Credit

USD Bonds Take A Tumble On Wider Spreads And Higher Rates

A good amount of corporate issuance today despite volatile market conditions, with the largest offering courtesy of Analog Devices (US$ 4bn in 5 tranches)

Published ET

YTD High Yield Issuance | Source: Credit Suisse

YTD High Yield Issuance | Source: Credit Suisse

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QUICK SUMMARY

  • S&P 500 Bond Index was down -0.52% today, with investment grade down -0.54% and high yield down -0.42% (YTD total return: -0.87%)
  • The iBoxx USD Liquid Investment Grade Total Return Index was down -0.82% today (Month-to-date: -1.19%; Year-to-date: -1.67%)
  • The iBoxx USD Liquid High Yield Total Return Index was down -0.28% today (Month-to-date: -0.22%; Year-to-date: 3.67%)
  • ICE BofA US Corporate Index (Investment Grade) spread to worst up 1.0 bp, now at 83.0 bp (YTD change: -15.0 bp)
  • ICE BofA US High Yield Index spread to worst up 7.0 bp, now at 329.0 bp (YTD change: -61.0 bp)
  • S&P/LSTA U.S. Leveraged Loan 100 Index up 0.01% today (YTD total return: +3.1%)
  • New issues: US$ 18.0bn in dollars and € 5.5bn in euros

US CORPORATE OPTION-ADJUSTED SPREAD (OAS) BY RATING

  • AAA up by 2 bp at 46 bp
  • AA unchanged at 54 bp
  • A up by 1 bp at 70 bp
  • BBB up by 1 bp at 108 bp
  • BB up by 7 bp at 216 bp
  • B up by 6 bp at 362 bp
  • CCC up by 7 bp at 641 bp

ICE BofAML US Corporate Spreads By Rating | Sources: phipost.com, FactSet data

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

CDS INDICES (mid-spreads)

  • Markit CDX.NA.IG 5Y up 1.3 bp, now at 91bp (YTD change: +0.6bp)
  • Markit CDX.NA.HY 5Y up 6.5 bp, now at 298bp (YTD change: +5.2bp)
  • Markit iTRAXX Europe up 1.0 bp, now at 50bp (YTD change: +2.0bp)
  • Markit iTRAXX Japan down 0.1 bp, now at 47bp (YTD change: -4.7bp)
  • Markit iTRAXX Asia Ex-Japan up 0.1 bp, now at 87bp (YTD change: +29.2bp)
CDX.NA IG & HY Credit Indices Mid Spreads | Sources: ϕpost, Refinitiv dataiTRAXX Credit Indices Mid Spreads | Sources: ϕpost, Refinitiv data

LARGEST USD CORPORATE CDS MOVES IN THE PAST WEEK

  • Transocean Inc (Country: KY; rated: Caa3): down 134.1 bp to 1,704.7bp (1Y range: 941-7,695bp)
  • Genworth Holdings Inc (Country: US; rated: B2): down 44.7 bp to 485.0bp (1Y range: 447-681bp)
  • Office Depot Inc (Country: US; rated: WR): down 35.8 bp to 500.2bp (1Y range: 500-583bp)
  • Carnival Corp (Country: US; rated: LGD5 - 72%): down 30.3 bp to 379.4bp (1Y range: 291-1,214bp)
  • Murphy Oil Corp (Country: US; rated: Ba3): down 26.1 bp to 335.0bp (1Y range: 280-763bp)
  • Royal Caribbean Cruises Ltd (Country: US; rated: LGD4 - 59%): down 21.5 bp to 351.7bp (1Y range: 318-1,246bp)
  • Staples Inc (Country: US; rated: B2): down 17.9 bp to 992.6bp (1Y range: 652-1,309bp)
  • Gap Inc (Country: US; rated: Ba2): up 15.3 bp to 184.8bp (1Y range: 132-284bp)
  • Domtar Corp (Country: US; rated: Ba2): up 22.7 bp to 412.8bp (1Y range: 65-413bp)
  • Beazer Homes USA Inc (Country: US; rated: B2): up 23.2 bp to 342.9bp (1Y range: 231-363bp)
  • Tegna Inc (Country: US; rated: Ba3): up 41.2 bp to 302.5bp (1Y range: 148-303bp)
  • CSC Holdings LLC (Country: US; rated: LGD3 - 30%): up 62.4 bp to 318.2bp (1Y range: -318bp)

