European Bond Research - October 22, 2019

Posted by Andrew Robartes on Oct 22, 2019 12:10:43 PM
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BRITISH PRIME MINISTER BORIS JOHNSON continues to look for support amongst lawmakers in his efforts to remove the U.K. from the European Union. Johnson is hoping to accelerate the timetable of the process, but needs backing from British Parliament. British stocks rose today while the rest of Europe remained relatively steady. FTSE 100 +0.87%, German DAX +0.08%, CAC 40 +0.03%, STOXX Europe 600 +0.09%. The 10-year Gilt was down 4.7 bps.

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IN THE CORPORATE BOND SPACE, Carnival PLC recently priced $600 million worth of senior unsecured notes due 10/28/2029 with a yield at issue of 1.045%. The issuance of these bonds came at the same time the British-American cruise operator repurchased 50 thousand of its own shares. (Advantage Data Inc.).  Extensive corporate-bond index data showed a net daily grade increment for high-grade versus high-yield constituents. High-yield bonds edged out high-grade debt as of 3 PM, London time.  Among European high-yield bonds showing a concurrence of top price gains at appreciable volumes traded,  Petrobras Global Finance BV (USD) 5.75% 2/1/2029 made some analysts 'Conviction buy' lists. (See the chart for Petrobras Global Finance BV bonds below). Andrew Robartes


Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Belgium 200 bp and Denmark 38 bp. Sovereign wideners (5Y):Italy 46 bp and Ireland 149 bp.

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New Issuance

New Issues New Issues [Continued]

1. Carnival PLC (EUR) 1% 10/28/2029 (10/21/2019): 600MM Senior Unsecured Notes, Price at Issuance 99.575, Yielding 1.045%.

2. Pernod Ricard SA (EUR) 0% 10/24/2023 (10/21/2019): 500MM Senior Unsecured Notes.


ADI Indexes

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iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 10/22/2019, 134.22 NAV as of 10/22/2019, 103.71
Daily NAV Change (%) +0.10% Daily NAV Change (%) +0.04%

The euro-zone economy shows signs of negative momentum, weakening credit rating quality, and uncertainty regarding the outcome of Brexit. Closely watched indicators and rates:
  • Eurostat's unemployment ratecurrently 7.5% (seasonally adjusted, May 2019)
  • Eurostat's quarterly GDP: 0.4% (2019 Q1)
  • 6-month Euribor: current value -0.349%, as of 10/22/2019

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Topics: High Yield, Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, Finance, Fixed Income, News, Syndicated Bonds, syndicated, research, market update

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