Halister News

(Bloomberg) -- Credit sentiment feels as though it may be stalling under the weight of new issuance and damped by persistent global macroeconomic concerns, Bloomberg strategist Simon Ballard writes.

• Still, there is likely to be no capitulation, and the ECB’s corporate-sector purchase plan will offer strong technical support within demand-supply dynamics over coming months; however, it may be natural to expect some near-term consolidation as market digests recent supply
• Flows in GBP credit likely to remain light ahead of macro data later; BOE rate decision, minutes and inflation report due 12pm BST; press conference due to start at 12.30pm local time
• Gyrations in equity indexes likely to be driven by mixed corporate earnings announcements, may also affect direction of synthetic credit risk
  • Cash bonds’ lower relative liquidity/buy-and-hold status should continue to offer more stable price performance vs CDS

• Risk Appetite Model holds steady as volatility eases and spread dispersion edges modestly higher
• CDX IG currently quoted +0.5bps to 81.11 in overnight session; iTraxx Asia Ex Japan IG is currently +0.4bps to 143.61

NEWS

• Corporate News
• Nissan in Talks for Stake in Scandal-Hit Mitsubishi Motors
• LafargeHolcim Earnings Miss Estimates on Brazil, Russia Slowdown
• Toshiba Raises Net Income Forecast on Sale of Appliance Division
• ITV Says Revenue Growth Continuing; Sees Good 1H Profit Growth
• RWE First-Quarter Profit Beats Estimates on Trading Gains
• Rank Group 19-Week LFL Rev. Up 3%; Sees FY In Line With Plan

• Financial News
• Credit Agricole Quarterly Profit Falls on Decline in Trading
• Deutsche Pfandbriefbank 1Q Pretax Profit Drops 12% to EU45m
• Zurich Insurance Net Beats Estimates as Overhaul Continues
• NBAD CEO Thursby Says Retail, Bonds, Forex to Drive Earnings
• Generali Profit Drops After Year-Earlier Gain Isn’t Repeated
• MetLife Hires Wells Fargo’s Hall to Lead Investor Relations
• Natixis Said to Force Dubai Group Sale of EFG, Bank Muscat Stake
• UniCredit Plans to Cut 2,045 Jobs in Austria by 2018: Presse

• Credit Rating News
• S&PGR Assigns ’BBB+’ Rating To Con Edison’s $500 Million Notes
• Moody’s Assigns Japan Post Bank A1 Long-term Domestic FX Rating

• Other News
• Investors Fleeing $9 Trillion of Negative Yields Fuel Bond Binge
• LendingClub Tries to Reassure Investors as Bond Deals Stall
• ECB Can Still Pull Rabbits Out of the Hat, Council Member Says
• World’s Most Expensive Bonds Keep Selling in Land of Minus Rates

ANALYST VIEWS

• US corporate borrowers have accounted for over 25% of YTD IG euro-denominated non-financial corp debt...another unintended consequence of the ECB’s CSPP: creditmarketdaily.com

NEW ISSUES

• Agence France Locale EU500m 3/2023 OAT +31
• State of Berlin EU500m 16Y MS +11
• City of Bochum EU115m 10Y MS +50
• DG Hyp EU500m Short 10Y Covered MS -2
• EIB EU350m 1.125% 9/2036 Tap MS +1
• FMS Wertmanagement $500m 2Y FRN 3mL +9
• General Motors Financial EU500m 4Y MS +125
• Johnson & Johnson EU4b 4-Part Deal
• Kraft Heinz Foods EU1.8b 8Y, 12Y Bonds
• Next GBP300m 12Y UKT +205
• Santander Consumer Finance EU750m 5Y MS +105
• Spain EU3b 50Y MS +250
• Total EU1.75b PNC6 Hybrid Bond 3.875%
• WEPA Hygieneprodukte EU450m 8NC3 Notes at 3.75%
• 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.