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:
| Issuer | Rating | Tenor | Size | Spread |
| Computer Sciences (CSC) | Baa2/BBB | 3yr | $350MM | +220 |
| Computer Sciences | Baa2/BBB | 10yr | $350MM | +280 |
| Tucson Electric Pwr (UNS) | Baa3/BBB- | 10.5yr | $150MM | +220 |
| AstraZeneca PLC (AZN) | A1/AA- | 7yr | $1,000MM | +85 |
| AstraZeneca PLC | A1/AA- | 30yr | $1,000MM | +120 |
| News America Inc. (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.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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.
