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USD HY-IG Cash Spreads Over 100bp Wider In Past 3 weeks While Synthetics Do Slightly Better

The IG bond primary market reopened in the US this week with 28 Tranches for $21.05bn (2023 YTD volume $375.715bn vs 2022 YTD $430.541bn, down 12.7% YoY), while high yield issuance was nonexistent for the third straight week (2023 YTD volume $39.575bn vs 2022 YTD $38.676bn, up 2% YoY)

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Wider Spreads Across The Credit Complex Driven By The Higher Likelihood Of A Credit Crunch

A quiet week for USD DCM syndicates: zero issuance in IG (2023 YTD volume $354.665bn vs 2022 YTD $392.19bn), and zero issuance in HY for the second straight week (2023 YTD volume $39.575bn vs 2022 YTD $34.876bn)

Yield vs Market Value (US$ bn) Across Fixed Income | Source: Goldman Sachs Investment Research

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Broad Widening In Spreads Across The US Credit Complex, With IG Overperforming On Duration Bid

USD IG bond issuance continued at a fast clip this week: 53 tranches for $39.275bn in IG (2023 YTD volume $354.665bn vs 2022 YTD $361.14bn), no new issuance in HY (2023 YTD volume $39.575bn vs 2022 YTD $34.076bn)

EU vs US 10Y Investment Grade CDS Indices Mid Spreads | Source: Refinitiv

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Tighter Spreads Across The USD Credit Complex, Led By Single Bs, As BBs Continued To Underperform

Strong volumes of issuance this week (IFR Markets data): 66 tranches for $48.09bn in IG (2023 YTD volume $315.69bn vs 2022 YTD $287.841bn), 11 tranches for $7bn in HY (2023 YTD volume $39.575bn vs 2022 YTD $33.875bn)

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Dealer Inventory For USD HY Bonds Estimated To Be At 12-Month High, While The CDS-Cash Basis Widened This Week

Investors' appetite for high grade USD corporate bonds remains undiminished for now: 29 tranches for US$22.525bn in IG this week (2023 YTD volume US$267.3bn vs 2022 YTD US$234.091bn), 1 tranche for US$1.1bn in HY (2023 YTD volume US$32.757bn vs 2022 YTD US$31.686bn)

ICE BofA US HY vs CDX NA HY 5Y | Source: Refinitiv

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With Default Rates Still At Very Low Levels, Distressed USD HY Is Overperforming US Equities YTD

A strong week for investment grade USD bond issuance: 42 tranches for $54.175bn in IG (2023 YTD volume $245.075bn vs 2022 YTD $216.041bn), no new issuance in HY (2023 YTD volume $31.475bn vs 2022 YTD $30.686bn)

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Despite Broadly Wider Spreads, The Compression In US High Yield Continues With CCC-BB Back To August Level

After a good week, YTD volumes of corporate USD bond issuance are now ahead of last year: 33 tranches for $33.7bn in IG (2023 YTD volume $190.9bn vs 2022 YTD $184.465bn), 12 tranches for $8.425bn in HY (2023 YTD 38 Tranches for $31.475bn vs 2022 YTD $30.686bn)

ICE BofAML US HY CCC - BB Spread | Source: Refinitiv

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Tighter Spreads Across US Credit This Week, With The CDX HY Trailing HY Cash Performance YTD

Another solid week for US$ corporate bond issuance: 24 tranches for $21.05bn in IG (2023 YTD volume $157.2bn vs 2022 YTD $168.89bn), 5 tranches for $7.6bn in HY (2023 YTD volume $23.05bn vs 2022 YTD $27.936bn)

CDX.NA.HY 5Y Bid Spread vs ICE BofAML HY Cash OAS | Source: Refinitiv

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Risk Appetite Brings On HY-IG Spreads Compression; HY Distressed Spreads 350bp Tighter YTD

Weekly volumes of new USD corporate bonds priced (IFR Markets data): 26 tranches for $26bn in IG (2023 YTD volume $136.15bn vs 2022 YTD $148.39bn), 5 tranches for $3.75bn in HY (2023 YTD volume $15.45bn vs 2022 YTD $22.36bn)

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US High Grade Credit Overperformed Last Week, With BBBs Spreads Tighter And BBs Wider

Decent volumes of USD HY corporate bond issuance this week after a slow start to the year: 11 tranches for $16.05bn in IG (2023 YTD volume $110.15bn vs 2022 YTD $145.24bn), 9 Tranches for $6.7bn in HY (2023 YTD volume $11.7bn vs 2022 YTD $16.085bn)

