Credit

IG Cash Spreads Unchanged, HY Spreads Down, But IG Overperforms On Longer Duration And Lower Rates

Busy day in the primary bond market, with the largest corporate offering by far being Salesforce.com US$ 8bn in 6 parts (3Y, 5Y, 10Y, 20Y, 30Y, 40Y)

Published ET

Modified Duration By Rating For US Corporate Bonds | Sources: ϕpost, Refinitiv data

Modified Duration By Rating For US Corporate Bonds | Sources: ϕpost, Refinitiv data

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QUICK SUMMARY

  • The iBoxx USD Liquid Investment Grade Total Return Index was up 0.098% today (Month-to-date: 1.85%; Year-to-date: -1.74%)
  • The iBoxx USD Liquid High Yield Total Return Index was up 0.065% today (Month-to-date: 1.01%; Year-to-date: 2.93%)
  • ICE BofA US Corporate Index (Investment Grade) spread to worst unchanged, now at 82.0 bp (YTD change: -16.0 bp)
  • ICE BofA US High Yield Index spread to worst down -2.0 bp, now at 317.0 bp (YTD change: -73.0 bp)
  • S&P/LSTA U.S. Leveraged Loan 100 Index up 0.02% today (YTD total return: +2.2%)
  • New issues: US$ 12.2bn in dollars and € 18.6bn in euros

US CORPORATE OPTION-ADJUSTED SPREAD (OAS) BY RATING

  • AAA unchanged at 44 bp
  • AA unchanged at 52 bp
  • A down by -1 bp at 66 bp
  • BBB unchanged at 107 bp
  • BB down by -2 bp at 216 bp
  • B down by -3 bp at 344 bp
  • CCC down by -4 bp at 585 bp

ICE BofAML Spreads By Rating | Sources: phipost, Refinitiv data

IG & HY Spreads To Worst | Sources: ϕpost, Refinitiv dataICE BofA US Corporate Spreads To Worst By Rating | Sources: ϕpost, Refinitiv data

CDS INDICES (mid-spreads)

  • Markit CDX.NA.IG 5Y unchanged at 48bp (YTD change: -2.1bp)
  • Markit CDX.NA.HY 5Y up 0.6 bp, now at 274bp (YTD change: -19.6bp)
  • Markit iTRAXX Europe unchanged at 46bp (YTD change: -1.6bp)
  • Markit iTRAXX Japan up 0.1 bp, now at 45bp (YTD change: -6.0bp)
  • Markit iTRAXX Asia Ex-Japan up 0.4 bp, now at 83bp (YTD change: +25.3bp)
CDX.NA Indices Mid Spreads | Sources: ϕpost, Refinitiv dataiTRAXX Indices Mid Spreads | Sources: ϕpost, Refinitiv data

