Halister News

(Bloomberg) -- European credit markets show increasingly bifurcated trends with synthetic indexes buffeted by Brexit and macroeconomic headwinds, while cash bonds are underpinned by ECB CSPP buying, Bloomberg strategist Simon Ballard writes.

• Weak Asian equity markets overnight may set tone for European open; sentiment increasingly fragile on macro outlook, negative yields, sustainability of current risk- asset valuations
• GBP corporate credit shrugging off Brexit uncertainty for now, but volatility may rise again in run-up to June 23 vote
  • A close result could be worst-case scenario for GBP corporate credit mkt; no clear mandate for “Remain” or “Leave” could mean market and risk appetite will be dogged by long-term political and economic uncertainty
• Risk Appetite model continues to highlight resilience of corp credit asset class to current macro and geopolitical challenges

• CDX IG closed +0.3bps at 75.75 in overnight session; iTraxx Asia Ex Japan IG currently -0.9bps at 139.42

NEWS

• Corporate News
• Fuller Smith FY Adj. Pretax Up 12%, YTD LFL Sales Up 2.7%
• U.K. Grocers Fight Discounters With Ramadan Pitch to Muslims
• Sainsbury CFO Rogers to Replace Home Retail CEO Walden
• Statoil Ends Exploration Drilling Campaign Offshore Newfoundland
• Gas Natural Joins Race to Buy T-Solar
• Turk Telekom Fined 34m Liras By Turkey’s Antitrust Board
• SAS 2Q Sales Below Est.; Maintains FY Guidance

• Financial News
• UniCredit to Choose New CEO Within 2 Months: Chairman in Sole
• Banks in Europe Face More Declines in Nordic Analysis of Risks
• Whistle-Blower Said to Aid SEC in Deutsche Bank Bond Probe

• Credit Rating News
• S&PGR Afms Rtgs On Marubeni, Removes Rtgs From CreditWatch Neg
• Moody’s: Indian Public Sector Banks Face High Capital Needs
• Fitch: Japan Banks’ Profitability Pressured By Multiple Headwinds

• Other News
• Pimco Total Return Adds Treasuries as Global Bond Market Surges
• El-Erian Yen Nightmare Helps Send Japan Bond Yields to New Lows
• ECB Doesn’t Need New Stimulus to Reach Goal, Council Member Says
• Puerto Rico Debt-Crisis Plan Passes House in Bipartisan Vote

ANALYST VIEWS

• ECB is buying and spreads are (or will be) going tighter -- everywhere. The pain always comes. We won’t see it. We will just feel it when it does: creditmarketdaily.com

NEW ISSUES

• ASB Finance EU500m 4Y MS +60
• Bunge priced EU600m 7Y bonds at MS +170
• CADES EU600m 0.5% 5/2023 Tap FRTR +9
• DVB Bank EU500m 7Y MS +115
• EIB EU350m 0.375% 3/2022 Tap MS -23
• Ipsen EU300m 7Y MS +180
• Outokumpu EU250m 5NC2 Senior Secured 7.25%
• UBI EU250m 1% 1/2023 Covered Tap MS +13
• Evraz $500m 1/2022 Reg S Notes 6.75%
• Tereos EU400m 7Y 4.25%
• 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.
• NOTE: EU CREDIT DAILY won’t be published June 14-16; regular coverage will resume Friday, June 17.