Danske Research Team
Danske Bank A/S
What’s on our mind
- General credit market news
From this week onwards we have merged our two weekly credit publications (Weekly Credit Update and Scandi High Yield Weekly) into one publication named Weekly Credit Update. This publication will contain information with regard to the Nordic investment-grade and high-yield markets. As always feedback is highly appreciated.
Credit markets recovered on Friday and Monday in tandem with increasing prospects that the last-minute negotiations between Greece and its creditors would end with some sort of viable agreement – increasing the prospects for an orderly restructuring of the country and the avoidance of a payment default. It looks as if the high-stakes end-game is to be played out during the coming days, with some significant downside to credit spreads over the summer if a viable restructuring solution is not agreed (very) shortly. However, we see it as credit positive that at least it finally seems as if there is some movement among the parties towards reaching an orderly outcome.
Secondary market liquidity remains poor across the board (both euro and Scandi) with few buyers wanting to dip their toes in the water despite juicier spreads.
Both iTraxx Main and Crossover remained very volatile last week, but tightened significantly during Friday and Monday. At the deadline of this publication iTraxx Main and iTraxx Crossover had tightened to a level around of some 67bp and 289bp respectively. Spreads in the illiquid Nordic HY cash market widened by around 8bp over the week ending Friday.
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