LARGEST EURO CORPORATE CDS MOVES IN THE PAST WEEK

  • TUI AG (Country: DE; rated: LGD4 - 50%): down 27.4 bp to 700.8bp (1Y range: 609-1,799bp)
  • Air France KLM SA (Country: FR; rated: B-): down 14.0 bp to 386.5bp (1Y range: 387-1,211bp)
  • Rolls-Royce PLC (Country: GB; rated: BB-): down 10.0 bp to 203.0bp (1Y range: 198-514bp)
  • Thyssenkrupp AG (Country: DE; rated: B1): down 7.4 bp to 228.7bp (1Y range: 206-479bp)
  • Iceland Bondco PLC (Country: GB; rated: LGD3 - 46%): down 6.3 bp to 524.4bp (1Y range: 358-651bp)
  • Valeo SE (Country: FR; rated: P-3): up 6.6 bp to 134.1bp (1Y range: 110-180bp)
  • UPC Holding BV (Country: NL; rated: LGD6 - 93%): up 8.9 bp to 170.8bp (1Y range: 166-308bp)
  • Unilabs SubHolding AB (publ) (Country: SE; rated: B2): up 10.0 bp to 216.9bp (1Y range: -217bp)
  • Ladbrokes Coral Group Ltd (Country: GB; rated: WR): up 12.9 bp to 118.8bp (1Y range: 107-227bp)
  • Virgin Media Finance PLC (Country: GB; rated: WR): up 14.8 bp to 254.0bp (1Y range: 222-315bp)
  • CMA CGM SA (Country: FR; rated: Ba3): up 18.6 bp to 292.1bp (1Y range: 259-734bp)
  • Lagardere SA (Country: FR; rated: B): up 27.7 bp to 141.7bp (1Y range: 142-350bp)
  • Altice Finco SA (Country: LU; rated: Caa1): up 31.5 bp to 398.9bp (1Y range: 333-477bp)
  • Jaguar Land Rover Automotive PLC (Country: GB; rated: WD): up 35.7 bp to 441.5bp (1Y range: 339-870bp)
  • Casino Guichard Perrachon SA (Country: FR; rated: WR): up 41.9 bp to 567.9bp (1Y range: 464-1,210bp)

