Halister News

--TUHIN KAR

(Bloomberg) -- European Union governments agree to a more centralized EU system for approving car models in response to Volkswagen’s emissions-test cheating.

• EU industry ministers decide to give the European Commission, the bloc’s executive arm, the power to fine automakers as much as 30,000 euros per faulty car as part of draft legislation for greater Europe-wide market oversight
• At their meeting in Brussels, the ministers approve a version of the draft law that would also permit the commission to carry out post-approval tests on cars
• NOTE: Final EU endorsement of the new rules requires the ministers to iron out differences with the European Parliament, which set out its position last month
• NOTE: April 4: EU Advances Revamp of Car-Market Oversight Amid VW Fallout Link

(Bloomberg) -- EUR rates market has surrendered to the general search for carry, as the ECB has pushed back against idea of change in forward guidance, while investors believe any tapering decision will not come before September at the earliest, write BofAML strategists including Ralf Preusser in a client note. 

• Lack of major risk events in the meantime further supports carry and roll positions
• Most attractive position for in govt bonds for carry and roll is Italy, clearly standing out vs peers after adjusting for vol
  • Attractiveness of 2y sector in particular may explain the large drop in open interest on the BTS (2y Italian bond future) as rates rallied over the past ten days and short positions have been closed
• In swaps, flies and steepeners offer better carry alternative to short positions; consensus short view is largely negative carry, find that 7s20s and 5s10s steepeners offer positive carry with more attractive entry levels than short 10s
  • Longer-term relationships also show long the belly of 2s3s5s and short that of 5s10s15s are also highly directional with better entry levels and carry than short positions in 5s
• In vol, selling payers, buying receivers, receiver spreads/ladders or a combination of those are the most common expressions of “carry” trades in rates vol; offering long rates and short vol profile
  • With vol, payer skews cheap, the attractiveness of short payers is limited; in the front-end, zero cost receiver ladders/spreads could offer value for those who believe the ECB will insist on the current sequencing without appearing excessively dovish

To contact the reporter on this story: Stephen Spratt in London at sspratt3@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net David Goodman

(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

• IDBI Bank
  • Lower Tier 2 bonds cut to A from AA- at CARE Ratings
  • Cites significant deterioration in asset quality and financial position of the bank in 4Q FY17

UPGRADES

• Ananda Enterprises India Pvt.
  • Long-term rating raised to BB from BB- at ICRA
  • Cites increase in orderbook size, revenue growth and equity infusion from founders

--DOMINIC LAU

(Bloomberg) -- Broadcom preparing >4t yen in funds for acquisition of Toshiba’s semiconductor business and subsequent investments, Nikkan Kogyo reports, citing unidentified people.

• Broadcom offered ~2t yen in acquisition; could increase to ~3t yen
  • Secured ~1.5t yen credit lines from financial institutions
• Preparing funds for 400b yen/year in capex, citing unidentified person
  • Funds including from Silver Lake Partners worth several hundreds of billions of yen for post-acquisition investments
• Broadcom sees focused investments in Toshiba’s Yokkaichi plant in Japan’s Mie prefecture as a key to winning against competitors including Samsung
• INCJ to submit joint bid with other U.S., Japan entities including KKR and DBJ; Apple appears to be interested in joining the bid, Nikkan Kogyo cites unidentified industry official
• Western Digital considering proposal by Toshiba on taking a minority stake in Toshiba’s chip business

Original story (Japanese language): https://goo.gl/retQG4