TOP BONDS MOVES IN THE PAST WEEK- USD HY

  • Issuer: Minsur SA (San Borja, Peru) | Coupon: 6.25% | Maturity: 7/2/2024 | Rating: BB- | ISIN: USP6811TAA36 | Z-spread up by 20.7 bp to 336.9 bp, with the yield to worst at 3.6% and the bond now trading down to 106.0 cents on the dollar (1Y price range: 100.6-111.4).
  • Issuer: SoftBank Group Corp (Minato-ku, Japan) | Coupon: 4.75% | Maturity: 19/9/2024 | Rating: BB- | ISIN: XS1684384511 | Z-spread up by 19.6 bp to 207.8 bp, with the yield to worst at 2.5% and the bond now trading down to 106.0 cents on the dollar (1Y price range: 104.4-108.0).
  • Issuer: Petroleos Mexicanos (MIGUEL HIDALGO, Mexico) | Coupon: 4.88% | Maturity: 18/1/2024 | Rating: BB- | ISIN: US71656MAQ24 | Z-spread down by 19.3 bp to 245.6 bp (CDS basis: 27.9bp), with the yield to worst at 2.5% and the bond now trading up to 104.9 cents on the dollar (1Y price range: 102.2-105.6).
  • Issuer: Chengdu Airport Xingcheng Investment Group Co Ltd (Chengdu, China (Mainland)) | Coupon: 6.50% | Maturity: 18/7/2022 | Rating: BB+ | ISIN: XS2025664306 | Z-spread down by 19.4 bp to 363.8 bp, with the yield to worst at 3.7% and the bond now trading up to 102.8 cents on the dollar (1Y price range: 102.0-103.0).
  • Issuer: Jaguar Land Rover Automotive PLC (COVENTRY, United Kingdom) | Coupon: 4.50% | Maturity: 1/10/2027 | Rating: B | ISIN: USG5002FAM89 | Z-spread down by 19.5 bp to 369.2 bp (CDS basis: -17.3bp), with the yield to worst at 4.6% and the bond now trading up to 98.4 cents on the dollar (1Y price range: 93.4-98.4).
  • Issuer: MHP Lux SA (Luxembourg, Luxembourg) | Coupon: 6.95% | Maturity: 3/4/2026 | Rating: B | ISIN: XS1713469911 | Z-spread down by 20.2 bp to 453.3 bp, with the yield to worst at 5.2% and the bond now trading up to 106.1 cents on the dollar (1Y price range: 99.5-109.8).
  • Issuer: Stena AB (Goeteborg, Sweden) | Coupon: 7.00% | Maturity: 1/2/2024 | Rating: CCC+ | ISIN: USW8758PAK22 | Z-spread down by 22.6 bp to 430.5 bp (CDS basis: 10.7bp), with the yield to worst at 4.3% and the bond now trading up to 105.5 cents on the dollar (1Y price range: 96.2-105.5).
  • Issuer: NOVA Chemicals Corp (Calgary, Canada) | Coupon: 5.00% | Maturity: 1/5/2025 | Rating: BB- | ISIN: USC67111AG65 | Z-spread down by 22.6 bp to 221.6 bp (CDS basis: -20.4bp), with the yield to worst at 2.8% and the bond now trading up to 107.0 cents on the dollar (1Y price range: 101.4-107.7).
  • Issuer: Starwood Property Trust Inc (Greenwich, Connecticut (US)) | Coupon: 5.50% | Maturity: 1/11/2023 | Rating: B+ | ISIN: USU85656AE39 | Z-spread down by 33.2 bp to 253.7 bp, with the yield to worst at 2.7% and the bond now trading up to 105.2 cents on the dollar (1Y price range: 103.4-105.5).
  • Issuer: QNB Finansbank AS (Istanbul, Turkey) | Coupon: 6.88% | Maturity: 7/9/2024 | Rating: B | ISIN: XS1959391019 | Z-spread down by 37.8 bp to 361.0 bp (CDS basis: -316.8bp), with the yield to worst at 4.0% and the bond now trading up to 108.0 cents on the dollar (1Y price range: 103.3-110.5).
  • Issuer: Dilijan Finance BV (Amsterdam, Netherlands) | Coupon: 6.50% | Maturity: 28/1/2025 | Rating: B+ | ISIN: XS2080321198 | Z-spread down by 38.2 bp to 613.4 bp, with the yield to worst at 6.4% and the bond now trading up to 99.4 cents on the dollar (1Y price range: 93.6-100.4).
  • Issuer: Grupo de Inversiones Suramericana SA (Medellin, Colombia) | Coupon: 5.50% | Maturity: 29/4/2026 | Rating: BB+ | ISIN: USG42036AB25 | Z-spread down by 39.3 bp to 239.7 bp, with the yield to worst at 3.1% and the bond now trading up to 109.4 cents on the dollar (1Y price range: 107.0-114.6).

