Halister News

(To subscribe to EU Credit Daily, click here and set alert via ‘"Display & Edit’’) By Simon Ballard (Bloomberg) -- Tightening of cash bond spreads contrasts with failure of synthetic indexes to hold onto tighter lvls, Bloomberg strategist Simon Ballard writes.

• Cash bond spreads ratcheting tighter continue to highlight the buy-and-hold nature of the asset class, as well as perhaps the steady decline in secondary credit mkt liquidity; synthetic indexes fail to hold onto tighter lvls - closing Wednesday around the day’s wides, which underscores the degree of caution embedded in investor sentiment

• Asian equities extending gains overnight should help cash credit spreads maintain the tightening bias shown Wednesday
  • Aggressive additional easing from the ECB next week would be a further fillip for risk appetite
  • Lack of non-financial corporate issuance may also reflect issuer and investor uncertainty over macroeconomic and rates outlook
• Risk Appetite model reflects strong underlying demand for spread product, notwithstanding current caution over macro, rates outlook

• CDX IG currently -0.8bps at 100.06 in overnight session; iTraxx Asia Ex Japan IG is currently -1.7bps at 151.55

NEWS

• Corporate News
• Ahold Earnings Beat Estimates on Revamp in U.S., Netherlands
• Travis Perkins 2015 Sales Rise 6.5%, Lfl Rev. Up 3.8%
• Cobham 2015 Adj EPS Misses Est.; Sees Stable Trading in Defense
• Whitbread 4Q Premier Inn, Costa LFL Sales Miss Ests.
• Adidas Sees 10% to 12% Earnings Growth as Consumers Spend More
• Delhaize Dividend Tops Ests.; 2016 Capex Seen Rising to ~EU825m

• Financial News
• Standard Bank Full-Year Profit Rises 34% After U.K. Disposal
• Schroders FY Adj Pretax Tops Est; Dobson to Become Chairman
• Allied Irish Banks 2015 Pretax Profit EU1.9b, Up 72% Y/y
• Bawag 2015 Net Income Rises 26% to EU418m; Proposes EU325m Div.
• SNS Bank Says 2015 Profit Ex-Items Rose to EU335m From EU294m
• Deutsche Bank Veterans Nichol, Torres Said Poised to Depart

• Rating News
• Moody’s Shifts to Negative Outlook on 25 Chinese Financial Firms
• Moody’s Takes Rating Actions on Five Omani Banks, One Finance

• Other News
• Pimco’s Inflation Call Is Paying Off, Whatever Dudley’s Concern
• Negative Rate Abyss Is Here as Denmark Prepares for Next Round

ANALYST VIEWS

• The uptick in supply of late has managed to inject a bit of liquidity into the corporate bond market, but we need to see it keep coming to maintain the edge this market has right now: creditmarketdaily.com

NEW ISSUES

• United Overseas Bank EU500m 5Y Cov MS +32
• Sparebank 1 Boligkreditt EU1B 7Y Cov MS +23
• Swedbank EU400m 3Y FRN 3mE +45
• Motability Operations GBP600m 20Y UKT +155
• Belfius Bank EU500m 6Y Covered MS +17
• Nestle $400m 5Y MS +72
• Grenke Finance EU125m 4/2021 at 1.55%
• 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.