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Weekly Credit Strategy Update
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The activity in the primary market continues
Fri, May 16 2008, 13:01 GMT
by Danske Research Team
The activity in the primary market continues at a high pace as the volatility in the credit market has come down and spreads have tightened substantially. Generally, the new issues have performed well and we anticipate continued high activity in the primary market in the weeks ahead.
The credit market continued its rebound in a week of further tightening of secondary spreads and massive activity in the primary market. iTraxx Europe and high yield credit spreads in iTraxx Crossover are currently trading at around 67bp and 406bp, respectively down from 81bp and 463bp last Friday.
In addition to the fine performance in CDS spreads we see more and more 2-way prices in the credit market albeit bid-ask spreads continue to be somewhat wide. The positive feeling in the market was also reflected in the primary market where we have seen heavy new issuance this week. Most of the new issues have been profoundly oversubscribed - especially senior financials. Eg, Svenska Handelsbanken came to the market with a 2-year senior floater where the book reached EUR 4bn after one hour. The price was subsequently tightened to 48bp (price talk was 50-55bp) but still the bond performed a further 13bp in just one day and now trades in the mid-thirties. In the table below we have listed some of the new issues this week but please note that there have been several deals in addition to those listed.
Published on Fri, May 16 2008, 13:03 GMT
Archive
- The crisis seems to be affecting Europe on a larger scale
Published On Fri, Oct 3 2008, 12:48 GMT - During the week money market distress reached new heights
Published On Fri, Sep 26 2008, 13:07 GMT - The most dramatic week ever in the credit market
Published On Fri, Sep 19 2008, 13:35 GMT - Fannie Mae and Freddie Mac taken over by the US Treasury
Published On Fri, Sep 12 2008, 13:12 GMT - The change from ECB in its collateral framework took indices wider at the end of the week
Published On Fri, Sep 5 2008, 10:50 GMT
Danske Bank
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