Oct. 1, 2015, 12:06 PM
Sep. 10, 2015, 4:12 AM
- Companies raised $28B of investment-grade bonds in U.S. markets yesterday as the corporate-debt market roared back to life after a three-week hiatus that was partly due to worries about China.
- Nineteen companies issued debt, including Gilead Sciences (NASDAQ:GILD) with a $10B deal, home-improvement retailer Lowe’s Cos. (NYSE:LOW) and hotelier Marriott International (NASDAQ:MAR).
- Overall, firms have sold $1.2T worth of new debt in the U.S. this year, including junk-rated paper, putting the market on course to set a record for a fourth consecutive year.
- ETFs: LQD, VCSH, VCIT, VCLT, CORP, CSJ, CIU, CSI, CRED, LWC, CLY, SCPB, ITR, IGHG, QLTA, FCOR, IGS, COBO, SLQD, LQDH, QLTB, CBND, LDRI, IGU, SKOR
Sep. 4, 2015, 4:11 PM
Sep. 2, 2015, 2:57 PM
- “We’ve seen new issuance evaporate at the moment,” says Roger Bayston, director of fixed income at Franklin Templeton. Globally, investment-grade bond issuance last month was $72.24B, according to Dealogic, down from $97B a year earlier.
- The slowdown is even more dramatic when considering volume YTD of $1.21T is the highest level on record.
- “It’s not that the market is closed, but people continue to look for the right window,” says JPMorgan's Huw Richards.
- On the rise, however, are concessions, or the extra yield borrowers pay to attract lenders. They averages 12 basis points from May-June vs. 4 bps in the same period in 2014.
- ETFs: LQD, CORP, CSI, CRED, PICB, IBND, QLTA, FCOR, IGS, COBO, CBND, QLTB, IGU, SUBD
Sep. 1, 2015, 12:53 PM
Aug. 3, 2015, 5:57 PM
Jul. 1, 2015, 2:27 PM
Jun. 9, 2015, 10:03 AM
- The government bond rout took a breather on Monday, but is back in business today, led by an eight basis point gain in the German 10-year Bund yield to 0.96%. The 10-year U.S. Treasury yield is up six basis points to a new 2015-high of 2.44%. The next stop on the charts could be the 52-week high of 2.70% hit roughly one year ago.
- TLT -1.1%, but corporate bonds are faring better, with LQD -0.5%, and HYG -0.15%.
- The Barclays Aggregate Bond Fund (AGG -0.3%) and the Vanguard Total Bond Market ETF (BND -0.3%).
- ETFs: PLW, GOVT, BUNL, FTT, EGF, BUNT, GGOV, TAPR
Jun. 4, 2015, 11:01 AM
- For all the talk of Russia's economic woes, the corporate debt of that country has far outperformed that of the U.S. this year. Noting that, Deutsche Bank strategists Oleg Melentyev and Daniel Sorid suggest the tide of the U.S. corporate debt boom could be turning.
- Helped by a flood of retail money into investment-grade bond funds, the size of the corporate debt market has risen to $7.8T from $5.4T in 2009, fueling a boom in buybacks and EPS in an otherwise middling economic environment.
- The result is more levered corporate balance sheets (even stripping out oil companies) just at the time when the Fed is getting set to hike interest rates.
- "As the Fed prepares the market for the end of the period of zero short-term rates, we may be approaching a reassessment of just how much leverage is appropriate given the overall market compensation," conclude the duo.
- Source: Bloomberg
- ETFs: LQD, VCIT, VCLT, CORP, CIU, CSI, CRED, LWC, CLY, ITR, IGHG, QLTA, FCOR, IGS, COBO, LQDH, QLTB, CBND, IGU, SKOR
Jun. 1, 2015, 2:17 PM
May 4, 2015, 4:46 AM
- U.S. companies have issued a record $39B of bonds in 2015 that mature in more than three decades, more than five times the amount sold in the same period last year, according to data compiled by Bloomberg.