TOP BONDS MOVES IN THE PAST WEEK - EUR HY

  • Issuer: International Consolidated Airlines Group SA (London, Spain) | Coupon: 2.75% | Maturity: 25/3/2025 | Rating: B+ | ISIN: XS2322423455 | Z-spread up by 20.1 bp to 302.9 bp, with the yield to worst at 2.6% and the bond now trading down to 100.1 cents on the dollar (1Y price range: 97.9-101.3).
  • Issuer: SoftBank Group Corp (Minato-Ku, Japan) | Coupon: 4.00% | Maturity: 19/9/2029 | Rating: BB- | ISIN: XS1684385591 | Z-spread up by 18.4 bp to 319.5 bp, with the yield to worst at 2.9% and the bond now trading down to 106.0 cents on the dollar (1Y price range: 105.2-111.3).
  • Issuer: Adler Real Estate AG (Berlin, Germany) | Coupon: 3.00% | Maturity: 27/4/2026 | Rating: BB+ | ISIN: XS1713464524 | Z-spread up by 17.8 bp to 240.2 bp, with the yield to worst at 2.0% and the bond now trading down to 103.8 cents on the dollar (1Y price range: 102.9-105.6).
  • Issuer: Standard Industries Inc (Parsippany, New Jersey (US)) | Coupon: 2.25% | Maturity: 21/11/2026 | Rating: BB | ISIN: XS2080766475 | Z-spread up by 12.4 bp to 252.0 bp, with the yield to worst at 2.3% and the bond now trading down to 99.6 cents on the dollar (1Y price range: 97.4-102.9).
  • Issuer: Deutsche Lufthansa AG (Cologne, Germany) | Coupon: 2.88% | Maturity: 11/2/2025 | Rating: BB- | ISIN: XS2296201424 | Z-spread up by 9.7 bp to 256.9 bp (CDS basis: -62.1bp), with the yield to worst at 2.1% and the bond now trading down to 102.2 cents on the dollar (1Y price range: 97.9-103.0).
  • Issuer: Akropolis Group UAB (Vilnius, Lithuania) | Coupon: 2.88% | Maturity: 2/6/2026 | Rating: BB+ | ISIN: XS2346869097 | Z-spread up by 7.9 bp to 348.1 bp, with the yield to worst at 3.1% and the bond now trading down to 98.3 cents on the dollar (1Y price range: 98.2-99.4).
  • Issuer: ACS Actividades de Construccion y Servicios SA (Madrid, Spain) | Coupon: 1.38% | Maturity: 17/6/2025 | Rating: BB+ | ISIN: XS2189592616 | Z-spread down by 8.4 bp to 135.6 bp, with the yield to worst at 1.0% and the bond now trading up to 101.2 cents on the dollar (1Y price range: 100.9-103.4).
  • Issuer: Nexi SpA (Milan, Italy) | Coupon: 1.75% | Maturity: 31/10/2024 | Rating: BB- | ISIN: XS2066703989 | Z-spread down by 9.1 bp to 149.8 bp, with the yield to worst at 1.0% and the bond now trading up to 101.9 cents on the dollar (1Y price range: 100.7-102.9).
  • Issuer: Carnival PLC (Southampton, United Kingdom) | Coupon: 1.00% | Maturity: 28/10/2029 | Rating: B- | ISIN: XS2066744231 | Z-spread down by 9.4 bp to 352.2 bp (CDS basis: -11.0bp), with the yield to worst at 3.1% and the bond now trading up to 82.0 cents on the dollar (1Y price range: 71.0-83.7).
  • Issuer: Jaguar Land Rover Automotive PLC (Coventry, United Kingdom) | Coupon: 6.88% | Maturity: 15/11/2026 | Rating: B | ISIN: XS2010037682 | Z-spread down by 9.5 bp to 365.8 bp (CDS basis: -25.0bp), with the yield to worst at 3.2% and the bond now trading up to 116.3 cents on the dollar (1Y price range: 102.3-116.3).