USD BOND ISSUES

  • Analog Devices Inc (Electronics | Wilmington, United States | Rating: A-): US$1,000m Senior Note (US032654AV70), fixed rate (2.10% coupon) maturing on 1 October 2031, priced at 99.43 (original spread of 63 bp), callable (10nc10)
  • Analog Devices Inc (Electronics | Wilmington, United States | Rating: A-): US$500m Senior Note (US032654AT25), floating rate (SOFR + 25.0 bp) maturing on 1 October 2024, priced at 100.00, non callable
  • Entergy Louisiana LLC (Utility - Other | Jefferson, United States | Rating: BBB+): US$1,000m Mortgage Bond (US29364WBK36), fixed rate (0.95% coupon) maturing on 1 October 2024, priced at 99.85 (original spread of 45 bp), callable (3nc1)
  • Federal Home Loan Banks (Agency | Washington, United States | Rating: NR): US$500m Bond (US3130APDV48), fixed rate (0.65% coupon) maturing on 7 October 2024, priced at 100.00, callable (3nc3m)
  • Healthequity Inc (Financial - Other | Draper, United States | Rating: B): US$500m Senior Note (USU3827AAA70), fixed rate (4.50% coupon) maturing on 1 October 2029, priced at 100.00 (original spread of 312 bp), callable (8nc3)
  • Life Storage LP (Real Estate Investment Trust | Williamsville, United States | Rating: BBB): US$600m Senior Note (US53227JAD63), fixed rate (2.40% coupon) maturing on 15 October 2031, priced at 99.08 (original spread of 97 bp), callable (10nc10)
  • Rockcliff Energy II LLC (Financial - Other | Houston, United States | Rating: B+): US$700m Senior Note (US77289KAA34), fixed rate (5.50% coupon) maturing on 15 October 2029, priced at 100.00 (original spread of 408 bp), callable (8nc3)
  • Sun Communities Operating LP (Financial - Other | Southfield, United States | Rating: BBB-): US$450m Senior Note (US866677AF41), fixed rate (2.30% coupon) maturing on 1 November 2028, priced at 99.83 (original spread of 100 bp), callable (7nc7)
  • Uniti Group LP (Financial - Other | Wilmington, United States | Rating: CCC): US$700m Senior Note (USU91473AB15), fixed rate (6.00% coupon) maturing on 15 January 2030, priced at 100.00 (original spread of 467 bp), callable (8nc3)
  • Asian Development Bank (Supranational | Mandaluyong, Philippines | Rating: AAA): US$3,000m Senior Note (US045167FG35), fixed rate (0.63% coupon) maturing on 8 October 2024, priced at 99.95 (original spread of 15 bp), non callable
  • Banque Federative du Credit Mutuel SA (Banking | Strasbourg, Grand Est, France | Rating: A): US$700m Note (US06675FAW77), floating rate (SOFR + 41.0 bp) maturing on 4 February 2025, priced at 100.00, non callable
  • Banque Federative du Credit Mutuel SA (Banking | Strasbourg, France | Rating: A): US$800m Note (US06675FAY34), fixed rate (1.60% coupon) maturing on 4 October 2026, priced at 100.00 (original spread of 60 bp), non callable
  • FS Luxembourg SARL (Financial - Other | Luxembourg, Brazil | Rating: NR): US$80m Bond (USL40756AD74), fixed rate (10.00% coupon) maturing on 15 December 2025, priced at 110.00, callable (4nc2)
  • Grifols Escrow Issuer SA (Financial - Other | Sant Cugat Del Valles, Spain | Rating: NR): US$705m Senior Note (US39843UAA07), fixed rate (4.75% coupon) maturing on 15 October 2028, priced at 100.00 (original spread of 344 bp), callable (7nc3)
  • NBN Co Ltd (Service - Other | North Sydney, Australia | Rating: A+): US$600m Senior Note (US62878U2C56), fixed rate (0.88% coupon) maturing on 8 October 2024, priced at 99.70 (original spread of 43 bp), with a make whole call
  • NBN Co Ltd (Service - Other | North Sydney, Australia | Rating: A+): US$700m Senior Note (US62878U2E13), fixed rate (2.50% coupon) maturing on 8 July 2032, priced at 99.70 (original spread of 100 bp), non callable
  • NBN Co Ltd (Service - Other | North Sydney, Australia | Rating: A+): US$700m Senior Note (US62878V2D12), fixed rate (1.63% coupon) maturing on 8 January 2027, priced at 99.61 (original spread of 70 bp), with a make whole call
  • Nomura International Funding Pte Ltd (Financial - Other | Singapore | Rating: NR): US$500m Unsecured Note (XS2218224710), floating rate maturing on 20 December 2026, priced at 100.00, non callable
  • Nomura International Funding Pte Ltd (Financial - Other | Singapore | Rating: NR): US$2,500m Unsecured Note (XS2218224983), floating rate maturing on 12 October 2031, priced at 100.00, non callable
  • Pershing Square Holdings Ltd (Financial - Other | Saint Peter Port, Guernsey | Rating: BBB): US$700m Senior Note (XS2392997255), fixed rate (3.25% coupon) maturing on 1 October 2031, priced at 99.67 (original spread of 175 bp), callable (10nc10)
  • Soar Wise Ltd (Financial - Other | George Town, China (Mainland) | Rating: NR): US$300m Senior Note (XS2387065134), fixed rate (1.65% coupon) maturing on 8 October 2024, priced at 99.86 (original spread of 113 bp), non callable
  • Xingcheng (BVI) Ltd (Financial - Other | Road Town, China (Mainland) | Rating: NR): US$300m Senior Note (XS2384258245), fixed rate (2.38% coupon) maturing on 8 October 2026, priced at 100.00, non callable

