Credit

US Credit Up With Risk-On Rebound Across Asset Classes; CDX.NA.HY 5Y Mid Spread Down 13bp Since The Beginning Of The Week

Tighter cash spreads also brought on a good deal of issuance today, with the largest offerings coming from Union Pacific ($3.5bn in 4 tranches) and Aptiv Plc ($2.5bn in 3 tranches)

Published ET

Short-Term Cash Yields At Highs After Repricing Of Front End Rates | Source: Credit Suisse

Short-Term Cash Yields At Highs After Repricing Of Front End Rates | Source: Credit Suisse


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QUICK SUMMARY

  • The iBoxx USD Liquid Investment Grade Total Return Index was up 0.205% today (Month-to-date: -1.36%; Year-to-date: -5.13%)
  • The iBoxx USD Liquid High Yield Total Return Index was up 0.349% today (Month-to-date: -0.02%; Year-to-date: -2.88%)
  • ICE BofA US Corporate Index (Investment Grade) spread to worst down -1.0 bp, now at 106.0 bp (YTD change: +11.0 bp)
  • ICE BofA US High Yield Index spread to worst down -7.0 bp, now at 368.0 bp (YTD change: +38.0 bp)
  • S&P/LSTA U.S. Leveraged Loan 100 Index unchanged (YTD total return: +0.4%)

US CORPORATE OPTION-ADJUSTED SPREAD (OAS) BY RATING

  • AAA down by -1 bp at 60 bp
  • AA down by -1 bp at 69 bp
  • A down by -1 bp at 88 bp
  • BBB down by -1 bp at 133 bp
  • BB down by -7 bp at 251 bp
  • B down by -10 bp at 377 bp
  • CCC down by -11 bp at 714 bp

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

ICE BofAML Single-Bs & CCCs OAS | Sources: ϕpost, Refinitiv dataICE BofAML US Corporate Spreads By Rating | Sources: ϕpost, Refinitiv data

CDS INDICES (mid-spreads)

  • Markit CDX.NA.IG 5Y down 1.2 bp, now at 101bp (YTD change: +11.9bp)
  • Markit CDX.NA.HY 5Y down 9.0 bp, now at 341bp (YTD change: +49.1bp)
  • Markit iTRAXX Europe down 1.5 bp, now at 62bp (YTD change: +14.6bp)
  • Markit iTRAXX Japan down 0.9 bp, now at 53bp (YTD change: +7.0bp)
  • Markit iTRAXX Asia Ex-Japan down 2.9 bp, now at 94bp (YTD change: +14.8bp)
CDX NA IG & HY Credit Indices Mid Spreads | Sources: ϕpost, Refinitiv dataiTRAXX Credit Indices Mid Spreads | Sources: ϕpost, Refinitiv data

USD CDS SINGLE NAMES - LARGEST MOVES IN THE PAST WEEK

  • Transocean Inc (Country: KY; rated: Caa3): down 71.6 bp to 1,828.8bp (1Y range: 941-2,047bp)
  • American Airlines Group Inc (Country: US; rated: B2): down 71.2 bp to 754.5bp (1Y range: 596-1,074bp)
  • Carnival Corp (Country: US; rated: LGD5 - 72%): down 47.8 bp to 432.3bp (1Y range: 291-544bp)
  • Royal Caribbean Cruises Ltd (Country: US; rated: LGD4 - 59%): down 41.4 bp to 368.6bp (1Y range: 299-651bp)
  • Genworth Holdings Inc (Country: US; rated: B2): down 18.9 bp to 372.0bp (1Y range: 335-667bp)
  • Beazer Homes USA Inc (Country: US; rated: B2): up 16.8 bp to 365.0bp (1Y range: 241-388bp)
  • K Hovnanian Enterprises Inc (Country: US; rated: Caa3): up 17.0 bp to 719.4bp (1Y range: 606-966bp)
  • Gap Inc (Country: US; rated: WR): up 21.0 bp to 298.3bp (1Y range: 132-298bp)
  • DISH DBS Corp (Country: US; rated: B2): up 23.3 bp to 545.1bp (1Y range: 317-562bp)
  • Radian Group Inc (Country: US; rated: BBB-): up 36.3 bp to 250.0bp (1Y range: 152-257bp)
  • Tegna Inc (Country: US; rated: Ba3): up 37.2 bp to 436.3bp (1Y range: 148-436bp)
  • Interval Acquisition Corp (Country: US; rated: WR): up 41.3 bp to 516.9bp (1Y range: 329-517bp)
  • Rite Aid Corp (Country: US; rated: B3): up 83.8 bp to 1,204.6bp (1Y range: 497-1,205bp)

