European Bond Research – October 23, 2020

GLOBAL MARKETS HIGHER AS DEMOCRATS, THE WHITE HOUSE AND THE SENATE REPUBLICANS, WRESTLE AND COME CLOSER TO PRODUCING A STIMULUS PLAN. CORONA CIRUS IS SURGING GLOBALLY. FTSE 100 +1.29%, German DAX +0.82%, CAC 40 +1.20%, STOXX Europe 600 +0.62%.  The 10-year Gilt was down 0.5 bps.

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 42.3 MILLION+ CASES AND 1.15 MILLION+ 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 0.11% 0.43% 0.34% 1.67% 5.66% 7.21% Mining 0.15% 1.31% -2.30% -0.12% -1.52% 1.15% Manufacturing 0.01% 0.06% 0.94% 2.44% 4.00% 5.75% Transportion, Communication, Electric/Gas -0.16% -0.17% 0.48% 0.62% 3.73% 5.57% Wholesale 0.02% -0.53% 0.82% 1.18% 10.03% 10.10% Retail -0.41% -0.47% 2.87% 25.58% -3.15% -1.52% Finance, Insurance, Real-Estate -0.04% 0.01% 0.61% 2.34% 5.18% 7.99% Services -0.03% 0.12% 1.69% 2.05% 1.01% 4.29% Energy 1.35% 3.29% 12.07% -21.10% -33.42% -39.69%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 37.18,  Belgium 13.63. Sovereign wideners (5Y):  Italy 122.20 and Greece 144.42.

New Issues

New Issues [Continued]

1. Raiffeisenlandesbank Burgenland Und Revisionsverband (EUR) FLT% 10/27/2025 (10/22/2020): 100MM Senior Unsecured Notes, Price at Issuance 101.5. 2. Raiffeisenlandesbank Burgenland Und Revisionsverband (EUR) FLT% 10/28/2027 (10/22/2020): 100MM Senior Unsecured Notes, Price at Issuance 101.4. 3. Getlink SE (EUR) 3.5% 10/30/2025 (10/22/2020): 700MM Secured Notes, Price at Issuance 100, Yielding 3.5%. 4. Ineos Finance PLC (EUR) 3.375% 3/31/2026 Reg S (10/22/2020): 325MM Secured Notes. 5. Jefferies Group Inc. (EUR) VAR% 10/29/2037 (10/22/2020): 50MM Senior Unsecured Notes, Price at Issuance 100. 6. Adevinta ASA (EUR) 2.625% 11/15/2025 Reg S (10/22/2020): 660MM Secured Notes, Price at Issuance 100, Yielding 2.63%. 7. Adevinta ASA (EUR) 3% 11/15/2027 Reg S (10/22/2020): 400MM Secured Notes, Price at Issuance 100, Yielding 3%. 8. Credit Agricole SA (EUR) 1.5% 10/27/2030 (10/23/2020): 161MM Subordinated Notes, Price at Issuance 100, Yielding 1.5%. 9. Toyota Motor Finance (Netherlands) BV (EUR) FLT% 4/29/2022 (10/23/2020): 75MM Senior Unsecured Notes. 10. Oberbank AG (EUR) 0.75% 10/29/2027 (10/23/2020): 65MM Senior Non Preferred Notes.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 10/23/2020, 134.90 NAV as of 10/23/2020, 98.74 Daily NAV Change (%) +0.05% Daily NAV Change (%) +0.25%

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 –0.498%, as of 10/22/2020.

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