skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Tuesday's primary market highlights

** With market participation thinned due to the US Independence Day holiday, it was another measured session for the European primary market on Tuesday. In total, EUR7bn priced in the single currency although EUR6bn of this came from just the one borrower (more on EFSF below). Elsewhere, Dexia Credit Local and AA Bond Co issued a combined GBP1.25bn of sterling paper. For a breakdown of Tuesday's EUR trades, see IGM's DAILY EUR NICS & BOOKS

** EFSF spearheaded supply with the issuer accounting for 85% of the day's overall total. The SSA issuer took a two-pronged approach to pricing, refreshing its EUR curve with EUR2.5bn 8yr and EUR3.5bn 31yr tranches which printed at m/s -11 and m/s +26 respectively. Demand for the issues finished up at a combined EUR10.35bn with the final NIC seen at around 2.5bps on the 8yr and a larger 3.5bps on the 31yr. See earlier IGM SSA PREVIEW for relative value analysis

** After conducting a roadshow last week, Kommunalkredit Austria AG hit the screens Tuesday with a debut EUR300m 4yr Social Covered issue. The deal landed at m/s +38 having been squeezed in from initial guidance of m/s +low 40s with books at over EUR450m. For more including the official comps list for the trade see IGM COVERED SNAPSHOT

** Away from the covered arena, the only other FIG deal on the day came via Muenchener Hypothekenbank eG which extended its senior curve with a EUR250m 7yr that was well over twice covered while secondary spreads generally tightened in thin market conditions. See IGM's FIG SNAPSHOT

** The corporate market was devoid of EUR issuance but there was some Sterling paper courtesy of AA Bond Co which printed a GBP250m 6yr secured bond at UKT +205, from a +225 area IPTs starting point on the back of books around GBP1bn. Elsewhere, China National Chemical Corporation hired leads for a roadshow and a potential USD Reg S line. See IGM CORP SNAPSHOT

** The ECB released its CSPP update on Tuesday, with the central bank revealing it held EUR96.62bn of corporate securities as of 30th June, with the latest data pointing to an implied monthly purchase rate of EUR7.38bn. See the IGM CSPP REVIEW for more

Wednesday's potential supply

At the time or writing there were no confirmed deals for Wednesday although with US market participants back we may see some opportunistic supply. Several issuers are in the pipeline as follows:

** Annington Funding plc (BBB/BBB) recently held a roadshow via Barclays and JP Morgan ahead of a potential multi-tranche Sterling and/or Euro transaction, with short, intermediate and long tenors

** Unrated Italian biopharmaceutical company Kedrion SpA hit the road last Thursday via Banca IMI, Mediobanca and Natixis ahead of an expected min EUR300m 5yr line

Lietuvos Energija UAB (BBB+), is eyeing an expected EUR200m 7-10yr Green Bond via BNP Paribas and SEB after the conclusion of a roadshow which began last Thursday

** Kyobo Life Insurance Co (A1/A+) may launch a new USD 144A/RegS subordinated capital benchmark issue after holding a series of investor meetings via JP Morgan, Citi, Nomura, and UBS

Tuesday's broader market developments

** EU risk assets trade underwater following negative handover from Asia overnight following reports North Korea conducted a ballistic missile test

** European financials continue outperforming though - SX7P touches fresh 7-week high

** Riksbank removes easing bias, holds repo benchmark rate at -0.5%

** German curve generally underpinned by risk-off price action in equities. although 30yr underperforms as market absorbs ultra long supply from EFSF with 30yr German yield up as much as 26bps from recent low of 1.017% on June 26th

** Brent was set to post marginal gain Tuesday, having gained 10.39% over the past 8 sessions in a row. Gold currently on course to close in the black for the first time in three days having hit its lowest level since 11th May on Monday

** iTraxx indices sea-sawed, Main and Crossover currently both on course to tighten a tad with no major breakthrough in levels

Market snapshot (14.59 BST)

SXXP -0.09% / SX7P +0.11%

GER 2yr -2.4bps at -0.625% / 10yr -1.1bp at 0.463%

Brent +0.06% at USD49.71

iTraxx Main -0.3 at 55.0 / Crossover flat at 245.7

Source: Bloomberg

What to watch Wednesday

** Data: Europe reports Services PMIs with focus on the UK version post Brexit, estimated at 53.5 (prev 53.8), the weakest level since February 2017. Eurozone reports Retail Sales figures for May before attention shifts to US Factory Orders and Final Durable Goods Orders

** Events: Watching Fed Policy Minutes of June 14th meeting (19.00)

** Supply: Germany to sell EUR4bn 2022 OBLs

SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline

Recommended Articles

  • IGM Credit, IGM FX and Rates

    China Insight: More Small Banks in Trouble as Re-leveraging Underway

    By Tim Cheung 19 Nov 2019

    The health of China's smaller banks has come under pressure as Yichuan Rural Commercial Bank and Yingkou Coastal bank are said to have suffered bank runs in recent weeks amid fears over poor management and liquidity issues. Earlier this year, a rare government takeover of Baoshang Bank and a state rescue of Jinzhou Bank and Hengfeng Bank raised concerns about the underlying health of hundreds of small banks in China. Admittedly, China has entered another round of re-leveraging, albeit a softer one this time. With the fundamental issue of macro leverage unsolved, we expect China's debt-to-GDP ratio, currently in the 290-300% area, to reach 320% by 2025 (chart 1).  

    Topics Industry News

  • IGM Credit, IGM FX and Rates

    The Context 11.18.19

    18 Nov 2019

    Inside this week’s edition of The Context, Financial Intelligence thought leaders discuss: Brl/Mxn Corrects Lower, But Still See Mxn Underperformance in Medium-term Due to Mexico's challenging GDP growth outlook, the reduction of the real rate and lingering risk of credit rating downgrades, we still see scope for Mxn underperformance in the medium-term. Whilst the Brl rally has paused, and for good reason, the arguments we presented for Brazilian economic outperformance remain. Euro Corp Comment: Issuance Slows But it Remains a Seller’s Market It was another active week for the European corporate bond market where another EUR7.455bn printed in the single currency courtesy of eleven issuers (13 tranches). Whilst being a decent total, it did however mark a considerable slowdown from the jumbo EUR11.25bn that hit the tape the week prior. What remained constant though was that there remained plenty of cash directed toward new corporate offerings… The CAD Week - Bias is Neutral to Bearish We get some major releases this week out of Canada, with manufacturing sales, CPI and retail sales being released on Tue, Wed and Fri respectively, but ultimately the most influential topic for the BoC is the ongoing trade war and its effect on domestic industry. Read more from The Context and subscribe to have it delivered to your inbox each week!

    Topics Industry News

  • IGM Credit

    Asia Bond Barometer: Riskier categories still favoured

    14 Nov 2019

    Asia Bond Barometer: Riskier categories still favoured


Any questions? Speak to a specialist

Would you like to request sample data or analysis from Informa Financial Intelligence? 

See how our tailored solutions can help you gain a competitive advantage: