European Bond Research – May 14, 2020

EUROPE CONTINUED WITH A DOWN DAY AS THE US REPORTED ALMOST 3 MILLION MORE FILING FOR UNEMPLOYMENT. FRANCE AND ITALY STILL STRUGGLE TO OPEN BUT GERMANY REOPENING SEEMS TO BE GOING MORE SMOOTHLY.  FTSE 100 -0.02%, German DAX -1.95%, CAC 40 -1.65%, STOXX Europe 600 -2.15%.  The 10-year Gilt was down .1 bps.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 4.46+ MILLION+ CASES AND 302000+ 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,  Mylan Inc. (USD) 3.75% 12/15/2020 made some analysts ‘Conviction buy’ lists. (See the chart for  Mylan Inc. bonds below). Pierre Robert

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.02% 1.07% 5.27% -4.45% -3.16% 9.56% Mining 1.49% 1.24% 3.71% -12.64% -11.02% -3.11% Construction 0.11% -0.19% 7.42% -14.49% -11.57% -9.29% Manufacturing 0.09% 0.37% 2.12% -7.81% -4.60% -1.24% Transportion, Communication, Electric/Gas 0.15% 0.73% -1.01% -9.63% -8.37% -0.31% Wholesale -0.01% 0.40% 4.81% -6.23% -4.95% 6.00% Retail -1.77% -1.87% -2.83% -8.56% -3.35% 7.23% Finance, Insurance, Real-Estate -0.04% 0.84% 2.27% -6.64% -4.01% 5.37% Services -0.10% -0.18% 2.73% -10.66% -9.84% 0.63% Energy -0.23% 0.11% 25.25% -31.32% -32.83% -37.03%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 54.9, Belgium 38.65. Sovereign wideners (5Y):  Italy 230.48  and Greece 270.12.

New Issues

New Issues [Continued]

1. PPF Telecom Group BV (EUR) 3.5% 5/20/2024 (05/13/2020): 500MM Secured Notes, Price at Issuance 99.634, Yielding 3.6%. 2. Amadeus It Group SA (EUR) 2.5% 5/20/2024 (05/13/2020): 500MM Senior Unsecured Notes. 3. Amadeus It Group SA (EUR) 2.875% 5/20/2027 (05/13/2020): 500MM Senior Unsecured Notes. 4. Deutsche Post AG (EUR) 1% 5/20/2032 (05/13/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.014%. 5. Deutsche Post AG (EUR) 0.75% 5/20/2029 (05/13/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding .764%. 6. Deutsche Post AG (EUR) 0.375% 5/20/2026 (05/13/2020): 750MM Senior Unsecured Notes, Price at Issuance 100, Yielding .467%. 7. Erste Group Bank AG (EUR) 0% 6/15/2030 (05/13/2020): 300MM Subordinated Notes, Price at Issuance 100. 8. Societe National (USD) 0.625% 5/20/2023 (05/13/2020): 1250MM Senior Unsecured Notes, Price at Issuance 99.665, Yielding .737%. 9. Daimler AG (EUR) 2.375% 5/22/2030 (05/13/2020): 750MM Senior Unsecured Notes, Price at Issuance 99.806, Yielding 2.397%. 10. Daimler AG (EUR) 1.625% 8/22/2023 (05/13/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.83, Yielding 1.68%.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 05/14/2020, 128.51 NAV as of 05/14/2020, 91.47 Daily NAV Change (%) -0.02% Daily NAV Change (%) -0.76%

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 –0.142%, as of 05/13/2020.

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.