EURO CDS SINGLE NAMES - LARGEST MOVES IN THE PAST WEEK

  • TUI AG (Country: DE; rated: B3-PD): down 20.5 bp to 626.8bp (1Y range: 607-946bp)
  • Unilabs SubHolding AB (publ) (Country: SE; rated: B2): up 12.6 bp to 147.3bp (1Y range: -147bp)
  • CMA CGM SA (Country: FR; rated: Ba3): up 13.1 bp to 352.2bp (1Y range: 259-476bp)
  • Leonardo SpA (Country: IT; rated: WD): up 13.3 bp to 183.9bp (1Y range: 125-207bp)
  • Atlantia SpA (Country: IT; rated: Ba2): up 13.8 bp to 142.9bp (1Y range: 97-188bp)
  • Marks and Spencer PLC (Country: GB; rated: Ba1): up 19.6 bp to 207.5bp (1Y range: 139-235bp)
  • Casino Guichard Perrachon SA (Country: FR; rated: WR): up 21.5 bp to 797.6bp (1Y range: 464-891bp)
  • Monitchem Holdco 3 SA (Country: LU; rated: B2): up 21.5 bp to 232.9bp (1Y range: 186-309bp)
  • thyssenkrupp AG (Country: DE; rated: B1): up 24.7 bp to 278.3bp (1Y range: 205-300bp)
  • Stena AB (Country: SE; rated: B2-PD): up 40.3 bp to 482.8bp (1Y range: 401-728bp)
  • Banca Monte dei Paschi di Siena SpA (Country: IT; rated: NP): up 45.0 bp to 347.6bp (1Y range: 145-348bp)
  • Novafives SAS (Country: FR; rated: Caa1): up 68.6 bp to 852.8bp (1Y range: 618-926bp)
  • Boparan Finance PLC (Country: GB; rated: B3): up 73.9 bp to 1,398.6bp (1Y range: 610-1,565bp)

