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While the credit markets were not as hot as they were Monday, there were some interesting deals launched - a few investors might consider looking into.

Tuesday's deals included:

IssuerRatingTenorSizeSpread
Computer Sciences (NYSE:CSC)Baa2/BBB3yr$350MM+220
Computer SciencesBaa2/BBB10yr$350MM+280
Tucson Electric Pwr (NYSE:UNS)Baa3/BBB-10.5yr$150MM+220
AstraZeneca PLC (NYSE:AZN)A1/AA-7yr$1,000MM+85
AstraZeneca PLCA1/AA-30yr$1,000MM+120
News America Inc. (NASDAQ:NWSA)Baa1/BBB+10yr$1,000MM+140

Tucson Electric term sheet. CSC term sheet, AstraZeneca prospectus.

In order to calculate the yield, the following are the relevant treasury points:

  • 3yr: 0.33%
  • 5yr: 0.67%
  • 7yr: 1.13%
  • 10yr: 1.71%
  • 30yr: 2.86%

The credit markets continued their slow and steady march tighter as risk continues to be en vogue. The way I view spreads - as risk premiums relative to the risk free rate - the market continues to have value.

(click to enlarge)

Source: Citi

The cash market and the credit default swap market (utilizing the CDX index) had slightly different opinions:

Source: Citi

Notice how on a month to date basis, both cash and CDS markets have been tightening, showing both investor appetite for spread product and the willingness to add risk.

Source: Credit Market Tuesday

Additional disclosure: This article is for informational purposes only, it is not a recommendation to buy or sell any security and is strictly the opinion of Rubicon Associates LLC. Every investor is strongly encouraged to do their own research prior to investing.