in London at amorris93@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Neil Chatterjee

(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

• IFCI Factors
  • Long-term bank facilities cut to BBB(SO) from BBB+(SO) at Care
  • Cites stress on profitability, deterioration in asset quality
• Pranaav Marathe Jewellers
  • LT bank facilities cut to D from B+ at Care
  • Cites overdrawn working capital facilities

UPGRADES

• Akhil Ship Breakers
  • Non fund-based limits raised to B from B- at India Ratings
  • Cites improvement in scale of operations
• Chemco Plastic
  • LT bank facilities raised to BBB+ from BBB at Crisil
  • Cites healthy cash accruals
• RKEC Projects
  • LT bank facilities raised to BB+ from BB at Crisil
  • Cites ramp-up in scale of operations
• Wave Hospitality
  • LT bank facilities raised to BB+ from BB- at Crisil
  • Expects increase in avg rent per room and robust occupancy