With a mixed news flow last week indices first tightened and then widened towards the weekend. Overall, iTraxx Main widened 2bp over the week closing at 73.5bp, while Itraxx Crossover widened 9bp closing at 313bp.
While the Fed statement indicated a slightly more hawkish tone, we saw mixed data releases for the Euroarea with better than expected activity figures but weaker inflation.
Last week showed healthy activity in the primary market. Among others, McDonald's (NYSE:MCD) came to the market with EUR3bn in four tranches, while Unilever (LON:ULVR) issued EUR1.5bn in a three tranche deal and we saw several Tier 2 deals. In the Nordic market, Husqvarna issued SEK1.7bn in a three tranche transaction and a couple of HY deals came to the market.
Company news flow was concentrated with a large share of the Scandi companies reporting Q1 16 figures over the week.
The Swedish National Debt Office published its proposal on how MREL will be implemented in Sweden. Our main takeaways are that the proposal is positive for senior unsecured, that subordinated senior will be introduced in Sweden in the future and that we are no longer structurally negative on Tier 2 capital from Swedish banks. See Credit Update: MREL in Sweden
Yesterday we published a trade idea to buy Kemira (EUR) 2019s and 2022s, see slide 16 for more information.
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