RISK TAKING WAS SCALED BACK AS INVESTMENT-GRADE DEBT ROSE against its high-yield counterpart in net prices linked to actual trades. The Federal Reserve held interest rates at their current levels following the meeting on Wednesday. Jerome Powell stated softening inflation is likely to be “transient,” but if easing inflation persists it is “something we would be concerned about.” The 10-year note gained 0.7 basis points. S&P -0.57%, DOW -0.44%, NASDAQ -0.32%.
Investment Grade Bond Research – May 1, 2019Posted on May 1, 2019
|Key Gainers and Losers||Volume Leaders|
|General Motors Financial Co. Inc. FLT% 4/13/2020
Comcast Corp. 4.6% 10/15/2038
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
|1. Ford Motor Credit Co. (USD) 5.113% 5/3/2029 (04/30/2019):1250MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.11%.
2. Textron Inc. (USD) 3.9% 9/17/2029 (04/30/2019): 300MM Senior Unsecured Notes, Price at Issuance 99.911, Yielding 3.91%.
CNA Financial Corp. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 4/26/19, with a net outflow of $0.520B, year-to-date $13.8B 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 CR14)
|SuperValu Inc. (5Y Sen USD MR14)
San Miguel Corp. (5Y Sen USD CR14)
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- iHeartCommunications Inc., Flexera Software Inc., JBS USA LLC, Sundyne US Purchaser
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 16 bp (basis points), as of 05/01/19
- Net positive capital flows into high-yield ETFs & mutual funds
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