Advantage Data High Yield Bond Market Summary

European Bond Research - March 14, 2019

Posted by Niral Mehta on Mar 14, 2019 12:09:22 PM
EUROPEAN SHARES RALLIED HIGHER after UK parliament voted a deal must occur between the UK and the European Union; creating a "stable" environment for the near term. David Lafferty, Chief Market Strategist at Natixis stated, “Strong macro data, lifted by better earnings trends, and confirmed by stable-to-rising yields will increase equity prices.” There is “gradual” optimism being priced into the markets and barring something highly unlikely, the “possibility of an actual no-deal zero but less than 5 percent,” mentioned Tim Graf, Head of Macro Strategy at State Street Global Advisors. The Pound slipped 0.7 percent after advancing by more than 1 percent on Wednesday. The UK 10-year Gilt rose 2 basis points. FTSE 100, +0.50%, STOXX Europe 600 +0.63%, CAC 40 +0.63%, German DAX +0.18%.

BANKS CHARTER COURT AND ONESAVINGS are set to form Britain’s largest “specialist lender” in a merger that will boost their “defenses in the face of uncertainty brought on by Brexit.” Following the merger of the two companies, they will hold an aggregate market value of 1.75 billion pounds. OneSavings CEO, Andy Golding announced, “Both lenders are strong and can leverage resources to reduce headwind around Brexit.” The lending sector faces a “string of tax and regulatory changes,” in which consolidation of resources can be beneficial to companies. ADI (Advantage Data Inc.) corporate-bond index data showed a net daily yield increment for high-grade versus high-yield constituents. High-grade bonds edged out high-yield debt as of 3 PM, London time. Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded, BP Capital Markets Plc (USD) 2.518% 1/16/2020 made some analysts' 'Conviction Buy' lists. (See the chart for BP Capital Markets Bondsbelow). Niral Mehta (nmehta@advantagedata.com).

Sovereign-Debt Snapshot

Country Maturity (Y) Yield (%) Previous (%) Spread (bp)
Australia 10 1.968 2.043 -64.0  
Belgium  10 0.536 0.546 -207.2  
France  10 0.470 0.415 -213.8  
Germany  10 0.066 0.057 -254.2  
Italy  10 2.559 2.540 -4.8  
Japan  10 -0.046 -0.030 -265.4  
Netherlands  10 0.156 0.151 -245.2  
Portugal  10 1.341 1.332 -126.7  
Spain  10 1.198 1.069 -140.9  
Sweden  10 0.291 0.297 -231.7  
U.K.  10 1.199 1.166 -140.9  
U.S.  10 2.608 2.609 ...

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Finland 12 bp and Belgium 23 bp. Sovereign wideners (5Y): France 29 bp and Portugal 68 bp.

New Issuance

New Issues New Issues [Continued]

1. Raiffeisen Bank Intl. AG (EUR) 1% 3/29/2027 (03/13/2019): 50MM Senior Unsecured Notes, Price at Issuance 100.5, Yielding .94%.

2. Aegean Airlines SA (EUR) 3.6% 3/12/2026 (03/13/2019): 200MM Unsecured Notes, Price at Issuance 100, Yielding 3.6%.

3. Sanofi (EUR) 0% 3/21/2022 (03/13/2019): 850MM Senior Unsecured Notes.

 

ADI Indexes

DATA CHECK:
iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 03/14/2019, 130.40 NAV as of 03/14/2019, 102.91
Daily NAV Change (%) +0.18% Daily NAV Change (%) +0.31%

OVERALL EUROPEAN CREDIT MARKET:
The euro-zone economy shows signs of positive momentum, although conditions are expected to deteriorate hindered by the termination of quantitative easing, weakening credit rating quality, and uncertainty regarding the outcome of Brexit. Closely watched indicators and rates:
  • Eurostat's unemployment rate: currently 7.8% (seasonally adjusted, January 2019)
  • Eurostat's quarterly GDP: 0.2% (2018 Q3 Final)
  • 6-month Euribor: current value -0.232%, as of 03/13/2019

Copyright 2019 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

Topics: Analytics, bonds, bond market, market analytics, research, EU, market update, European


Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 6,200+ CDS reference entities
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 16 products and services from debt to CDS to loans to mid-market
  • Used by top buy and sell-side firms worldwide

 

Subscribe to Email Updates

Recent Posts