Credit

HY Cash Spreads Edge Down, IG Unchanged On Very Quiet Day

In the primary bond market, notable deals were Aon printing US$ 1bn in 2 tranches and Howmet Aerospace $700m in a single tranche

Published ET

Spreads On Norwegian Cruise Line Bonds Have Widened Again This Week (USG6436QAL08 shown here) | Source: Refinitiv

Spreads On Norwegian Cruise Line Bonds Have Widened Again This Week (USG6436QAL08 shown here) | Source: Refinitiv

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QUICK SUMMARY

  • S&P 500 Bond Index was up 0.01% today, with investment grade up 0.01% and high yield up 0.06% (YTD total return: -0.13%)
  • The iBoxx USD Liquid Investment Grade Total Return Index was up 0.03% today (Month-to-date: -0.62%; Year-to-date: -0.76%)
  • The iBoxx USD Liquid High Yield Total Return Index was up 0.06% today (Month-to-date: -0.29%; Year-to-date: 2.94%)
  • ICE BofA US Corporate Index (Investment Grade) spread to worst unchanged at 89.0 bp (YTD change: -9.0 bp)
  • ICE BofA US High Yield Index spread to worst down -2.0 bp, now at 349.0 bp (YTD change: -41.0 bp)
  • S&P/LSTA U.S. Leveraged Loan 100 Index up 0.01% today (YTD total return: +2.2%)
  • New issues: US$ 3.9bn in dollars and € 5.5bn in euros

US CORPORATE OPTION-ADJUSTED SPREAD (OAS) BY RATING

  • AAA unchanged at 51 bp
  • AA up by 1 bp at 60 bp
  • A unchanged at 74 bp
  • BBB up by 1 bp at 116 bp
  • BB down by -2 bp at 234 bp
  • B down by -2 bp at 394 bp
  • CCC down by -3 bp at 657 bp

ICE BofAML US Corporate Spreads | Sources: phipost.com, Refinitiv data

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

CDS INDICES (mid-spreads)

  • Markit CDX.NA.IG 5Y up 0.5 bp, now at 50bp (YTD change: +0.3bp)
  • Markit CDX.NA.HY 5Y up 2.7 bp, now at 296bp (YTD change: +2.3bp)
  • Markit iTRAXX Europe unchanged at 46bp (YTD change: -1.5bp)
  • Markit iTRAXX Japan unchanged at 46bp (YTD change: -5.7bp)
  • Markit iTRAXX Asia Ex-Japan down 3.2 bp, now at 80bp (YTD change: +22.2bp)
CDX NA IG & HY Indices Mid Spreads | Sources: ϕpost, Refinitiv data iTRAXX Indices Mid Spreads | Sources: ϕpost, Refinitiv data

