INVESTMENT-GRADE DEBT REGAINED FAVOR as investors scaled back risk upon additional weak economic data released on Friday. Manufacturing output slipped for the second straight month extending fears of a slowing economy following the release of poor data earlier this week. Output dipped 0.4 percent in February and decreased 0.5 percent in January. The 10-year U.S. Treasury note declined 0.3 basis point. The S&P rose +0.50%, the gained Dow +0.54%, while the settled NASDAQ +0.59% higher.
Investment Grade Bond Research – March 15, 2019Posted on March 15, 2019
|Key Gainers and Losers||Volume Leaders|
|Verizon Communications Inc. 4.016% 12/3/2029 144A
Dell Intl LLC 5.3% 10/1/2029 144A
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
|1. Synchrony Financial (USD) 4.375% 3/19/2024 (03/14/2019):600MM Senior Unsecured Notes, Price at Issuance 99.756, Yielding 4.43%.
2. Independent Bank Group Inc. (USD) 4.75% 3/15/2029 (03/14/2019): 50MM Subordinated Notes, Price at Issuance 100, Yielding 4.75%.
JPMorgan Chase & Co. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/8/2019, with a net outflow of $1.69B, year-to-date $7.8B flowed into high-yield.
|Top Widening Credit Default Swaps (CDS)||Top Narrowing Credit Default Swaps (CDS)|
|Weatherford International LTD (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD XR14)
|Cable & Wireless Communication (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- XPO Logistics Inc., MYOB LTD, Dell International, Amer Sports Corp.
OVERALL CREDIT MARKET:
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 18 bp (basis points), as of 03/15/19
- Net positive capital flows into high-yield ETFs & mutual funds
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