The European Corporate Bond Market
Expert bond market daily comment from independent credit strategist Dr Suki Mann PLUS free issuance, spread and performance data charts. For access to subscription-only premium insights direct to your email inbox, sign up here.
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Primary revving up
That level of bond acquisition (90% in secondary) should solicit a much more aggressive tightening trend and the resistance to that happening has certainly flummoxed us. Still, we're not going wider when other risk assets are selling off, and the lack of tightening is probably no bad thing for those looking to maintain still decent entry levels when they buy corporate bonds [...]
Draghi is misinformed
The news flow was around BAT's courting of Reynolds for the $47bn (currently valued by BAT) interest it doesn't already hold, while bond investors will be looking forward to Danone's multi-tranche deal to come. That potential BAT/Reynolds deal wasn't the only one to lighten up the day in the US, with talks between Time Warner and AT&T thought to be well-advanced too. [...]
Not rocking the boat
The primary market was FIG and sterling dominated. 'Dominated' is probably too strong a word, given the handful of deals overall. Goldman Sachs took €1.25bn in a strange TLAC eligible 8.5NC7.5 structure and Aviva issued €500m in a 7-year deal. In sterling, Western Power did a small tap (£50m) while National Express was looking to issue a 7-year deal. There are plenty o [...]
Draghi front and centre
So we closed out with European stocks up around 0.3%. Government bonds saw 10-year Gilt yields at 1.08% (unchanged), the 10-year Bund yield at 0.03% (-1bp) and Portugal once again catching the eye as its 10-year debt rallied some more to yield 3.17% - and some 5bp lower in the day. Oil prices had a good day, up by around 2.5% with WTI closing in on $52 per barrel and Bre [...]