TOP BONDS MOVES IN THE PAST WEEK - USD HY

  • Issuer: Syngenta Finance NV (Enkhuizen, Netherlands) | Coupon: 4.44% | Maturity: 24/4/2023 | Rating: BB | ISIN: USN84413CM88 | Z-spread up by 156.0 bp to 260.0 bp, with the yield to worst at 2.7% and the bond now trading down to 102.5 cents on the dollar (1Y price range: 101.5-106.4).
  • Issuer: NCL Corporation Ltd (Miami, Bermuda) | Coupon: 5.88% | Maturity: 15/3/2026 | Rating: CCC+ | ISIN: USG6436QAL08 | Z-spread up by 47.9 bp to 547.1 bp, with the yield to worst at 6.1% and the bond now trading down to 98.5 cents on the dollar (1Y price range: 98.0-105.3).
  • Issuer: Grupo de Inversiones Suramericana SA (Medellin, Colombia) | Coupon: 5.50% | Maturity: 29/4/2026 | Rating: BB+ | ISIN: USG42036AB25 | Z-spread up by 42.6 bp to 282.4 bp, with the yield to worst at 3.4% and the bond now trading down to 107.7 cents on the dollar (1Y price range: 107.0-114.6).
  • Issuer: Royal Caribbean Cruises Ltd (Miami, Liberia) | Coupon: 5.50% | Maturity: 1/4/2028 | Rating: B | ISIN: USV7780TAE39 | Z-spread up by 33.2 bp to 473.7 bp (CDS basis: -37.3bp), with the yield to worst at 5.6% and the bond now trading down to 98.5 cents on the dollar (1Y price range: 98.2-105.9).
  • Issuer: LGI Homes Inc (The Woodlands, Texas (US)) | Coupon: 4.00% | Maturity: 15/7/2029 | Rating: BB- | ISIN: USU5286JAB53 | Z-spread up by 31.8 bp to 289.1 bp, with the yield to worst at 4.0% and the bond now trading down to 99.8 cents on the dollar (1Y price range: 99.5-101.5).
  • Issuer: Bank of Bahrain and Kuwait BSC (Manama, Bahrain) | Coupon: 5.50% | Maturity: 9/7/2024 | Rating: B | ISIN: XS2017807301 | Z-spread up by 31.8 bp to 321.6 bp, with the yield to worst at 3.5% and the bond now trading down to 104.9 cents on the dollar (1Y price range: 101.2-106.6).
  • Issuer: Banco Safra SA (Cayman Islands Branch) (George Town, Cayman Islands) | Coupon: 4.13% | Maturity: 8/2/2023 | Rating: BB- | ISIN: US05964TAQ22 | Z-spread up by 31.4 bp to 167.4 bp, with the yield to worst at 1.7% and the bond now trading down to 103.2 cents on the dollar (1Y price range: 102.3-104.8).
  • Issuer: Dilijan Finance BV (Amsterdam, Netherlands) | Coupon: 6.50% | Maturity: 28/1/2025 | Rating: B+ | ISIN: XS2080321198 | Z-spread up by 29.2 bp to 644.0 bp, with the yield to worst at 6.6% and the bond now trading down to 98.8 cents on the dollar (1Y price range: 93.6-101.0).
  • Issuer: Jersey Central Power & Light Co (Akron, Ohio (US)) | Coupon: 4.70% | Maturity: 1/4/2024 | Rating: BB+ | ISIN: USU04536AC95 | Z-spread up by 28.4 bp to 95.7 bp (CDS basis: -57.7bp), with the yield to worst at 1.3% and the bond now trading down to 107.8 cents on the dollar (1Y price range: 107.8-109.8).
  • Issuer: CBOM Finance PLC (DUBLIN, Ireland) | Coupon: 4.70% | Maturity: 29/1/2025 | Rating: BB | ISIN: XS2099763075 | Z-spread down by 20.0 bp to 265.4 bp, with the yield to worst at 2.9% and the bond now trading up to 104.8 cents on the dollar (1Y price range: 99.6-104.8).
  • Issuer: Rakuten Group Inc (Setagaya, Japan) | Coupon: 3.55% | Maturity: 27/11/2024 | Rating: BB+ | ISIN: XS2080765154 | Z-spread down by 25.3 bp to 155.2 bp, with the yield to worst at 2.0% and the bond now trading up to 104.5 cents on the dollar (1Y price range: 103.6-108.0).
  • Issuer: YPF SA (Buenos Aires, Argentina) | Coupon: 6.95% | Maturity: 21/7/2027 | Rating: CCC | ISIN: USP989MJBL47 | Z-spread down by 30.5 bp to 1,358.9 bp, with the yield to worst at 13.8% and the bond now trading up to 72.3 cents on the dollar (1Y price range: 56.6-72.8).
  • Issuer: National Bank of Oman SAOG (Muscat, Oman) | Coupon: 5.63% | Maturity: 25/9/2023 | Rating: BB- | ISIN: XS1884006559 | Z-spread down by 34.1 bp to 254.3 bp, with the yield to worst at 2.7% and the bond now trading up to 105.6 cents on the dollar (1Y price range: 101.3-105.6).
  • Issuer: Guacolda Energia SA (LAS CONDES, Chile) | Coupon: 4.56% | Maturity: 30/4/2025 | Rating: B+ | ISIN: USP3711HAF66 | Z-spread down by 35.7 bp to 1,859.7 bp, with the yield to worst at 18.7% and the bond now trading up to 62.4 cents on the dollar (1Y price range: 53.5-92.1).

