Investment Grade Bond Research - July 22, 2019

Posted by Pierre Robert on Jul 22, 2019 5:28:09 PM

TREASURIES  were mixed to down in Canada and the US-Mostly down in Canada and slightly higher in the United States. Soveriegns in Europe were also mixed. Congress and the White House are close to a debt limit deal. S&P -0.62%, DOW -0.25, NASDAQ -0.74%

ANHEUSER-BUSCH INBEV WORLDWIDE INC after failing to IPO in Hong Kong for $10 billion, decided to sell their Austrailian division  to Asahi Group Holdings for $11 billion. Most of the proceeds will go towards debt reduction. Anheuser-Busch Inbev Worldwide Inc. (USD) 4.75% 1/23/2029 and Anheuser-Busch Inbev Worldwide Inc. (USD) 4.6% 4/15/2048 traded almost $60 million bonds today. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-grade edged out high-yield.  Among high-grade bonds showing topmost price gains at appreciable volumes traded, Southern California Gas (USD) 4.125% 6/1/2048 made analysts' 'Conviction Buy' lists. (See the chart for Southern California Gas (USD) 4.125% 6/1/2048 below.) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Altria Group Inc. 4.8% 2/14/2029 + 1.3%
  Waste Management Inc. 3.45% 6/15/2029 + 0.1%
-   General Electric Co. FLT% PERP (1) -1.3%
  Anheuser-Busch Inbev Worldwide Inc. 4.75% 1/23/2029 -0.0%
United Technologies Corp.   3.75% 11/1/2046
Anheuser-Busch Inbev Worldwide Inc.   4.75% 1/23/2029
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.09% 0.31% -0.04% 3.13% 8.58% 8.29%
Mining -0.12% 0.13% 1.06% 3.13% 9.35% 8.32%
Construction -0.15% 0.22% 0.77% 3.76% 7.20% 7.44%
Manufacturing -0.04% 0.31% 0.83% 3.68% 7.70% 7.18%
Transportion, Communication, Electric/Gas -0.07% 0.49% 1.09% 4.57% 9.87% 9.78%
Wholesale -0.05% 0.42% 0.81% 3.69% 8.32% 7.93%
Retail -0.10% 0.31% 0.90% 4.05% 8.39% 8.21%
Finance, Insurance, Real-Estate -0.07% 0.21% 0.53% 3.03% 6.63% 7.46%
Services -0.06% 0.31% 0.71% 3.82% 7.53% 8.00%
Public Administration -0.07% 0.16% 0.13% 2.10% 3.33% 4.90%
Energy -0.12% 0.15% 1.08% 3.29% 9.59% 8.73%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-07-22T172455.559

New Issues New Issues [Continued]

1. Tampa Electric Co. (USD) 3.625% 6/15/2050 (07/22/2019): 300MM Senior Unsecured Notes, Price at Issuance 98.774, Yielding 3.69%.

2. FedEx Corp. (USD) 3.1% 8/5/2029 (07/22/2019): 1000MM Senior Unsecured Notes, Price at Issuance 99.666, Yielding 3.14%.


Additional Commentary

NEW ISSUANCE WATCH: on 7/19/19 participants welcome a $300MM new corporate-bond offering by Tampa Electric Co. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 7/19/19, with a net inflow of $570MM, six week total $7.4B flowed into high-yield. 
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Weatherford International LTD (5Y Sen USD MR14)
Road King Infrastructure LTD (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed - 2019-07-18T170901.482

Loans and Credit Market Overview


Deals recently freed for secondary trading, notable secondary activity:
  • NGPL Pipeco LLC, Whatabrands LLC,Electricite de France, STAG Industrial Inc.
OVERALL CREDIT MARKET: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 20 bp (basis points), as of 07/22/19
  • Net positive capital flows into high-yield ETFs & mutual funds

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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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