RISK-OFF SENTIMENT PREVAILED AS INVESTMENT-GRADE DEBT significantly outpaced junk bonds in net prices linked to actual trades. Equities receded after the release of weak economic data, despite the 11.8 percent increase jump in existing home sales in February. A cooling trend has emerged, “Homes aren’t flying off the market as they have been” Cheryl Young senior economist at Trulia. The 10-year U.S. Treasury note plummeted 9.6 basis point. S&P -1.90%, Dow -1.77%, NASDAQ -2.50%
Investment Grade Bond Research – March 22, 2019Posted on March 22, 2019
|Key Gainers and Losers||Volume Leaders|
|BMW US Capital LLC 1.5% 4/11/2019 144A
Dell Intl LLC 4% 7/15/2024 144A
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
|1. Prime Security Services Borrower LLC (USD) 5.25% 4/15/2024 144A (03/21/2019): 750MM First Lien Notes, Price at Issuance 100, Yielding 5.25%.
2. Bank of Montreal (USD) FLT% 3/26/2022 (03/21/2019): 500MM Senior Unsecured Notes, Price at Issuance 100.
Toyota Credit Canada Inc. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/15/19, with a net inflow of $1.0B, year-to-date $8.2B flowed into high-yield.
|Top Widening Credit Default Swaps (CDS)||Top Narrowing Credit Default Swaps (CDS)|
|Hertz Corp. (5Y Sen USD XR14)
Hovnanian Enterprises Inc. (5Y Sen USD MR14)
|SuperValu Inc. (5Y Sen USD XR14)
San Miguel Corp. (5Y Sen USD CR14)
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Carbonite Inc, HotelBeds, Nine West Holdings Inc., TruGreen LP
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 14 bp (basis points), as of 03/22/19
- Net positive capital flows into high-yield ETFs & mutual funds
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