TOP BONDS MOVES IN THE PAST WEEK - EUR HY

  • Issuer: Telecom Italia SpA (Rome, Italy) | Coupon: 3.00% | Maturity: 30/9/2025 | Rating: BB | ISIN: XS1497606365 | Z-spread up by 22.3 bp to 165.1 bp (CDS basis: -20.6bp), with the yield to worst at 1.2% and the bond now trading down to 107.0 cents on the dollar (1Y price range: 106.3-108.0).
  • Issuer: ZF Europe Finance BV (Amsterdam, Netherlands) | Coupon: 2.50% | Maturity: 23/10/2027 | Rating: BB+ | ISIN: XS2010039977 | Z-spread up by 14.0 bp to 208.5 bp, with the yield to worst at 1.6% and the bond now trading down to 104.1 cents on the dollar (1Y price range: 99.0-105.7).
  • Issuer: Adler Group SA (Senningerberg, Luxembourg) | Coupon: 2.25% | Maturity: 14/1/2029 | Rating: BB+ | ISIN: XS2283225477 | Z-spread up by 13.4 bp to 339.7 bp, with the yield to worst at 3.0% and the bond now trading down to 94.2 cents on the dollar (1Y price range: 92.8-98.9).
  • Issuer: SoftBank Group Corp (Minato-Ku, Japan) | Coupon: 3.38% | Maturity: 6/7/2029 | Rating: BB+ | ISIN: XS2361255057 | Z-spread up by 9.2 bp to 405.8 bp, with the yield to worst at 3.7% and the bond now trading down to 97.2 cents on the dollar (1Y price range: 95.7-99.9).
  • Issuer: Deutsche Lufthansa AG (Cologne, Germany) | Coupon: 3.75% | Maturity: 11/2/2028 | Rating: BB- | ISIN: XS2296203123 | Z-spread up by 9.2 bp to 351.6 bp (CDS basis: -74.3bp), with the yield to worst at 3.0% and the bond now trading down to 103.0 cents on the dollar (1Y price range: 97.6-105.3).
  • Issuer: International Consolidated Airlines Group SA (London, Spain) | Coupon: 3.75% | Maturity: 25/3/2029 | Rating: B+ | ISIN: XS2322423539 | Z-spread up by 6.4 bp to 396.2 bp, with the yield to worst at 3.6% and the bond now trading down to 100.2 cents on the dollar (1Y price range: 97.5-102.0).
  • Issuer: Teva Pharmaceutical Finance Netherlands II BV (Amsterdam, Netherlands) | Coupon: 1.63% | Maturity: 15/10/2028 | Rating: BB- | ISIN: XS1439749364 | Z-spread up by 5.4 bp to 337.0 bp, with the yield to worst at 3.0% and the bond now trading down to 90.7 cents on the dollar (1Y price range: 87.1-92.6).
  • Issuer: Netflix Inc (Los Gatos, California (US)) | Coupon: 4.63% | Maturity: 15/5/2029 | Rating: BB+ | ISIN: XS2076099865 | Z-spread up by 5.2 bp to 134.8 bp, with the yield to worst at 1.0% and the bond now trading down to 126.1 cents on the dollar (1Y price range: 120.0-128.0).
  • Issuer: Syngenta Finance NV (Enkhuizen, Netherlands) | Coupon: 1.25% | Maturity: 10/9/2027 | Rating: BB | ISIN: XS1199954691 | Z-spread down by 5.2 bp to 111.6 bp, with the yield to worst at 0.7% and the bond now trading up to 102.6 cents on the dollar (1Y price range: 93.2-103.7).
  • Issuer: Esselunga SpA (Pioltello, Italy) | Coupon: 1.88% | Maturity: 25/10/2027 | Rating: BB+ | ISIN: XS1706922256 | Z-spread down by 5.7 bp to 106.6 bp, with the yield to worst at 0.6% and the bond now trading up to 106.6 cents on the dollar (1Y price range: 103.6-106.9).
  • Issuer: Orano SA (Chatillon, France) | Coupon: 2.75% | Maturity: 8/3/2028 | Rating: BB+ | ISIN: FR0013533031 | Z-spread down by 6.0 bp to 220.2 bp, with the yield to worst at 1.7% and the bond now trading up to 105.0 cents on the dollar (1Y price range: 103.2-105.5).
  • Issuer: Telecom Italia SpA (Rome, Italy) | Coupon: 5.25% | Maturity: 17/3/2055 | Rating: BB | ISIN: XS0214965963 | Z-spread down by 8.5 bp to 381.5 bp (CDS basis: -92.5bp), with the yield to worst at 3.7% and the bond now trading up to 123.8 cents on the dollar (1Y price range: 114.2-126.9).
  • Issuer: Fortune Star (BVI) Ltd (British Virgin Islands) | Coupon: 3.95% | Maturity: 2/10/2026 | Rating: BB- | ISIN: XS2357132849 | Z-spread down by 10.3 bp to 486.5 bp, with the yield to worst at 4.4% and the bond now trading up to 97.8 cents on the dollar (1Y price range: 96.7-102.1).
  • Issuer: Schaeffler AG (Herzogenaurach, Germany) | Coupon: 3.38% | Maturity: 12/10/2028 | Rating: BB+ | ISIN: DE000A3H2TA0 | Z-spread down by 21.0 bp to 166.1 bp, with the yield to worst at 1.2% and the bond now trading up to 113.1 cents on the dollar (1Y price range: 108.0-112.2).