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Limited Upside In Rates And Attractive Carry Have Pushed Flows Into USD Credit, Though Spreads Are Likely To Widen This Year

Solid start for investment grade issuance: 106 tranches for $94.1bn in IG in the first couple of weeks of 2023 (vs 2022 YTD $107.1bn), 7 tranches for $5bn in HY (vs 2022 YTD $11.815bn)

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2022 Was A Pretty Grim Year Across The Credit Complex, With Most Of The Damage Coming From Rates

Corporate bond issuance is pretty much done for the year: just 1 tranche for $3bn in IG this week (2022 YTD volume $1.211tn vs 2021 YTD $1.487tn, down 18.6% YoY) and no new pricing in HY (2022 YTD volume $101.971bn vs 2021 YTD $461.811bn, down -77.9% YoY)

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

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US CDS Indices See Spreads Widen Ahead Of FOMC, While Cash Held Up Better With Low Supply Helping

Very little issuance of new corporate bonds this week: 6 tranches for $4.25bn in IG (2022 YTD volume $1.208tn vs 2021 YTD $1.487tn, down 18.8% YoY), 3 tranches for $2.26bn in HY (2022 YTD volume $101.971bn vs 2021 YTD $459.461bn, down 77.8% YoY)

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After November's Huge Rebound, US Credit Is Looking Much Less Attractive Into The December FOMC

US corporate bond issuance is slowing but still decent in IG (IFR Markets data): 27 tranches for $22.15bn in IG (2022 YTD volume $1.204tn vs 2021 YTD $1.447tn, down 16.8% YoY) and no new print in HY (2022 YTD volume $97.701bn vs 2021 YTD $452.631bn, down 78.4% YoY)

Palmer Square CLO Indices | Sources: ϕpost, Refinitiv data

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Significant Tightening In Spreads Brought Positive Performance Across US$ Credit This Week Despite Higher Rates

Good volume of corporate issuance at the tail end of 3Q22 earnings season: 31 tranches for $24.78bn in IG (2022 YTD volume $1.176tn vs 2021 YTD $1.414tn), 2 tranches for $1.9bn in HY (2022 YTD volume $99.701bn vs 2021 YTD $451.381bn)

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Mixed Picture In US Credit, With HY-IG CDS Spreads Differentials Compressing Markedly Post CPI, While HY Cash Performance Lagged

Solid week of bond issuance for US corporates (IFR Markets data): 46 tranches for $45.45bn in IG (2022 YTD volume $1.151tn vs 2021 YTD $1.357tn, down 15.2% YoY), 5 tranches for $6.2bn in HY (2022 YTD volume $97.801bn vs 2021 YTD $442.541bn, down 77.9% YoY)

HY-IG Spreads Differentials | Sources: phipost.com, Refinitiv data

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Mixed Spreads Across The US Credit Complex This Week, But HY Synthetics Overperformed Equities

Light volume of issuance for US corporate bonds this week: 17 tranches for $12.45bn in IG (2022 YTD volume $1.105tn vs 2021 YTD $1.332tn, down 17% YoY), and a $1.5bn tranche (from Ford Motors) was the lone issue in HY (2022 YTD volume $91.591bn vs 2021 YTD $428.656bn, down 78.6% YoY)

S&P 500 Price Index vs. CDX NA HY 5Y | Source: Refinitiv

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Risk-On Rebound Across The US Credit Complex, With A Significant Compression In Spreads

Solid week of issuance for USD IG corporate bonds, with $36.5bn raised in 33 tranches (2022 YTD volume $1.093tn vs 2021 YTD $1.311tn, down 16.6% YoY), while there was no new issuance in HY (2022 YTD volume $90.091bn vs 2021 YTD $420.331bn, down 78.6% YoY)

USD Cash Spreads Tightening This Week | Sources: ϕpost, FactSet data

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Positive Week For US HY Credit, Though Cash Spreads Widened On Friday, Parting Ways With Equities Into The Weekend

US$ IG corporate issuance rebounded this week as 3Q earnings started to roll in: 24 tranches for $20.25bn in IG (2022 YTD volume $1.056tn, down 18% vs 2021 YTD), and 1 tranche for $2.03bn in HY (2022 YTD volume $90.091bn, down 78.3% vs 2021 YTD)

iBOXX USD Liquid Bonds Total Returns | Sources: ϕpost, Refinitiv data

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Poor Performance Across The US Credit Complex, With A Continued Rise In Rates And Wider Spreads

