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S&P ended 0.4% higher and Nasdaq was 0.1% higher. Overall, markets were relatively quiet as data was minimal with the US 10Y Treasury yields 2bp tighter at 1.56%. European equities rallied with DAX up 1.3%, CAC up 0.9% and FTSE up 0.5%. US IG CDS spreads were 0.3bp tighter and HY was 1.7bp wider. EU main CDS spreads were 0.6bp tighter and crossover spreads tightened 0.3bp. Asian equity markets are higher 0.5% today and Asia ex-Japan CDS spreads are 6.7bp tighter after China Huarong related risks have reduced post the regulator’s comments (details mentioned below).
China Water Affairs Group $ green bond
BOC Aviation $ bond
US primary market issuances rose to $49.7bn, up over 3x vs. $15bn in the week prior. The rise in issuance can be attributed to IG at $37.8bn vs. $16.3bn in the prior week dominated by jumbo deals by banking majors. HY issuances were at $11.5bn, slightly lower vs. $12.94bn in the prior week. The largest deals in the IG space were led by Bank of America’s $15bn six-trancher, which overtook JP Morgan’s $13bn five-trancher to become the largest issuances by a bank ever. In the HY space, United Airlines led the table raising $4bn via a dual-trancher. In North America, there were a total of 64 upgrades and 36 downgrades combined, across the three major rating agencies last week. LatAm saw only $1.1bn in deals last week vs. $3.26bn in the week prior with Investment Energy Resources and Banco GNB raising $700mn and $400mn respectively. EU Corporate G3 issuance saw a slight decrease last week to $24.2bn vs. $29bn in the week prior – Altice France raised $2.09bn followed by BNP Paribas’ $1.89bn issuances. Across the European region, there were 30 upgrades and 17 downgrades across the three major rating agencies. GCC and Sukuk G3 issuances were again meagre at only $660mn. Across the Africa/Middle East region, there were 3 upgrades and 2 downgrades across the three major rating agencies. APAC ex-Japan G3 issuances increased to $10.8bn vs. $2.4bn in the prior week led by Tencent’s $4.15bn four-trancher followed by CK Hutchinson’s $2bn three-trancher and CCB Hong Kong branch’s $1.1bn two-part deal. In the Asia ex-Japan region, there were 12 upgrades and 28 downgrades combined, across the three major rating agencies last week.
Adrian Miller, chief market strategist at Concise Capital