USD BOND ISSUES

  • Hanmi Financial Corp (Banking | Los Angeles, California, United States | Rating: NR): US$110m Subordinated Note (US410495AB18), floating rate maturing on 1 September 2031, priced at 100.00, callable (10nc5)
  • Howmet Aerospace Inc (Metals/Mining | Pittsburgh, Pennsylvania, United States | Rating: BB+): US$700m Senior Note (US443201AB48), fixed rate (3.00% coupon) maturing on 15 January 2029, priced at 100.00 (original spread of 195 bp), callable (7nc7)
  • Principal Life Global Funding II (Financial - Other | Wilmington, United States | Rating: NR): US$300m Note (US74256LEQ86), fixed rate (0.75% coupon) maturing on 23 August 2024, priced at 99.94 (original spread of 33 bp), non callable
  • Principal Life Global Funding II (Financial - Other | Wilmington, Delaware, United States | Rating: NR): US$300m Note (US74256LER69), floating rate (SOFR + 38.0 bp) maturing on 23 August 2024, priced at 100.00, non callable
  • Southwest Gas Corp (Gas Utility - Local Distrib | Las Vegas, United States | Rating: A-): US$300m Senior Note (US845011AD75), fixed rate (3.18% coupon) maturing on 15 August 2051, priced at 99.98 (original spread of 128 bp), callable (30nc30)
  • Aon Corp (Financial - Other | Chicago | Rating: BBB+): US$600m Senior Note (US03740LAB80), fixed rate (2.90% coupon) maturing on 23 August 2051, priced at 99.62 (original spread of 100 bp), callable (30nc30)
  • Central International Development (BVI) Ltd (Financial - Other | British Virgin Islands | Rating: NR): US$300m Senior Note (XS2347623626), fixed rate (2.20% coupon) maturing on 25 August 2024, priced at 100.00, non callable
  • Enstar Group Ltd (Property and Casualty Insurance | Hamilton, Bermuda | Rating: BBB): US$500m Senior Note (US29359UAC36), fixed rate (3.10% coupon) maturing on 1 September 2031, priced at 99.83 (original spread of 185 bp), callable (10nc10)
  • Ping An International Financial Leasing Co Ltd (Financial - Other | Shanghai, China (Mainland) | Rating: NR): US$300m Senior Note (XS2355595443), fixed rate (2.50% coupon) maturing on 27 August 2024, priced at 100.00, non callable
  • Xingsheng Bvi Company Ltd (Financial - Other | Beijing, Beijing, China (Mainland) | Rating: NR): US$500m Bond (XS2358218936), fixed rate (1.38% coupon) maturing on 25 August 2024, priced at 99.70 (original spread of 105 bp), callable (3nc3)

