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European Bond Research – August 25, 2020

Posted on August 25, 2020
August 25, 2020
Bond Markets


CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 24 MILLION+ CASES AND 822000+ DEATHS.  (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,  LYB International Finance BV (USD) 4.875% 3/15/2044 made some analysts ‘Conviction buy’ lists. (See the chart for  LYB International Finance BV bonds below). Pierre Robert

Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.12% 0.13% 1.64% 7.37% 5.58% 12.03%
Mining -0.01% 1.15% 2.17% 11.14% 2.00% 7.04%
Manufacturing 0.07% -0.75% 2.67% 5.61% -0.70% 0.64%
Transportion, Communication, Electric/Gas 0.07% 0.25% 0.07% 3.22% 3.24% 6.64%
Wholesale -0.50% -0.42% 0.64% 6.67% 2.68% 5.27%
Retail 1.43% 9.83% 13.65% 51.29% -12.33% -2.79%
Finance, Insurance, Real-Estate 0.04% 0.21% 0.90% 5.69% 4.50% 9.55%
Services 0.01% -0.16% 1.34% 8.50% 0.15% 5.82%
Energy -0.18% -0.46% -11.09% 5.04% -25.83% -31.55%
Total returns (non-annualized) by rating, market weighted.
Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 35.82, Belgium 15.03. Sovereign wideners (5Y):  Italy 137.88 and Greece 153.02.

New Issuance

New Issues New Issues [Continued]
1. Barclays Bank PLC (USD) FLT% 8/27/2021 (08/24/2020): 100MM Secured Notes, Price at Issuance 100.

2. Nordea Bank AB (USD) 0.75% 8/28/2025 144A (08/24/2020): 1000MM Senior Preferred Security, Price at Issuance 99.468, Yielding .86%.

3. Nationwide Building Society (USD) 1% 8/28/2025 144A (08/24/2020): 750MM Senior Preferred Security, Price at Issuance 99.859, Yielding 1.03%.

4. Vodafone Group PLC (EUR) VAR% 8/27/2080 (08/24/2020): 1000MM Subordinated Notes, Price at Issuance 100.

5. Nationwide Building Society (USD) 1% 8/28/2025 Reg S (08/24/2020): 750MM Senior Preferred Security, Price at Issuance 99.859, Yielding 1.03%.

6. Royalty Pharma (USD) 3.55% 9/2/2050 Reg S (08/24/2020): 1000MM Senior Unsecured Notes, Price at Issuance 95.306, Yielding 3.81%.

7. Nordea Bank AB (USD) 0.75% 8/28/2025 Reg S (08/24/2020): 1000MM Senior Preferred Security, Price at Issuance 99.468, Yielding .86%.

8. Royalty Pharma (USD) 3.3% 9/2/2040 Reg S (08/24/2020): 1000MM Senior Unsecured Notes, Price at Issuance 95.556, Yielding 3.61%.

9. Royalty Pharma (USD) 1.2% 9/2/2025 Reg S (08/24/2020): 1000MM Senior Unsecured Notes, Price at Issuance 98.875, Yielding 1.43%.

10. Royalty Pharma (USD) 1.75% 9/2/2027 Reg S (08/24/2020): 1000MM Senior Unsecured Notes, Price at Issuance 98.284, Yielding 2.01%.

ADI Indexes


iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 08/25/2020, 133.34 NAV as of 08/25/2020, 100.04
Daily NAV Change (%) -0.40% Daily NAV Change (%) +0.06%

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 rateEXPECTED TO SOAR.
  • Eurostat’s quarterly GDP: EXPECTED TO CONTRACT.
  • 6-month Euribor: current value –0.442%, as of 08/24/2020.

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