JUNK BONDS REGAINED FAVOR AGAINST HIGH-GRADE debt in net prices linked to actual trades. Treasury yields rose on Friday and finished the month down as investors digested the Feds dovish tone. “The market is still trying to process the change of hearts by the Federal Reserve”, Thanos Bardas. The 10-year Treasury note advanced 1.7 basis points. S&P +0.67%, DOW +0.82%, NASDAQ +0.78%
Investment Grade Bond Research – March 29, 2019Posted on March 29, 2019
|Key Gainers and Losers||Volume Leaders|
|21st Century Fox America 4.03% 1/25/2024 144A
Anheuser-Busch Co. Inc. 4.9% 2/1/2046 144A
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
|1. Vodafone Group PLC (USD) 7% 4/4/2079 (03/28/2019): 2000MM Subordinated Notes, Price at Issuance 100, Yielding 7%.
2. Morgan Stanley (USD) 0% 4/5/2049 (03/28/2019): 80MM Senior Unsecured Notes, Price at Issuance 30.216, Yielding 4.03%.
Citigroup 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)|
|Rite Aid Corp. (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD CR14)
|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:
- 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 03/29/19
- Net positive capital flows into high-yield ETFs & mutual funds
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