Headlines
- Credit indices dancing on the spot.
- High primary activity in SEK this week.
Market commentary
The credit market this week was rather uncertain. Continued worries about emerging markets were tempered by rather mixed macro indicators from the US. Especially civil uprisings in Venezuela and Ukraine grabbed the headlines which, coupled with wobbly news out of China regarding macro numbers but aided by looser credit policies, contributed to volatility. Overall the iTraxx Main (investment grade index) ended the week unchanged w/w at +73bp. The iTraxx Crossover index (high yield index) widened slightly by 2bp to +278bp.
The Q4 reporting season is heading for the home stretch with some 76% of large-cap European and US companies having reported so far (based on SP500 and BE500). Overall the trend has a positive bias, as 64% of the reports have exceeded market expectations.
In Denmark the incumbent utility DONG Energy got final approval for issuing new equity worth DKK13.05bn. Following this the Danish government’s stake in DONG Energy has been reduced to 57.3% from 81%. The new owners count Goldman Sachs, ATP and PFA. We now expect S&P and Fitch to remove their negative outlook on DONG Energy’s high BBB rating. We have a BUY recommendation on DONG Energy.
This week’s new issuance activity slowed down a tad after a rather busy last week. Thyssenkrupp and Gazprom successfully tested the European EUR benchmark market. From the Nordic region Swedbank and SPP Livforsäkring issued subordinated FRNs. In the non-financial sphere, Swedish SSAB did a dual-trance SEK issuance. The ‘green-bond’ market seems to be grinding momentum, this week fuelled by issues from the African development bank and Unibail-Rodamco. In the Nordic municipality sphere we saw Uppsala Kommun issuing a dual tranche in SEK.
To Read the Entire Report Please Click on the pdf File Below