BLACKROCK WITHDRAWS FROM A PROPOSED RESCUE PLAN OF ITALY’S CARIGE BANK citing no reason for pulling out. Blackrock was to inject 720 million euros into the bank with the support of other Italian banks taking a 43 percent stake in the rescue plan. In a statement Carige declared “We will evaluate other market solutions aimed at ensuring the stability and turnaround of Banca Carige,” in addition the bank might “request for a precautionary recapitalization to the economy ministry.” 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, HSBC Holdings PLC (USD) 2.95% 5/25/2021 made some analysts' 'Conviction Buy' lists. (See the chart for HSBC Holdings PLC bonds below). Corey Mahoney (cmahoney@advantagedata.com).
Sovereign-Debt Snapshot
| Country | Maturity (Y) | Yield (%) | Previous (%) | Spread (bp) | |
|---|---|---|---|---|---|
| Australia | 10 | 1.746 | 1.794 | -73.7 | |
| Belgium | 10 | 0.420 | 0.417 | -206.2 | |
| France | 10 | 0.327 | 0.330 | -215.5 | |
| Germany | 10 | -0.042 | -0.036 | -252.4 | |
| Italy | 10 | 2.613 | 2.586 | 13.1 | |
| Japan | 10 | -0.051 | -0.050 | -253.3 | |
| Netherlands | 10 | 0.136 | 0.142 | -234.6 | |
| Portugal | 10 | 1.083 | 1.093 | -139.9 | |
| Spain | 10 | 0.957 | 0.965 | -152.5 | |
| Sweden | 10 | 0.113 | 0.115 | -237.0 | |
| U.K. | 10 | 1.138 | 1.159 | -134.4 | |
| U.S. | 10 | 2.482 | 2.458 | ... | |
Credit-Default Swap Market
New Issuance
| New Issues | New Issues [Continued] |
|---|---|
|
1. Virgin Media Secured Finance PLC (GBP) 5.25% 5/15/2029 Reg S (05/09/2019): 300MM Secured Notes, Price at Issuance 100, Yielding 5.25%. 2. Erste Group Bank AG (EUR) FLT% 5/9/2024 (05/09/2019): 50MM Secured Notes, Price at Issuance 101.35. |
ADI Indexes
| iShares Core EUR UCITS | iShares Euro High Yield UCITS |
| NAV as of 05/09/2019, 131.62 | NAV as of 05/09/2019, 102.9 |
| Daily NAV Change (%) -0.23% | Daily NAV Change (%) -0.41% |
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 -0.230%, as of 05/08/2019
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