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Mega Deals

17 May 2016 by lberuti

Credit indices failed to offer any meaningful changes on the day and daily variations were minimal across the board (iTraxx Main unchanged @ 78bps, iTraxx Crossover 1bp tighter @ 327bps, CDX IG unchanged at 81.5bps), even if there was some intraday volatility. A positive open in Europe following the continued commodity recovery and buoyed equity markets was cancelled in the afternoon by better than expected economic statistics in the US which raised the prospect of a June interest rate FED hike. The real excitement actually came from the cash market. Numerous new deals have been issued since the beginning of the month on both sides of the Atlantic. Yesterday saw the launch of a multitranch deal by Dell. The mega deal will amount to $20bln split over 6 maturities ranging from 3 to 30 years. It allegedly attracted more than $80bln in orders and all tranches were indicated tighter than their issue price in the grey market. Such an enthusiasm eventually impacted the 5 year CDS which closed 18bps tighter at 520bps, which is the tightest it has traded since the March roll.