SELECTED RECENT USD BOND ISSUES

  • Boardwalk Pipelines LP (Gas Utility - Pipelines | Owensboro, United States | Rating: BBB): US$500m Senior Note (US096630AJ70), fixed rate (3.60% coupon) maturing on 1 September 2032, priced at 99.90 (original spread of 168 bp), callable (11nc10)
  • Federal Farm Credit Banks Funding Corp (Agency | Jersey City, United States | Rating: AA+): US$110m Bond (US3133ENNY22), fixed rate (1.75% coupon) maturing on 17 February 2026, priced at 100.00 (original spread of -7 bp), non callable
  • Federal Farm Credit Banks Funding Corp (Agency | Jersey City, United States | Rating: AA+): US$200m Bond (US3133ENNS53), fixed rate (1.80% coupon) maturing on 16 February 2027, priced at 100.00 (original spread of -2 bp), non callable
  • Federal Farm Credit Banks Funding Corp (Agency | Jersey City, United States | Rating: AA+): US$650m Bond (US3133ENNW65), floating rate (SOFR + 4.5 bp) maturing on 15 February 2024, priced at 100.00, non callable
  • Federal Farm Credit Banks Funding Corp (Agency | Jersey City, United States | Rating: AA+): US$140m Bond (US3133ENNX49), fixed rate (1.67% coupon) maturing on 14 February 2025, priced at 100.00 (original spread of 30 bp), callable (3nc2)
  • Harley-Davidson Inc (Automotive Manufacturer | Milwaukee, United States | Rating: BBB-): US$500m Senior Note (US41283LBA26), fixed rate (3.05% coupon) maturing on 14 February 2027, priced at 99.78 (original spread of 130 bp), callable (5nc5)
  • Starbucks Corp (Restaurants | Seattle, Washington, United States | Rating: BBB+): US$500m Senior Note (US855244BB41), floating rate (SOFR + 42.0 bp) maturing on 14 February 2024, priced at 100.00, callable (2nc1)
  • Starbucks Corp (Restaurants | Seattle, Washington, United States | Rating: BBB+): US$1,000m Senior Note (US855244BC24), fixed rate (3.00% coupon) maturing on 14 February 2032, priced at 99.81 (original spread of 110 bp), callable (10nc10)
  • Union Pacific Corp (Railroads | Omaha, United States | Rating: A-): US$500m Senior Note (US907818GA00), fixed rate (3.85% coupon) maturing on 14 February 2072, priced at 99.74 (original spread of 160 bp), callable (50nc50)
  • Union Pacific Corp (Railroads | Omaha, United States | Rating: A-): US$1,250m Senior Note (US907818FX12), fixed rate (2.80% coupon) maturing on 14 February 2032, priced at 99.59 (original spread of 90 bp), callable (10nc10)
  • Union Pacific Corp (Railroads | Omaha, United States | Rating: A-): US$500m Senior Note (US907818FY94), fixed rate (3.38% coupon) maturing on 14 February 2042, priced at 99.87 (original spread of 107 bp), callable (20nc20)
  • Union Pacific Corp (Railroads | Omaha, United States | Rating: A-): US$1,250m Senior Note (US907818FZ69), fixed rate (3.50% coupon) maturing on 14 February 2053, priced at 99.77 (original spread of 125 bp), callable (31nc31)
  • ANZ New Zealand Intl Ltd (London Branch) (Securities | London, Australia | Rating: NR): US$500m Senior Note (US00182EBP34), fixed rate (2.17% coupon) maturing on 18 February 2025, priced at 100.00 (original spread of 57 bp), non callable
  • ANZ New Zealand Intl Ltd (London Branch) (Securities | London, Australia | Rating: NR): US$500m Senior Note (US00182EBQ17), floating rate (SOFR + 60.0 bp) maturing on 18 February 2025, priced at 100.00, non callable
  • Aptiv PLC (Vehicle Parts | Dublin, Dublin, Ireland | Rating: BBB): US$700m Senior Note (US00217GAA13), fixed rate (2.40% coupon) maturing on 18 February 2025, priced at 100.00 (original spread of 80 bp), with a make whole call
  • Aptiv PLC (Vehicle Parts | Dublin, Dublin, Ireland | Rating: BBB): US$1,000m Senior Note (US00217GAC78), fixed rate (4.15% coupon) maturing on 1 May 2052, priced at 99.78 (original spread of 210 bp), with a make whole call
  • Aptiv PLC (Vehicle Parts | Dublin, Dublin, Ireland | Rating: BBB): US$800m Senior Note (US00217GAB95), fixed rate (3.25% coupon) maturing on 1 March 2032, priced at 99.60 (original spread of 135 bp), with a make whole call
  • Axian Telecom (Telecommunications | Rating: B+): US$420m Senior Note (XS2445185916), fixed rate (7.38% coupon) maturing on 16 February 2027, callable (5nc2)
  • Bank of China Limited (Budapest Branch) (Banking | Budapest, China (Mainland) | Rating: A+): US$300m Senior Note (XS2432530983), fixed rate (1.63% coupon) maturing on 16 February 2024, priced at 99.96 (original spread of 34 bp), non callable
  • Bank of China Ltd (Incorporated in China) (Johnnsburg Branch) (Banking | Johannesburg, China (Mainland) | Rating: A+): US$300m Bond (XS2432628522), fixed rate (1.88% coupon) maturing on 16 February 2025, priced at 99.89 (original spread of 35 bp), non callable
  • Deutsche Pfandbriefbank AG (Banking | Garching Bei Muenchen, Bayern, Germany | Rating: BBB+): US$750m Hypothekenpfandbrief (Covered Bond) (DE000A3T0YD4), fixed rate (1.88% coupon) maturing on 14 February 2025, priced at 99.74 (original spread of 35 bp), non callable
  • European Bank for Reconstruction and Development (Supranational | London, United Kingdom | Rating: AAA): US$800m Senior Note (US29874QEU40), floating rate (SOFR + 30.0 bp) maturing on 16 February 2029, priced at 100.00, non callable
  • Japan Bank for International Cooperation (Agency | Chiyoda-Ku, Japan | Rating: A+): US$1,250m Bond (US471048CQ96), fixed rate (2.13% coupon) maturing on 16 February 2029, priced at 99.79 (original spread of 25 bp), non callable
  • Nationwide Building Society (Financial - Other | Swindon, United Kingdom | Rating: A): US$300m Note (US63861VAF40), fixed rate (2.97% coupon) maturing on 16 February 2028, priced at 100.00 (original spread of 117 bp), callable (6nc5)
  • Nationwide Building Society (Financial - Other | Swindon, United Kingdom | Rating: A): US$750m Note (US63861VAG23), floating rate (SOFR + 129.0 bp) maturing on 16 February 2028, priced at 100.00, callable (6nc5)
  • Studio City Co Ltd (Service - Other | Hong Kong | Rating: B+): US$350m Note (US86400GAC33), fixed rate (7.00% coupon) maturing on 15 February 2027, priced at 100.00 (original spread of 502 bp), callable (5nc2)

