INVESTMENT-GRADE DEBT NARROWLY EDGED OUT JUNK BONDS in net prices linked to actual trades. Equities failed to find a direction upon the release of revised GDP growth cutting the fourth-quarter growth to 2.2 percent from 2.6 percent, well below the 3 percent annual target. Economists blame softer consumer spending and a decline in business investment from China, a result of the ongoing trade dispute. The 10-year Treasury note advanced 1.4 basis points. S&P +0.39%, DOW +0.37%, NASDAQ+0.37%
Investment Grade Bond Research – March 28, 2019Posted on March 28, 2019
|Key Gainers and Losers||Volume Leaders|
|Wells Fargo Bank NA 2.4% 1/15/2020
General Motors Co. 4% 4/1/2025
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
|1. Smithfield Foods Inc. (USD) 5.2% 4/1/2029 144A (03/27/2019):400MM Senior Unsecured Notes, Price at Issuance 99.492, Yielding 5.27%.
2. Smithfield Foods Inc. (USD) 5.2% 4/1/2029 Reg S (03/27/2019):400MM Senior Unsecured Notes, Price at Issuance 99.492, Yielding 5.27%.
Smithfield Foods Inc. 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)|
|Weatherford International LTD (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD XR14)
|San Miguel Corp. (5Y Sen USD CR14)
Atmos Energy Corp. (5Y Sen USD MR14)
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Kirby Corp., Syneos Health, Inc., Fred Olsen Wind LTD, Carbonite Inc
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 03/28/19
- Net positive capital flows into high-yield ETFs & mutual funds
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