FANNIE AND FREDDIE MAC REVISED THEIR LENDING LIMITS on multi-family mortgages to $359 billion for 2019 from $339 billion in 2018. “These new multifamily caps eliminate loopholes, provide ample support for the market without crowding out private capital.” The 10-year note spiked 12.4 basis points. S&P -0.16%, DOW +0.12, NASDAQ -0.28%.
PACIFIC GAS & ELECTRIC REACHED AN $11 BILLION SETTLEMENT with insurance companies relating to the deadly wildfires representing 85 percent of the insurance claims. “PG&E is taking money out of the pockets of people whose homes and businesses it burned down and handing the money to insurance companies to buy their cooperation.” PG&E remains under pressure and scrutiny as it emerges from chapter 11 bankruptcy. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bonds. High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded, Pacific Gas & Electric Co. (USD) 3.75% 8/15/2042 made analysts' 'Conviction Buy' list (See the chart below for Pacific Gas & Electric Co. bonds below) Corey Mahoney
| Key Gainers and Losers |
Volume Leaders |
| + |
US Steel Corp. 6.875% 8/15/2025 |
+ 0.0% |
| |
Petrobras Global Finance BV 6.85% 6/5/2115 |
+ 0.6% |
| - |
Petrobras Global Finance BV 7.375% 1/17/2027 |
-1.4% |
|
Western Digital Corp. 4.75% 2/15/2026
HCA Inc. 5.25% 4/15/2025
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
-0.14% |
-0.13% |
1.13% |
6.10% |
13.99% |
16.73% |
| Mining |
-0.07% |
0.43% |
1.87% |
-0.99% |
6.42% |
1.34% |
| Construction |
-0.07% |
-0.05% |
1.64% |
3.99% |
13.76% |
10.55% |
| Manufacturing |
0.04% |
0.11% |
1.29% |
2.59% |
10.75% |
7.79% |
| Transportion, Communication, Electric/Gas |
0.01% |
-0.05% |
1.03% |
3.81% |
13.05% |
9.75% |
| Wholesale |
0.05% |
0.19% |
1.08% |
2.49% |
11.77% |
7.52% |
| Retail |
-0.02% |
0.38% |
1.68% |
2.40% |
13.96% |
9.53% |
| Finance, Insurance, Real-Estate |
-0.02% |
-0.08% |
1.17% |
3.45% |
12.55% |
10.38% |
| Services |
-0.01% |
0.07% |
1.56% |
3.14% |
12.14% |
9.22% |
| Public Administration |
-0.08% |
-0.47% |
0.33% |
3.98% |
12.51% |
16.93% |
| Energy |
-0.15% |
0.18% |
1.73% |
-0.37% |
7.36% |
1.93% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
1. iStar Inc. (USD) 4.75% 10/1/2024 (09/12/2019): 675MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.75%.
2. Patrick Industries Inc. (USD) 7.5% 10/15/2027 144A (09/12/2019): 300MM Senior Unsecured Notes, Price at Issuance 100, Yielding 7.5%.
|
1. Calpine Corp.: $1.4B bonds, Expected Q3 2019
2. Atlantica Tender Drilling Ltd: $140MM, Expected Q3 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 09/13/19 participants welcome a $1200M new corporate-bond offering by
Uber Technologies Inc. The most recent data showed a significant flow into fixed income ETFs for the month of August, with a net inflow of $14.0 billion.
| Top Widening Credit Default Swaps (CDS) |
Top Narrowing Credit Default Swaps (CDS) |
Hertz Corp. (5Y Sen USD XR14)
Hovnanian Enterprises Inc. (5Y Sen USD MR14) |
Cable & Wireless Communication (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- YRC Worldwide Inc., Busy Bees Group LTD, Beazer Homes USA Inc, Murphy Oil USA Inc.
Long-term bond yields are expected to hit a cyclical peak in 2019 given tight fiscal policy and lagging global economies. Europe remains checked by stubbornly low inflationary forces. Positive effects remained in force:
- TED spread held below 18 bp (basis points), as of 09/13/19
- Net positive capital flows into high-yield ETFs & mutual funds
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