- Oracle joined the fold this past Tuesday, selling $1.25B of securities due in 2055. Another notable is Microsoft, which sold its first 40-year bond in February.
- Treasurers are embracing what may be their last opportunity to lock in cheap long-term funding costs before the Fed raises rates, while investors are snapping up the longer-dated securities because they offer a higher yield over shorter-term debt.
- ETFs: HYG, JNK, LQD, HYLD, HYS, VCSH, SJNK, VCIT, VCLT, CWB, CORP, SJB, CSJ, BSJF, CIU, ANGL, BSJG, HYHG, CRED, LWC, BSJI, HYLS, CLY, SCPB, UJB, ITR, BSCF, BSCH, IGHG, WYDE, XOVR, BSJH, QLTA, THHY, HYZD, QLTC, BSCI, BSCG, SHYG, BSJJ, HYND, HYGH, BSJK, IBCE, FCOR, TYTE, IGS, COBO, BSCK, LQDH, SLQD, QLTB, IBCB, BSCJ, CBND, IBCC, BSCL, IBDB, LDRI, IBDD, IBDF, IGU, BSCM, IBDA, IBCD, IBDC, IBDH, SKOR, BSCO, BSCN, BSJM, IBDK, BSJL, IBDO, IBDN, IBDP, IBDQ, IBDM, IBDJ
May 1, 2015, 2:28 PM
May 1, 2015, 10:56 AM
- Junk bonds have returned a total of 3.8% year-to-date, according to BAML vs. 1.7% for investment-grade and 1.3% for Treasurys. In April, high-yield had a total return of 1.2%, while both investment-grade and Treasury paper posted negative returns.
- As of yesterday, the spread between high-yield and Treasurys was 459 basis points. At the start of the year, it was 504 bps. The spread has likely narrowed even more today as Treasurys tumble in price, but high-yield edges higher. Both JNK and HYG are up 0.1%, while TLT is down 1.3%.
- ETFs: HYG, JNK, LQD, HYLD, CORP, SJB, ANGL, CRED, HYLS, UJB, XOVR, QLTA, QLTC, FCOR, IGS, COBO, QLTB, CBND, IGU
Apr. 7, 2015, 1:09 PM
- With the Fed threatening to take away the punch bowl, American companies have found a friend in the ECB, whose QE has made borrowing across the pond far less expensive than doing it here, writes Lisa Abramowicz.
- Yields on investment-grade corporates in Europe have dipped all the way to 0.99% vs. 2.9% in the U.S., according to BAML. U.S. companies can save money even if they pay for expensive currency hedges. Consequently, roughly 65% of the record €60B of euro-denominated bonds sold in March (a record) came from overseas companies.
- Junk-rated credits are also looking to the Continent, where yields on euro-denominated high-yield bonds of 4.3% are about 220 basis points lower than the States.
- ETFs: HYG, JNK, LQD, HYLD, CORP, SJB, IHY, CRED, ANGL, HYLS, PGHY, UJB, HYXU, PICB, IBND, XOVR, QLTA, QLTC, IJNK, COBO, IGS, FCOR, CBND, QLTB, IGU, SUBD
Apr. 1, 2015, 12:28 PM
Mar. 26, 2015, 8:14 AM
- Investment-grade and junk-rated companies combined have sold $438B of new bonds YTD, according to Dealogic, topping the previous record of $384B in 2013. Bond sales related to M&A of $87B are also at a record YTD.
- Corporate treasurers no doubt are pushing out as much debt as possible to take advantage of low rates, but they're finding plenty of willing buyers.
- “I can’t see anything on the radar that’s going to slow things down materially,” says one fixed-income manager.
- ETFs: HYG, JNK, LQD, HYLD, CORP, SJB, CRED, ANGL, HYLS, UJB, XOVR, QLTA, QLTC, COBO, IGS, CBND, FCOR, QLTB, IGU
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