Danske Research Team
Danske Bank A/S
What’s on our mind
- General credit market news
The European credit market moved more or less sideways during the week until the announcement that Greece will reshuffle its bailout-negotiating team, meaning that Finance Minister Yanis Varoufakis will get a less important role in the negotiations. iTraxx Crossover tightened some 10bp following the announcement. iTraxx Main was 2bp lower.
European primary market activity has continued to be strong, with EUR20.2bn priced in the investment grade space over the past week and EUR5.6bn in high-yield issues. Considering the pipeline for this week, the appetite seems to be holding up well.
The Q1 earnings season intensified over the week, with overall good reports, with Electrolux, SSAB, Volvo, BillerudKorsnäs and Neste Oil standing out with the best reports in our coverage universe. Organic growth in Q1 was generally weak but currency effects, primarily from a strong USD boosted sales and earnings.
Over the past week, two well-established names in the Swedish credit market received public ratings from S&P: Intrum Justitia (‘BBB-’) and Hemsö(‘A-’). Hemsö 2018 tightened some 15bp on the release and Intrum Justitia 2019 went from around 185bp to 95bp over Stibor 3M. The benefit of a public rating has thus become very clear for the Swedish issuers.
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