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US Treasury yields trudged lower across the curve on Friday. While there was no data from the US, Atlanta Fed President Raphael Bostic came out with his take on rate cuts. He said that he now expects just a single 25bp rate cut this year instead of the earlier two cuts he had projected. Regarding inflation continuing to fall towards the 2% target, he said, “I’m definitely less confident than I was in December”. Credit markets saw US IG CDS spreads widen 1.5p and HY spreads widen 8bp. Looking at equity indices, S&P and Nasdaq ended mixed with the former down 0.1% and the latter up 0.2%.
European equity indices closed mixed. European IG CDS spreads widened 2.2bp and HY spreads were 12bp wider. Asian equity markets have opened mixed today. Asia ex-Japan IG CDS spreads were 2.4bp wider.
FWD Group raised $900mn via a 5Y bond at a yield of 8.4%. The junior subordinated notes are rated Ba1/BBB- (Moody’s/Fitch). In September 2023, the Hong Kong based insurer had shelved a planned dollar bond offering where it hoped to raise about $325mn via a 10Y bond. The new bonds were priced at par and have jumped over 3.7% in the secondary market since they were issued.
Bombardier raised $750mn via a 7NC3 note at a yield of 7.287%, 15bp inside initial guidance of 7.375-7.5% area. The notes are rated B2/B, and proceeds will be used to refinance up to $400mn of its outstanding 7.125% 2026s. The new bonds are priced 14.3bp tighter to its existing 8.75% note due November 2030 (callable in November 2026) that currently yield 7.43%.
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Our ideal candidate will have 6 to 12 years of experience in cash bond sales / research / product management in exchanges, brokers, banks or EAMs. If you or anyone you know is interested, please write to our co-founder and CEO, Dr. Rahul Banerjee at rahul.banerjee@bondblox.com.
Moody’s changes outlook on Tunisia to stable from negative; affirms Caa2 ratings
Panda bonds are renminbi denominated notes sold by a non-Chinese issuer in onshore China. The first of its kind was issued by the IFC and ADB in 2005. While these bonds attract Chinese investors, they have also gained traction among international investors. It also helps issuers diversify investor bases and reduce currency risk.
Pakistan is planning to issue up to $300mn in debut Panda bonds to tap the Chinese markets.
On Burned Before, Bond Markets Resume Rate-Cutting Trades Worldwide
Jim Reid, Deutsche Bank
“Whether we actually get what is priced in is a moot point, but for the current direction of travel, the promise is all that matters for now”
Michael Cudzil, PM at PIMCO
“It’s likely the big central banks such as the ECB, Fed and BOE all get started cutting rates in the middle of this year… The speed and destination will vary across the globe and that’s great for fixed-income”
On Fed getting an earful about ‘stranglehold’ from high rates
Cara Walton, director at Harbour Results
“The total cost to invest is very high, and the return on that investment is very long and getting longer… have never run a business with interest rates like this… it’s uncharted territory for us”
Derrick Chubbs, CEO of Second Harvest Food Bank of Central Florida
“We’re basically in the midst of a perfect storm”