USD BOND ISSUES

  • Federal Home Loan Banks (Agency | Washington, United States | Rating: NR): US$292m Bond (US3130AN4T46), fixed rate (0.88% coupon) maturing on 12 June 2026, priced at 99.86 (original spread of -2 bp), non callable
  • Federal Home Loan Banks (Agency | Washington, Washington Dc, United States | Rating: NR): US$185m Bond (US3130AN4N75), fixed rate (0.72% coupon) maturing on 14 July 2025, priced at 100.00 (original spread of 47 bp), callable (4nc2)
  • Salesforce.Com Inc (Information/Data Technology | San Francisco, United States | Rating: A+): US$1,500m Senior Note (US79466LAJ35), fixed rate (1.95% coupon) maturing on 15 July 2031, priced at 99.71 (original spread of 50 bp), callable (10nc10)
  • Salesforce.Com Inc (Information/Data Technology | San Francisco, United States | Rating: A+): US$2,000m Senior Note (US79466LAL80), fixed rate (2.90% coupon) maturing on 15 July 2051, priced at 99.72 (original spread of 111 bp), callable (30nc30)
  • Salesforce.Com Inc (Information/Data Technology | San Francisco, United States | Rating: A+): US$1,000m Senior Note (US79466LAG95), fixed rate (0.63% coupon) maturing on 15 July 2024, priced at 99.95 (original spread of 18 bp), callable (3nc3)
  • Salesforce.Com Inc (Information/Data Technology | San Francisco, United States | Rating: A+): US$1,250m Senior Note (US79466LAM63), fixed rate (3.05% coupon) maturing on 15 July 2061, priced at 99.68 (original spread of 95 bp), callable (40nc30)
  • Starwood Property Trust Inc (Real Estate Investment Trust | Greenwich, United States | Rating: BB-): US$400m Senior Note (US85571BAU98), fixed rate (3.63% coupon) maturing on 15 July 2026, priced at 100.00 (original spread of 273 bp), callable (5nc5)
  • Bank of Communications Hong Kong Ltd (Banking | China (Mainland) | Rating: A-): US$1,000m Subordinated Note (XS2357352702), fixed rate (2.30% coupon) maturing on 8 July 2031, priced at 100.00 (original spread of 140 bp), callable (10nc5)
  • Canadian Imperial Bank of Commerce (Banking | Toronto, Canada | Rating: A+): US$2,000m Senior Note (US13607GRX42), fixed rate (1.15% coupon) maturing on 8 July 2026, priced at 99.83 (original spread of 30 bp), non callable
  • Cellnex Finance Company SA (Financial - Other | Madrid, Spain | Rating: BB+): US$600m Senior Note (US15118JAA34), fixed rate (3.88% coupon) maturing on 7 July 2041, priced at 98.72 (original spread of 222 bp), callable (20nc20)
  • Emaar Sukuk Ltd (Financial - Other | Cayman Islands | Rating: NR): US$500m Islamic Sukuk (Hybrid) (XS2356219084), fixed rate (3.70% coupon) maturing on 6 July 2031, priced at 100.00, non callable
  • Mirae Asset Securities Co Ltd (Securities | Seoul, Seoul, South Korea | Rating: BBB): US$300m Senior Note (XS2357422760), fixed rate (1.38% coupon) maturing on 7 July 2024, priced at 99.87 (original spread of 95 bp), non callable
  • New Metro Global Ltd (Financial - Other | Hong Kong | Rating: NR): US$300m Senior Note (XS2353272284), fixed rate (4.63% coupon) maturing on 15 October 2025, priced at 99.42, non callable
  • Shinhan Investment Corp (Securities | Seoul, Seoul, South Korea | Rating: A-): US$200m Index Linked Security (KR6SH0001RZ4) zero coupon maturing on 16 July 2024, priced at 100.00, non callable
  • Single Platform Investment Repackaging Entity SA (Financial - Other | Luxembourg, Netherlands | Rating: NR): US$209m Unsecured Note (XS2353477503) zero coupon maturing on 20 March 2051, priced at 47.94, non callable
  • Wuhan Urban Construction Group Co Ltd (Financial - Other | Wuhan, China (Mainland) | Rating: BBB): US$500m Senior Note (XS2352437334), fixed rate (2.25% coupon) maturing on 9 July 2024, priced at 100.00, non callable