SELECTED RECENT EUR BOND ISSUES

  • Alfa Laval Treasury International AB (publ) (Financial - Other | Lund, Skane, Sweden | Rating: NR): €300m Senior Note (XS2444286145), fixed rate (1.38% coupon) maturing on 18 February 2029, priced at 99.91 (original spread of 130 bp), callable (7nc7)
  • Alfa Laval Treasury International AB (publ) (Financial - Other | Lund, Skane, Sweden | Rating: NR): €300m Senior Note (XS2444281260), fixed rate (0.88% coupon) maturing on 18 February 2026, priced at 99.63 (original spread of 105 bp), callable (4nc4)
  • AXA Bank Europe SCF SA (Banking | Fontenay-Sous-Bois, Belgium | Rating: NR): €500m Covered Bond (Other) (FR0014008E08), fixed rate (0.63% coupon) maturing on 16 February 2028, priced at 99.93 (original spread of 59 bp), non callable
  • BOI Finance BV (Financial - Other | Rating: B): €700m Senior Note (XS2348767323), fixed rate (7.50% coupon) maturing on 16 February 2027, priced at 100.00, non callable
  • Caisse Amortissement de la Dette Sociale (Agency | Paris, France | Rating: AA): €2,000m Bond (FR0014008E81), fixed rate (0.60% coupon) maturing on 25 November 2029, priced at 99.74 (original spread of 18 bp), non callable
  • ING Groep NV (Banking | Amsterdam, Noord-Holland, Netherlands | Rating: A-): €1,500m Senior Note (XS2443920751), floating rate maturing on 16 February 2031, priced at 99.48 (original spread of 169 bp), non callable
  • ING Groep NV (Banking | Amsterdam, Noord-Holland, Netherlands | Rating: A-): €1,500m Senior Note (XS2443920249), floating rate maturing on 16 February 2027, priced at 99.66 (original spread of 140 bp), callable (5nc4)
  • Nordea Bank Abp (Banking | Helsinki, Etela-Suomen, Finland | Rating: AA-): €1,000m Note (XS2443893255), fixed rate (1.13% coupon) maturing on 16 February 2027, priced at 99.88 (original spread of 112 bp), non callable

