European Bond Research – June 26, 2020

CONSUMER SENTIMENT FELL AS WELL AS FLORIDA AND TEXAS REVERSED TRACK AND CLOSED BARS AND RESTAURANTS. MARKETS TANKED DUE TO FALLING CONSUMER SENTIMENT AND SURGING CORONA VIRUS CLOSINGS. FTSE 100 +0.2%, German DAX -0.73%, CAC 40 -0.18, STOXX Europe 600 -0.29%.  The 10-year Gilt was UP 1.8 bps.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 9.8+ MILLION+ CASES AND 495000+ DEATHS. THE VIRUS SEEMS TO BE DOWN TO A TRICKLE IN CHINA AND EUROPE IS STARTING TO OPEN UP AS CASES START TO GET UNDER CONTROL.   (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 -0.11% -0.69% 2.30% 25.91% 0.63% 6.62% Mining -0.07% 1.21% 8.64% 28.63% -1.71% 5.18% Manufacturing -0.06% 0.26% 3.83% 20.30% -1.81% 0.99% Transportion, Communication, Electric/Gas -0.09% -0.33% 0.79% 10.79% 1.16% 7.59% Wholesale -0.34% -0.01% 3.81% 15.21% 0.07% 9.70% Retail -7.63% -8.47% 29.81% -13.59% -24.77% -12.41% Finance, Insurance, Real-Estate -0.10% -0.24% 3.03% 13.22% 1.99% 9.34% Services 0.06% -0.18% 2.90% 20.76% -3.71% 4.70% Energy -0.32% 8.19% 19.57% 185.34% -15.55% -21.58%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 49.9, Belgium 22.04. Sovereign wideners (5Y):  Italy 171.93 and Greece 152.66.

New Issues

New Issues [Continued]

1. Ardonagh Midco 2 PLC (USD) 11.5% 1/15/2027 Reg S (06/25/2020): 500MM Senior Unsecured Notes, Price at Issuance 99, Yielding 11.72%. 2. Ardonagh Midco 2 PLC (USD) 11.5% 1/15/2027 144A (06/25/2020): 500MM Senior Unsecured Notes, Price at Issuance 99, Yielding 11.72%. 3. HT Troplast Aktiengesellschaft (EUR) 9.25% 7/15/2025 Reg S (06/25/2020): 340MM Secured Notes, Price at Issuance 100, Yielding 9.25%. 4. Volvo Treasury AB (SEK) FLT% 12/13/2023 (06/25/2020): 550MM Senior Unsecured Notes, Price at Issuance 98.825. 5. Swedbank AB (JPY) 0.423% 7/4/2025 (06/26/2020): 10700MM Senior Preferred Security, Price at Issuance 100, Yielding .42%. 6. Starts (Ire) Public LTD Co. (USD) 3% 7/28/2021 (06/26/2020): 68MM Secured Notes, Price at Issuance 100, Yielding 3%. 7. Volvo Treasury AB (EUR) 0% 2/11/2023 (06/26/2020): 150MM Senior Unsecured Notes. 8. Volvo Treasury AB (NOK) FLT% 7/3/2024 (06/26/2020): 1100MM Senior Unsecured Notes.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 06/26/2020, 131.66 NAV as of 06/26/2020, 96.78 Daily NAV Change (%) -0.02% Daily NAV Change (%) -0.12%

OVERALL EUROPEAN CREDIT MARKET:
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 rate: EXPECTED TO SOAR.
• Eurostat’s quarterly GDP: EXPECTED TO CONTRACT.
• 6-month Euribor: current value –0.268%, as of 06/25/2020.

Copyright 2020 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.