THE AUTOMOTIVE INDUSTRY IN BRITAIN SUFFERED ANOTHER MAJOR BLOW on Thursday following Ford announcing the closure of its plant in Bridgend, south Wales next year. In a statement, Ford's Europe President Stuart Rowley stated, “Changing customer demand and cost disadvantages, plus an absence of additional engine models for Bridgend going forward make the plant economically unsustainable in the years ahead”. The closure of the plant will displace 1,700 jobs, in addition, the company intends to scale back operations in Germany slashing 5,000 jobs. ADI (Advantage Data Inc.) extensive 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, WPP Finance Corp. (USD) 3.75% 9/19/2024 made some analysts' 'Conviction Buy' lists. (See the chart for WPP Finance Corp. bonds below). Corey Mahoney (cmahoney@advantagedata.com).
Sovereign-Debt Snapshot
| Country | Maturity (Y) | Yield (%) | Previous (%) | Spread (bp) | |
|---|---|---|---|---|---|
| Australia | 10 | 1.492 | 1.510 | -62.9 | |
| Belgium | 10 | 0.222 | 0.244 | -189.9 | |
| France | 10 | 0.160 | 0.184 | -196.1 | |
| Germany | 10 | -0.224 | -0.206 | -234.5 | |
| Italy | 10 | 2.489 | 2.527 | 36.8 | |
| Japan | 10 | -0.126 | -0.101 | -224.6 | |
| Netherlands | 10 | -0.034 | -0.021 | -215.5 | |
| Portugal | 10 | 0.679 | 0.723 | -144.2 | |
| Spain | 10 | 0.639 | 0.663 | -148.2 | |
| Sweden | 10 | -0.049 | -0.064 | -217.0 | |
| U.K. | 10 | 0.866 | 0.902 | -125.5 | |
| U.S. | 10 | 2.121 | 2.134 | ... | |
Credit-Default Swap Market
New Issuance
| New Issues | New Issues [Continued] |
|---|---|
|
1. MMK Intl Capital Dac (USD) 4.375% 6/13/2024 Reg S (06/05/2019): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.38%. 2. Euronext NV (EUR) 1.125% 6/12/2029 (06/05/2019): 500MM Senior Unsecured Notes, Price at Issuance 99.12, Yielding 1.219%. |
ADI Indexes
| iShares Core EUR UCITS | iShares Euro High Yield UCITS |
| NAV as of 06/06/2019, 132.37 | NAV as of 06/06/2019, 103.12 |
| Daily NAV Change (%) +0.13% | Daily NAV Change (%) +0.11% |
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 -0.254%, as of 06/05/2019
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