HALISTER1: EU CREDIT DAILY: Sentiment Is Fragile; Repsol, Morrison Beat

EU CREDIT DAILY: Sentiment Is Fragile; Repsol, Morrison Beat

(Bloomberg) -- Macro and political sentiment may feel fragile with secondary-market credit spreads biased toward widening in the past couple of sessions, but risk appetite remains underpinned, Bloomberg strategist Simon Ballard writes.
  • News of potential Tier 2 deal for Deutsche Bank assumes enduring investor appetite for yield; bank will hold investor meetings before possible sale of subordinated Tier 2 debt, according to a person familiar with the matter
  • Primary market remains main source of liquidity for investors, but price performance may be mixed
    • 20 of the 35 all-new syndicated bond tranches priced in Europe’s primary market last week have tightened; reflects delicate name/price balance at launch
  • EUR market volumes may be muted today by Ascension holiday; GBP credit focus on U.K. PMI data, London mayor and nationwide local elections
  • Risk Appetite Model seeing small consolidation in line with fragile risk-market sentiment
  • CDX IG closed -0.5bps at 83.58 in overnight session; iTraxx Asia Ex Japan IG is currently -2.6bps at 143.53
NEWS
  • Corporate News
  • Repsol 1Q Adj. Net EU572m; Est. EU261.2m
  • BT 4Q Sales Match Ests., Adj. Ebitda Climbs 14%
  • Rolls-Royce Says 1H Expected to Be Close to Breakeven
  • Morrison Sales Beat Estimates as Potts Turnaround Takes Hold
  • Smith & Nephew 1Q Rev. Misses Est., Still Sees Good FY16 Growth
  • Sunoco LP 1Q Rev. $3.2b, Est. $4.24b
  • Financial News
  • Nedbank Profit Forecast Unchanged as Old Mutual Split Continues
  • HDFC Said to Pick Banks for $400 Million IPO of Insurance Unit
  • Russia Revokes License of Moscow-Based Mostransbank
  • StanChart Names Aaron Gwak Head, Capital Markets ASEAN
  • Credit Rating News
  • NAB Ratings Unchanged After Half-Year Results: S&P
  • South Africa Junk Rating a Matter of Time as Economy Falters
  • Fitch: Japan’s Negative Rates Struggling to Find Traction
  • Fitch Affirms India’s Exim at ’BBB-’; Outlook Stable
  • Other News
  • Gross Sees QE4 Ahead as Citi Says Investors Revive Easing Views
  • Fed, Brexit Stress Likely to Ease in a Few Weeks: Macro View
ANALYST VIEWS
  • The ECB has made for an asset class that is managing to largely withstand the severe ups and downs associated with oil, equities and at times govies. We’ve suggested before, boring is good: creditmarketdaily.com
NEW ISSUES
  • Autoroutes Du Sud EU500m 10Y MS +52
  • FCE Bank EU750m 7Y MS +135
  • Kommunekredit EU500m 10Y MS +6
  • Land NRW EU1b 20Y MS +17
  • Nederlandse Gasunie EU650m 10Y MS +42
  • Rentenbank GBP350m 5Y UKT +31
  • Rexel EU650m 7NC3 at Par to Yield 3.5%
  • 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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