HALISTER1: EU CREDIT DAILY: Demand Intact; JD Wetherspoon, Monte Paschi

EU CREDIT DAILY: Demand Intact; JD Wetherspoon, Monte Paschi

(Bloomberg) -- Lack of ECB action yesterday may have disappointed some mkt participants, but there should be no mistaking the strength of current credit market dynamics, Bloomberg strategist Simon Ballard writes.
  • Depth of risk appetite highlighted by recent sales of corp issuance at negative yields; demand for long-dated zero-cpn bonds
    • Demand/supply dynamics likely underpinned by ’Goldilocks’ macro environment over coming months, but any medium-term uncertainty over fundamentals, risk asset bubbles, may begin to fuel degree of defensive investment bias
  • Asian equities mixed overnight on news of latest N. Korean nuclear test; credit indexes remain firm nonetheless
  • Risk Appetite Model edging steadily tighter as spread dispersion evaporates
  • Bloomberg Barclays Eur-Agg Corporate index closed yday at 107bps (-1bp); Bloomberg Barclays Eur HY index closed at 359bps (+4bps)
  • CDX IG closed -0.3bp at 75.28 in overnight session; iTraxx Asia Ex Japan IG currently -0.7bp at 106.22 and iTraxx Australia quoted -0.1bp at 95.29
NEWS
  • Corporate News
  • JD Wetherspoon FY Adj. Pretax Beats, YTD Sales Up 4.1%
  • EON’s Uniper Float Is Harbinger for More Billion-Euro Writedowns
  • Global Ports 1H Net Surges to $113m vs $34.7m Y/y
  • TSMC Aug. Sales Rise 40.7% Y/y to NT$94.31 Billion
  • Mitsubishi Motors Says Will Prevent Mileage Scandal Recurrence
  • China Power, Hub Power JV Gets Pakistan Electricity Gen. License
  • Financial News
  • Monte Paschi’s Board to Meet by Sunday to Name New CEO
  • Yes Bank Falls After $1b Institutional Share Sale Deferred
  • Bank Indonesia Sees 2016 Loan Growth at 7%-9% at Year End
  • UniCredit Said to Consider Capital Increase of Up to EU10b
  • Credit Rating News
  • Poland Seen Skirting Another Downgrade as Moody’s Is Kept at Bay
  • Other News
  • Cracks Are Appearing in Bond Market That Led Record Global Rally
  • Crackdown Prompts Mitsubishi UFJ Rethink on Stock Research
  • North Korea Says It Tested Nuclear Bomb, Can Miniaturize Weapons
  • Alarm Bells Sound on Headlong Rush Into Fringes of Emerging Junk
ANALYST VIEWS
  • The corporate bond market is in good shape... There’s plenty of cash to put to work, supply is coming - and will come thick and fast - while returns promise to hold up too: creditmarketdaily.com
NEW ISSUES
  • EIB GBP500m 10Y UKT +36
  • Iberdrola EU700m 9Y Green Bond MS +32
  • Landsbankinn EU500m 3/2021 MS +190
  • Telefonica EU1b PNC5.5 Hybrid 3.75%
  • AXA $850m PerpNC5.5Y Tier 2 at 4.5%
  • PartnerRe Ireland Finance EU750m 10Y MS +105
  • Crown Holdings EU600m 8Y, $400m 10Y Notes
  • Schaeffler EUR3.59b Equiv Multi Tranche Notes
  • 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)

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