NEW LOANS

  • VICI Properties Inc (BB), signed a US$ 1,000m Delayed Draw Term Loan, to be used for general corporate purposes. It matures on 03/31/25 and initial pricing is set at Term SOFR +85bp
  • VICI Properties Inc (BB), signed a US$ 2,500m Revolving Credit Facility, to be used for general corporate purposes. It matures on 03/31/26 and initial pricing is set at Term SOFR +77.5bp
  • Press Ganey Holdings Inc (B), signed a US$ 400m Term Loan B maturing on 07/25/26, to be used for acquisition financing.
  • Laureate Education Inc (CCC+), signed a US$ 500m Term Loan B, to be used for proceeds to shareholders.
  • PT Astra Sedaya Finance, signed a US$ 400m Revolving Credit / Term Loan maturing on 02/09/25, to be used for general corporate purposes.
  • Upc-Ac Energy Solar Asia Pte, signed a US$ 165m Revolving Credit / Term Loan maturing on 02/09/42, to be used for project finance.

NEW ISSUES IN SECURITIZED CREDIT

  • Saluda Grade Fund Trust 2022-Sg2 issued a fixed-rate ABS backed by business cashflow in 2 tranches, for a total of US$ 175 m. Highest-rated tranche offering a yield to maturity of 5.00%, and the lowest-rated tranche a yield to maturity of 10.00%. Bookrunners: Jefferies & Co Inc
  • Sce Recovery Funding LLC 2022-A issued a fixed-rate ABS backed by certificates in 3 tranches, for a total of US$ 533 m. Highest-rated tranche offering a yield to maturity of 1.98%, and the lowest-rated tranche a yield to maturity of 3.24%. Bookrunners: Barclays Capital Group, RBC Capital Markets
  • Angel Oak Mortgage Trust 2022-1 issued a floating-rate RMBS in 6 tranches, for a total of US$ 520 m. Highest-rated tranche offering a spread over the floating rate of 100bp, and the lowest-rated tranche a spread of 100bp. Bookrunners: Goldman Sachs & Co
  • Morgan Stanley International Ltd, Barclays Capital Group, Deutsche Bank Securities Inc
  • Mercury Financial Credit Card Master Trust Series 2022-1 issued a fixed-rate ABS backed by receivables in 3 tranches, for a total of US$ 445 m. Highest-rated tranche offering a yield to maturity of 2.77%, and the lowest-rated tranche a yield to maturity of 5.39%. Bookrunners: Credit Suisse, Guggenheim Securities LLC
  • Trtx 2022-Fl5 Ltd issued a floating-rate CLO in 6 tranches, for a total of US$ 907 m. Highest-rated tranche offering a spread over the floating rate of 165bp, and the lowest-rated tranche a spread of 435bp. Bookrunners: Goldman Sachs & Co, Morgan Stanley International Ltd, JP Morgan & Co Inc, Wells Fargo Securities LLC
  • Freddie Mac Wi-K141 issued a fixed-rate Agency CMBS in 2 tranches, for a total of US$ 830 m. Highest-rated tranche offering a yield to maturity of 2.33%, and the lowest-rated tranche a yield to maturity of 2.33%. Bookrunners: JP Morgan & Co Inc, Wells Fargo Securities LLC
  • Oxford Finance Funding Trust 2022-1 issued a fixed-rate ABS backed by certificates in 2 tranches, for a total of US$ 415 m. Highest-rated tranche offering a yield to maturity of 3.60%, and the lowest-rated tranche a yield to maturity of 4.10%. Bookrunners: Barclays Capital Group, KeyBanc Capital Markets Inc, MUFG Securities Americas Inc
  • World Omni Receivables Trust 2022-A issued a fixed-rate ABS backed by auto receivables in 6 tranches, for a total of US$ 926 m. Highest-rated tranche offering a yield to maturity of 0.40%, and the lowest-rated tranche a yield to maturity of 2.55%. Bookrunners: JP Morgan & Co Inc, Barclays Capital Group, Mizuho Securities USA Inc, Truist Securities Inc