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US Treasury yields rose across the curve on Monday, with the 10Y yield up 8bp and the 2Y yield up 3bp. The push higher in yields came on the back of the March Retail Sales print that was stronger than estimated. Retail Sales came at 0.7% MoM vs. expectations of 0.4%. Moreover, February’s Retail Sales were adjusted upwards to 0.9% (from 0.6% previously). Core Retail Sales jumped 1.0% MoM in March vs. 0.3% expected. New York Fed President’s John Williams continued to reiterate his stance on rate cuts noting it “will likely start this year”. US IG CDS spreads widened 2.8bp and HY spreads widened 14bp. The S&P and Nasdaq fell by 1.2% an 1.8% respectively.
European equity indices ended mixed. European IG CDS spreads widened 1.1bp and crossover spreads were 10.4bp wider. Asian equity markets have opened in the red today, following US bourses. Asia ex-Japan IG CDS spreads were 0.5bp wider.
EDF raised $2.05bn via a three-part deal. It raised:
The senior unsecured bonds are rated Baa1/BBB/BBB+.
JPMorgan raised $9bn via a four-trancher.
The SEC-registered senior unsecured bonds are unrated. Proceeds will be used for general corporate purposes.
Wells Fargo raised $4.25bn via a two-trancher. It raised $3.5bn via a 4NC3 bond at a yield of 5.707%, 25bp inside initial guidance of T+120bp area. It also raised $1bn via a 4NC3 FRN at SOFR+107bp vs. initial guidance of SOFR equivalent area. The senior unsecured bonds are rated A1/BBB+/A+. Proceeds will be used for general corporate purposes.
Build America Bonds (BABs) are a new form of taxable municipal bonds that carry tax credits and federal subsidies for either the issuer or the bondholder. This was an alternative way for the federal government to subsidize local and state government borrowing whilst assisting them to finance capital projects.. Unlike traditional tax-exempt obligations, interest on BABs is federally taxable to bondholders.
On Ghana Debt Revamp Snag Just a Hiccup – Finance Minister Mohammed Amin Adam
Ghana has made “significant progress”… government will “regroup with our bondholders to continue to tweak the terms until we have final terms that work for all parties”
Beaten-Up Build America Bonds Are Worth a Look – Mikhail Foux, Barclays Strategist
“People are concerned about BABs altogether, but there is still a universe of bonds that are attractive, even at these levels”
On Yen at Risk of Falling 10% Against Dollar – T. Rowe Price
“It’s not in the interest of the Japanese to have a significantly stronger currency at this point… The larger the short positions, … They’ll be looking at this very tactically and they may have to therefore be prepared to see the cross weaken more than they would like”