30 August 2016 by lberuti
It has been by far the quietest summer in recent years. Brexit failed to provide the excitement that Greece, China or the taper tantrum did. Today was another day where variations were capped at 3bps across all credit indices, investment grade and high yield alike. Single reference CDS were no different and, barring a slight outperformance of financials as UCGIM ( UniCredit SpA ) is looking into a potential €20Bln of NPL sale, they also experienced minimal moves. It does not mean that the credit market is asleep though. Over the last couple of days, substantial amount of bonds have been issued by corporates. Yesterday almost $8Bln were issued in the US among 4 issuers. Today in Europe more than €3.5Bln were brought to the market, and all deals achieved impressive terms: Coca-Cola issued €500m 20 year bonds at mid-swap + 45bps (that compares with an earlier indicative terms of MS +60/65bps); Evonik priced €650m 4.5 year bonds at MS +20bps (vs their early indicative MS +30bps), €750m 8 year bonds at MS +35bps (vs their early indicative MS +45bps) and €500m of 12 year bonds at MS +45bps (vs their early indicative MS +55/60bps); KPN sold €625m 8.5 year bonds at MS +60bps (vs their early indicative MS +75/80bps) and €625m 12 year bonds at MS +80bps (vs their early indicative MS +100bps).