Halister News

(Bloomberg) -- Credit-market sentiment remains susceptible to macro headlines and commodity-price gyrations. But while equities, iTraxx indexes may show consequent volatility, the relative outperformance of cash corporate bonds highlights the fundamental value and buy-and-hold nature of the latter asset class, Bloomberg strategist Simon Ballard writes.

• Many investors increasingly uncomfortable with compressed level of yields, spreads; encourages increased risk exposure
  • Primary corporate credit mkt may be increasingly aware of need to avoid negative yields to ensure success; Unilever pricing yday
• EU’s Guersent says ECB corporate-bond buying will boost issuance; could take sheen off demand/supply dynamics
• Corporate and sector event risk a clear reminder of underlying fragility of macroeconomic backdrop: Brexit polemic, U.S. rates outlook, British Home Stores administration
  • Default risk highlighted by 1MDB default on 5.75% 2022 bond due to dispute over coupon payment
• Risk Appetite Model remains solidly underpinned for now at least
• CDX IG currently +0.7bps at 74.63 in overnight session; iTraxx Asia Ex Japan IG is currently +0.2bps at 140.90

NEWS

• Corporate News
• BP Profit Falls 80% as Oil Prices Drop; Result Beats Estimates
• Bayer Profit Beats Estimates as Newest Drugs Buoy Demand
• BAT First-Quarter Sales Beat Estimates on Market Share Gains
• Cobham Warns on FY Underlying Trading Profit, Plans Rights Issue
• Whitbread FY Revenue In Line; Confident of Progress This Year
• B/E Aerospace Boosts 2016 Outlook as 1Q EPS, Rev. Beat Estimates
• Countrywide Says Encouraged by Strong 1Q, Maintains FY Outlook

• Financial News
• Van Lanschot 1Q Profit Drops 52%; AUM Rise on Net Inflow
• Swedbank Profit Stagnated Last Quarter as New CEO Takes Helm
• St James’s Place FUM Rises, Net FUM Inflow Increases
• Deutsche Bank Board Members Will Seek Thoma Resignation: FAZ

• Credit Rating News
• S&P Assigns ’A-3’ Rtg To Kraft Heinz Prop. CP Prog

• Other News
• MUFG Sees Bosses Orders Behind Tripling of Japan Long-Bond Sales
• Fed to Keep Options Open for June Rate Hike: Decision-Day Guide

ANALYST VIEWS

• Unilever...new issue premiums (were) higher at the front end versus the existing curve, because anything (much) less and they would potentially be offering a bond with a negative yield. No one wants that, literally: creditmarketdaily.com

NEW ISSUES

• JPMorgan Chase EU1.5b 10.5Y Senior MS +88
• Unilever EU1.5b 4Y, 8Y, 12Y Bonds
• ABB Finance EU700m 7Y MS +35
• CFF EU1b 9/2024 Covered MS +9
• Rhineland-Pfalz EU150m 0.125% 3/2023 Tap MS -9
• 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.