Summary
- Credit spreads have moved substantially tighter
- Continued high primary market activity
- Lending survey from Danish Central Bank suggests an ugly Q1 for Danish banks in terms of losses
- The small Danish bank, Gudme Raaschou, has failed and is now being taken over by the state-owned winding-up company
Headlines from the credit market this week
Generally positive signals from US banks spurred a rally in both equities and credit during the week. Cash bonds are currently very well bid and offers are becoming harder to find. Consequently, the short end of the cash curve has tightened substantially. In CDS, the investment grade index, iTraxx Europe, has tightened by some 15bp during the week and is currently trading around 148bp while the high yield index, iTraxx Crossover, has tightened by 100bp to 830bp.
In the primary market the good activity continues and the bonds launched during the week saw favourable performance after issuance. From the Nordic region, Statoil came to the market with a USD 2bn transaction.
