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Daily Archives: 7th November 2019

7th November 2019

Twin peaks

iTraxx Main

48.3bp, -1bp

iTraxx X-Over

231.3bp, -1bp

🇩🇪 10 Yr Bund

-0.24%, +8bp

iBoxx Corp IG

B+108.8bp, -1bp

iBoxx Corp HY

B+384bp, -7bp

🇺🇸 10 Yr US T-Bond

1.96%, +14bp

🇬🇧 FTSE 100

6382.41, (-0.64%)
🇩🇪 DAX

12487.36, (-0.45%)
🇺🇸 S&P 500

3122.87, (-0.28%)

Record supply meets the demand…

There are still six weeks of business left in the market this year, but already IG non-financial corporate bond issuance has set a fresh record. Deals from Apple and Bayer took us zipping past the €285bn record from 2009. And a trio of transactions in a busy high yield primary market made for 2019 being the second-best year for deals in this market (€62bn). The final full-year volume for the former will comfortably exceed €310bn while the high yield volume will likely come in around €70bn – and short of the record €75bn issuance from 2017.

It was an eventful session with records broken but also, quite surprisingly, a couple of deals pulled as investors’ tolerance levels were breached. The push backs aside (and there have been a few this year), the heavy load of issuance in 2019 has not had a negative impact on spreads. In fact, the supply of deals has been comfortably absorbed, subsequent demand remains at elevated levels and final bond pricings continue to be rammed tighter versus initial guidance. Let the music play on.

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