EUR BOND ISSUES

  • Action Logement Services SAS (Service - Other | Paris, France | Rating: AA): €1,000m Bond (FR0014005SE7), fixed rate (0.38% coupon) maturing on 5 October 2031, priced at 99.41 (original spread of 29 bp), non callable
  • Arion banki hf (Banking | Reykjavik, Iceland | Rating: BBB): €300m Covered Bond (Other) (XS2391348740), fixed rate (0.05% coupon) maturing on 5 October 2026, priced at 99.78 (original spread of 66 bp), non callable
  • Computershare Us Inc (Financial - Other | New York City, Australia | Rating: NR): €500m Senior Note (XS2393323667), fixed rate (1.13% coupon) maturing on 7 October 2031, priced at 99.06 (original spread of 141 bp), callable (10nc10)
  • Grifols Escrow Issuer SA (Financial - Other | Sant Cugat Del Valles, Spain | Rating: NR): €1,400m Senior Note (XS2393001891), fixed rate (3.88% coupon) maturing on 15 October 2028, priced at 100.00 (original spread of 425 bp), callable (7nc3)
  • Pernod Ricard SA (Beverage/Bottling | Paris, France | Rating: BBB+): €500m Bond (FR0014005SC1), fixed rate (0.13% coupon) maturing on 4 October 2029, priced at 98.28 (original spread of 69 bp), callable (8nc8)
  • Pershing Square Holdings Ltd (Financial - Other | Saint Peter Port, Guernsey | Rating: BBB): €500m Senior Note (XS2392996109), fixed rate (1.38% coupon) maturing on 1 October 2027, priced at 99.87 (original spread of 189 bp), callable (6nc6)
  • Royal Bank of Canada (Banking | Toronto, Canada | Rating: A): €1,250m Covered Bond (Other) (XS2393518910), fixed rate (0.01% coupon) maturing on 5 October 2028, priced at 99.88 (original spread of 45 bp), non callable

NEW LOANS

  • MGM Resorts International (B+), signed a US$ 2,425m Bridge Loan, to be used for acquisition financing. It matures on 10/12/22 and initial pricing is set at LIBOR +75bps
  • Mitsubishi Corp (A), signed a US$ 1,060m Revolving Credit Facility maturing on 09/30/22, to be used for refinancing and returning bank debt.
  • The IMA Financial Group Inc, signed a US$ 530m Term Loan B, to be used for general corporate purposes.
  • Conduent Business Service LLC (BB-), signed a US$ 515m Term Loan B, to be used for general corporate purposes. It matures on 10/12/28.

NEW ISSUES IN SECURITIZED CREDIT

  • Government National Mortgage Association issued a fixed-rate Agency CMBS in 2 tranches, for a total of US$ 325 m. Bookrunners: Nomura Securities New York Inc
  • Acrec 2021-Fl1 issued a floating-rate CLO in 6 tranches, for a total of US$ 721 m. Highest-rated tranche offering a spread over the floating rate of 115bp, and the lowest-rated tranche a spread of 300bp. Bookrunners: JP Morgan & Co Inc, Barclays Capital Group
  • Hono 2021-Lulu Mortgage Trust issued a floating-rate CMBS in 6 tranches, for a total of US$ 282 m. Highest-rated tranche offering a spread over the floating rate of 115bp, and the lowest-rated tranche a spread of 440bp. Bookrunners: Goldman Sachs & Co, Deutsche Bank Securities Inc
  • Deephaven Residential Mortgage Trust 2021-3 issued a fixed-rate RMBS in 6 tranches, for a total of US$ 375 m. Highest-rated tranche offering a yield to maturity of 1.19%, and the lowest-rated tranche a yield to maturity of 4.13%. Bookrunners: Credit Suisse
  • Bank 2021-Bnk36 issued a fixed-rate CMBS in 11 tranches, for a total of US$ 1,143 m. Highest-rated tranche offering a yield to maturity of 0.80%, and the lowest-rated tranche a yield to maturity of 3.16%. Bookrunners: Morgan Stanley International Ltd, Wells Fargo Securities LLC, Bank of America Merrill Lynch
  • Starwood Residential Mortgage Trust 2021-4 issued a fixed-rate RMBS in 6 tranches, for a total of US$ 452 m. Highest-rated tranche offering a yield to maturity of 1.16%, and the lowest-rated tranche a yield to maturity of 4.14%. Bookrunners: Credit Suisse, Deutsche Bank Securities Inc
  • Pearl Street Mortgage Co 2021-3 issued a fixed-rate RMBS in 3 tranches, for a total of US$ 365 m. Bookrunners: Wells Fargo Securities LLC