EUR BOND ISSUES

  • BAWAG PSK Bank fuer Arbeit und Wirtschaft und Oesterreichische Postsparkasse AG (Banking | Wien, Austria | Rating: AAA): €150m Fundierte Schuldverschreibungen (Covered Bond) (AT0000A2QN08) zero coupon maturing on 3 July 2023, priced at 100.90, non callable
  • BAWAG PSK Bank fuer Arbeit und Wirtschaft und Oesterreichische Postsparkasse AG (Banking | Wien, Austria | Rating: A): €150m Fundierte Schuldverschreibungen (Covered Bond) (AT0000A2QN16) zero coupon maturing on 5 July 2023, priced at 100.90, non callable
  • BAWAG PSK Bank fuer Arbeit und Wirtschaft und Oesterreichische Postsparkasse AG (Banking | Wien, Austria | Rating: AAA): €150m Fundierte Schuldverschreibungen (Covered Bond) (AT0000A2QMZ4) zero coupon maturing on 3 July 2023, priced at 100.90, non callable
  • DSV Panalpina Finance BV (Financial - Other | Venlo, Denmark | Rating: A-): €600m Senior Note (XS2360881549), fixed rate (0.75% coupon) maturing on 5 July 2033, priced at 99.08 (original spread of 100 bp), callable (12nc12)
  • Erste & Steiermaerkische Bank dd (Banking | Rijeka, Austria | Rating: BBB+): €400m Inhaberschuldverschreibung (AT0000A2RZL4), floating rate maturing on 6 July 2028, priced at 99.51 (original spread of 136 bp), callable (7nc6)
  • European Union (Supranational | Brussels, Bruxelles-Capitale, Belgium | Rating: AAA): €9,000m Senior Note (EU000A3KTGV8) zero coupon maturing on 6 July 2026, priced at 101.69 (original spread of 22 bp), non callable
  • European Union (Supranational | Brussels, Belgium | Rating: AAA): €6,000m Senior Note (EU000A3KTGW6), fixed rate (0.70% coupon) maturing on 6 July 2051, priced at 99.14 (original spread of 40 bp), non callable
  • Lazio, Region of (Official and Muni | Rome, Italy | Rating: BB): €203m Senior Note (XS2358843725), floating rate (EU06MLIB + 48.0 bp) maturing on 7 March 2033, priced at 100.00 (original spread of 405,968 bp), non callable
  • Ontex Group NV (Financial - Other | Aalst, Belgium | Rating: BB-): €580m Senior Note (BE6329443962), fixed rate (3.50% coupon) maturing on 15 July 2026, priced at 100.00 (original spread of 407 bp), callable (5nc2)
  • Premium Green PLC (Financial - Other | Dublin, Dublin, Ireland | Rating: NR): €150m Unsecured Note (XS2357747554), floating rate maturing on 29 June 2028, priced at 100.00, non callable
  • Repsol Europe Finance SARL (Financial - Other | Luxembourg, Spain | Rating: NR): €650m Senior Note (XS2361358299), fixed rate (0.38% coupon) maturing on 6 July 2029, priced at 99.08 (original spread of 86 bp), callable (8nc8)
  • Repsol Europe Finance SARL (Financial - Other | Luxembourg, Spain | Rating: NR): €600m Senior Note (XS2361358539), fixed rate (0.88% coupon) maturing on 6 July 2033, priced at 99.11 (original spread of 116 bp), callable (12nc12)

NEW LOANS

  • Reckitt-Drugs business (B), signed a US$ 250m Term Loan B, to be used for general corporate purposes. It matures on 06/28/26 and initial pricing is set at LIBOR +525.000bps
  • Dau Tieng Tay Ninh Energy, signed a US$ 128m Revolving Credit / Term Loan, to be used for refin/ret bank debt.

NEW ISSUES IN SECURITIZED CREDIT

  • GS Mortgage-Backed Securities Trust 2021-GR1 issued a fixed-rate RMBS in 5 tranches, for a total of US$ 367 m. Bookrunners: Goldman Sachs & Co