Credit

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

Credit

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

Credit

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)

Credit

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

Credit

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)

Credit

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

Credit

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

Credit

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)

Credit

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)

Credit

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)

Credit

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

Credit

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)

Credit

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

Credit

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)

Credit

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

Credit

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

Credit

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

Credit

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

Credit

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)

Credit

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)

Credit

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

Credit

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

Credit

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

Credit

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

Credit

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

Credit

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

Credit

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%)

Credit

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

Credit

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

Credit

Meaningful Spread Compression Across The US Credit Complex This Week, Though Some Commentators Expect Widening Next Year Towards 200bp For IG, 800bp For HY

Weekly volumes of US$ corporate bond issuance (IFR Markets data): 31 tranches for US$45.8bn in IG (2022 YTD volume $805.5bn vs 2021 YTD $909.0bn) and 2 tranches for US$760m in HY (2022 YTD volume $68.6bn vs 2021 YTD $462.7bn)