EUR BOND ISSUES

  • Deutsche Pfandbriefbank AG (Banking | Garching Bei Muenchen, Germany | Rating: BBB+): €500m Hypothekenpfandbrief Jumbo (Covered Bond) (DE000A3E5K73), fixed rate (0.01% coupon) maturing on 25 August 2026, priced at 101.95 (original spread of 36 bp), non callable
  • KfW (Agency | Frankfurt, Germany | Rating: AAA): €5,000m Inhaberschuldverschreibung (DE000A3E5LU1) zero coupon maturing on 9 November 2028, priced at 103.07 (original spread of 23 bp), non callable

NEW LOANS

  • Graybar Electric Co Inc, signed a US$ 750m Revolving Credit Facility maturing on 08/18/26, to be used for general corporate purposes, working capital and capital expenditures.

NEW ISSUES IN SECURITIZED CREDIT

  • Honda Auto Receivables 2021-3 Owner Trust issued a fixed-rate ABS backed by auto receivables in 4 tranches, for a total of US$ 1,500 m. Highest-rated tranche offering a coupon of 0.20%, and the lowest-rated tranche a yield to maturity of 0.60%. Bookrunners: JP Morgan & Co Inc, Barclays Capital Group, SG Americas Securities LLC, SMBC Nikko Securities America Inc
  • BXHPP Trust 2021-FILM issued a floating-rate CMBS in 5 tranches, for a total of US$ 1,045 m. Highest-rated tranche offering a spread over the floating rate of 65bp, and the lowest-rated tranche a spread of 200bp. Bookrunners: Barclays Capital Group, Wells Fargo Securities LLC, SG Americas Securities LLC, Bank of America Merrill Lynch
  • Angel Oak Mortgage Trust 2021-4 issued a floating-rate RMBS in 5 tranches, for a total of US$ 306 m. Highest-rated tranche offering a spread over the floating rate of 65bp, and the lowest-rated tranche a spread of 245bp. Bookrunners: Goldman Sachs & Co, Morgan Stanley International Ltd, Deutsche Bank Securities Inc
  • First Investors Auto Owners Trust 2021-2 issued a fixed-rate ABS backed by auto receivables in 5 tranches, for a total of US$ 325 m. Highest-rated tranche offering a yield to maturity of 0.48%, and the lowest-rated tranche a yield to maturity of 3.14%. Bookrunners: Capital One Financial Corp, Wells Fargo Securities LLC
  • Exeter Automobile Receivables Trust 2021-3 issued a fixed-rate ABS backed by auto receivables in 7 tranches, for a total of US$ 1,297 m. Highest-rated tranche offering a yield to maturity of 0.10%, and the lowest-rated tranche a yield to maturity of 3.04%. Bookrunners: Barclays Capital Group, Wells Fargo Securities LLC
  • Ll Abs Trust 2021-1 issued a fixed-rate ABS backed by consumer loan in 3 tranches, for a total of US$ 198 m. Highest-rated tranche offering a yield to maturity of 1.07%, and the lowest-rated tranche a yield to maturity of 3.54%. Bookrunners: Credit Suisse, Truist Securities Inc