JUNK BONDS ROSE AGAINST INVESTMENT GRADE DEBT in net prices linked to actual trades. Treasury yields ticked higher on Tuesday following optimism from the White House regarding China trade talks stating the tariff war is “a little squabble”. The 10-year note gained 1.6 basis points. Equities regained some losses from yesterday, S&P - +1.03%, Dow +1.05%, NASDAQ +1.34%.
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| Key Gainers and Losers | Volume Leaders | |||||||||
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Bristol-Myers Squibb Co. 3.4% 7/26/2029 144A Buckeye Partners LP 4.875% 2/1/2021 |
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| New Issues | New Issues [Continued] |
|---|---|
|
1. NSTAR Electric Co. (USD) 3.25% 5/15/2029 (05/14/2019): 400MM Senior Unsecured Notes, Price at Issuance 99.78, Yielding 3.28%. 2. SunTrust Bank Inc. (USD) 2.8% 5/17/2022 (05/14/2019): 1350MM Senior Unsecured Notes, Price at Issuance 99.949, Yielding 2.82%. |
Additional Commentary
| Top Widening Credit Default Swaps (CDS) | Top Narrowing Credit Default Swaps (CDS) |
| Weatherford International LTD (5Y Sen USD XR14) Hertz Corp. (5Y Sen USD CR14) |
Cable & Wireless Communication (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD MR14) |
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Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:Deals recently freed for secondary trading, notable secondary activity:
- Eldorado Gold Corp., Oryx Midstream, Hargray Communications Group Inc., Rikshem AB
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 12 bp (basis points), as of 05/14/19
- Net positive capital flows into high-yield ETFs & mutual funds
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