Halister News

(Bloomberg) -- EUR credit mkt facing a delicate balancing act between finding yield and preserving capital amid negative yield environment; a task made all the more challenging by an anemic macroeconomic backdrop and latest geopolitical uncertainty, Bloomberg strategist Simon Ballard writes.

• Corp bonds, with added support of ECB CSPP, remain the asset class of choice for many investors, but with an understandable up in quality bias
  • Asian credit mkts regaining some composure overnight suggest a firm, but low volume, end to the week for EUR risk assets
• EU referendum campaigning in U.K. suspended following MP’s murder Thursday, but Brexit likely to remain key driver of mkt sentiment and volatility in run up to vote on June 23
• CDX IG closed -2.3bps at 82.85 in overnight session; iTraxx Asia Ex Japan IG currently -2.8bps at 147.59

NEWS

• Corporate News
• 1MDB Confident of Legal Position in Debt Dispute With Abu Dhabi
• Tesco Agrees to Sell Dobbies Garden Centres for GBP217m Cash
• Ford Says Building Most Popular SUVs For Extra Week This Summer
• BMW Asia Says Vietnam Is a Top Growth Market as Economy Expands
• Smith & Wesson Jumps as Outlook Tops Estimates on Gun Demand

• Financial News
• HSBC Says Unit to Book $585 Million Charge on Settlement
• Bankinter to Distribute First Dividend Against 2016 Earnings
• Fortum Signs EU1.75b 5Y Revolving Credit Facility From 17 Banks
• Pimco Cuts Jobs After Decline in Assets Since Gross’s Exit

• Credit Rating News
• Yen May Climb as Japan Faces Another Lost Decade, Says Moody’s
• Fitch: Australian Bank Capital Ratios Understate True Position
• KNOC ratings unaffected by govt’s restructuring plan: Moody’s
• Pakistan Political Instability Credit Negative at Moody’s
• Fitch Places Crown Resorts on RWN Following Proposed Demerger

• Other News
• Chinese Bonds Poised for Biggest Weekly Advance in Five Months
• End Is Nigh for Japan Yield as Investors Chase 40-Year Toward 0%

ANALYST VIEWS

• We are all going to be adding greater levels of risk as we search for ever riskier, higher yielding assets. The corporate bond market (corporate borrowers, short-term performance) is a beneficiary in this case: creditmarketdaily.com

NEW ISSUES

• Eutelsat EU500m 5Y MS +120
• Salini Impregilo EU300m 5NCL Notes 3.75%
• Cott Finance EU450m 8NC3 Senior Notes 5.50%
• 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.