INVESTMENT GRADE-DEBT EDGED OUT JUNK BONDS in net prices linked to actual trades. Housing starts plunged nearly 9 percent in February; the northeast took the most significant hit as permits sank 30 percent. The hottest housing markets, Seattle and San Francisco continue to show signs of cooling off even as interest rates decline. The 10-year U.S. Treasury note rose 1.5 basis point. S&P +0.37%, Dow +0.27%, NASDAQ +0.32%
Investment Grade Bond Research – March 26, 2019Posted on March 26, 2019
|Key Gainers and Losers||Volume Leaders|
|FirstEnergy Transmission LLC 4.55% 4/1/2049 144A
Maple Escrow Subsidiary Inc. 3.551% 5/25/2021 144A
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
|1. Sanders RE LTD (USD) FLT% 4/7/2023 (03/25/2019): 300MM Senior Unsecured Notes, Price at Issuance 100.
2. FirstEnergy Transmission LLC (USD) 4.55% 4/1/2049 Reg S (03/25/2019): 500MM Senior Unsecured Notes, Price at Issuance 99.821, Yielding 4.56%.
Merna Reinsurance The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/22/19, with a net inflow of $1.8B, year-to-date $10B flowed into high-yield.
|Top Widening Credit Default Swaps (CDS)||Top Narrowing Credit Default Swaps (CDS)|
|Rite Aid Corp. (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD CR14)
|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:
- Fred Olsen Wind LTD, 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 17 bp (basis points), as of 03/26/19
- Net positive capital flows into high-yield ETFs & mutual funds
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