Very little activity in the USD primary corporate bond market this week: 3 tranches for $6.5bn in IG (2022 YTD volume $1.036trn vs 2021 YTD $1.232trn), 3 tranches for $1.06bn in HY (2022 YTD volume $88.061bn vs 2021 YTD $405.441bn)

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Decent Rebound For US Credit This Week, With High Yield Overperforming Equities On A Volatility-Adjusted Basis

Continued rates volatility kept volumes of corporate bond issuance low this week: 17 tranches for $13.55bn in IG (2022 YTD volume $1.030trn vs 2021 YTD $1.217trn), 1 tranche for $625m in HY (2022 YTD volume $87.001bn vs 2021 YTD $398.726bn)

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Tough Month Across The US$ Credit Complex, But HY Spreads Still Have A Lot Of Room To Widen Into A Recession

Rates volatility almost completely shut down the US corporate bond primary market this week: only 6 tranches for $2.5bn in IG (2022 YTD volume $1.016tn vs 2021 YTD $1.190tn) and no new issue in HY

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US IG Has Repriced More Violently Than HY And Currently Looks More Attractive On A Relative Basis

Very little volume of issuance for US$ corporate bonds this week (IFR Markets data): 8 tranches for $6.1bn in IG (2022 YTD volume $1.014tn vs 2021 YTD $1.163tn), 3 tranches for $6bn in HY (2022 YTD volume $86.376bn vs 2021 YTD $372.469bn)

CDX NA IG & HY 5Y CDS Indices Implied Default Probability | Sources: ϕpost, Refinitiv data

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US High Yield Credit Performed Poorly This Week, With A Significant Decompression In HY-IG Spreads

Reasonable amount of USD corporate bond issuance over the past week (IFR Markets data): 25 tranches for $18.85bn in IG (2022 YTD volume $1.008tn vs 2021 YTD $1.147tn), 1 tranche for $500m in HY (2022 YTD volume $80.376bn vs 2021 YTD $360.239bn)

ICE BofAML US Corporate Single Bs - Single As Spread | Source: Refinitiv

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Risk Appetite Returns On Short-Term Volatility Fall: US HY Cash OAS 49bp Tighter This Week

Big week of US$ bond issuance for corporates, led by Walmart and Lowe's: 63 tranches for $53.1bn in IG (2022 YTD volume $989.2bn vs 2021 YTD $1.1tn), 4 tranches for $2.5bn in HY (2022 YTD volume $79.9bn vs 2021 YTD $350.0bn)

S&P 500 and CDX HY 5Y Moving In Tandem | Source: Refinitiv

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September Starts Much Like August Ended Across The US Credit Complex: Duration Selloff, Coupled With Wider Spreads

Very little US$ corporate issuance in the first days of September, but next week should see a flurry of deals, with around $50bn expected to price in IG alone

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Wider Spreads Across US High Yield After Nice Summer Bounce; Single Bs OAS Up 23bp Over The Past Week

Very limited volume of issuance in US$ corporate bonds this week (IFR Markets data): 3 tranches for $1.3bn in IG (2022 YTD volume $936.1bn vs 2021 YTD $1.02trn) and no new pricing in HY

Asia US$ High Yield Looks Expensive Compared to US HY | Source: Wells Fargo Securities

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High Yield Spread Compression Continued This Week Across The Credit Complex, Helped By Very Low YTD Issuance

Reasonable volume of US$ investment grade bonds this week: 33 tranches for $30.6bn in IG (2022 YTD volume $912.6bn vs 2021 YTD $1,011bn, down 9.8%) and 2 tranches for $900m in HY (2022 YTD volume $72.2bn vs 2021 YTD $341.3bn, down 78.8%)

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A Bifurcated Week For US Corporate Credit, As IG Suffers From Duration Selloff While HY Does Better On Spreads Compression

Good week for US$ IG bond issuance, led by Facebook's first offering: 53 tranches for $57.85bn in IG (2022 YTD volume $881.9bn vs 2021 YTD $969.8bn), 2 tranches for $2bn in HY (2022 YTD volume $71.3bn vs 2021 YTD $325.8bn)

YTD Changes In Duration By Rating | Sources: ϕpost, Refinitiv data

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July Was A Good Month For US$ Credit: IG Liquid Bonds Up 4.2%, HY Up 6.8%

Weekly issuance of US$ corporate bonds (IFR Markets data): 17 tranches for $18.6bn in IG (2022 YTD volume $824.09bn vs 2021 YTD $933.973bn) and a single $725m tranche in HY (2022 YTD volume $68.576bn vs 2021 YTD $462.661bn)

iBOXX US$ Liquid Bonds Total Return Indices | Sources: ϕpost, Refinitiv data