EUROPEAN CENTRAL BANK WARNS SEVERAL nations their banks should establish additional capital buffers to minimize risk during a downturn. “The continued build-up of buffers could therefore be justified, especially in those countries where the long upturn may have led to an underestimation of credit risk or where private indebtedness is particularly high or rising,” Stated ECB Vice President Luis de Guindos. British Steel, England’s largest steel producer which employs 5,000 people is on the verge of bankruptcy. The government will have to step in supplying a 30 million pound loan to salvage the failing company as one of its four largest lenders withdrew. “The (company’s) cash was not big enough to sustain even one bank pulling the plug”. ADI (Advantage Data Inc.) extensive corporate-bond index data showed a net daily yield increment for high-grade versus high-yield constituents. High-
|Country||Maturity (Y)||Yield (%)||Previous (%)||Spread (bp)|
Credit-Default Swap Market
|New Issues||New Issues [Continued]|
1. CaixaBank (EUR) 2% 5/30/2029 (05/20/2019): 50MM Subordinated Notes, Price at Issuance 100, Yielding 2%.
2. Euronet Worldwide Inc. (EUR) 1.375% 5/22/2026 (05/20/2019):600MM Senior Unsecured Notes, Price at Issuance 99.524, Yielding 1.447%.
|iShares Core EUR UCITS||iShares Euro High Yield UCITS|
|NAV as of 05/21/2019, 131.67||NAV as of 05/21/2019, 103.51|
|Daily NAV Change (%) -0.14%||Daily NAV Change (%) +0.18%|
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 7.7% (seasonally adjusted, March 2019)
- Eurostat's quarterly GDP: 0.4% (2019 Q1 Preliminary)
- 6-month Euribor: current value -0.241%, as of 05/20/2019
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.