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Jul. 25, 2014, 11:14 AM
- Withdrawals from high-yield funds accelerate, hitting about $4.8B this week, according to EPFR Global - that's the 3rd largest weekly outflow since June of 2013.
- Investment-grade funds, on the other hand, saw inflows of roughly $4.2B, their 31st consecutive week of inflows.
- Jim Reid's Deutshce notes high-yield has been struggling this month, but no signs of stress have emerged. Indeed, the high-yield issuance market remains open for business, with another $1.3B priced just yesterday.
- High-yield ETFs: HYG, JNK, HYLD, SJB, IHY, ANGL, HYLS, PGHY, HYXU, UJB, XOVR, QLTC, IJNK
- IG ETFs: LQD, CORP, CRED, PICB, IBND, QLTA, COBO, IGS, CBND, IGU, SUBD, QLTB
May. 20, 2014, 11:44 AM
- With borrowing costs about the lowest on record, and investors lending first and asking questions later, corporate finance officers are busy taking out loans. "My treasurer tells me always borrow when you can, not when you have to," says Shell CFO Simon Henry. "There are huge liquid pools at whatever tenor we need ... There's more capital out there than we can consume."
- The average yield on corporate debt has fallen 61 basis points this year to 4.4%, nearing last year's pre-bond bear market low of 4.1%.
- “The market is pretty hot,” says George Dessing, treasurer of Dutch business-to-business publisher Wolters Kluwer NV which raised 10-year money this month. “We have a preference for longer maturity and especially right now at these low costs it was a no-brainer.”
- ETFs: LQD, VCSH, VCIT, VCLT, CORP, CSJ, CIU, CFT, SCPB, LWC, ITR, CLY, IBND, PICB, QLTA, IGHG, PFIG, SLQD, IGS, CBND, SUBD, IGU, QLTB
May. 11, 2014, 5:47 AM
- Delek Drilling (DKDRF) and Avner Oil (AVOGF) have raised $2B in international bonds that the companies will use to finance the development of the massive Leviathan natural-gas field off the coast of Israel.
- The offering attracted demand of $13.5B and was over-subscribed by 650%.
- Avner and Delek Drilling, which are subsidiaries of Delek Group (DGRLY), hold a combined 45.34% in Leviathon, while Noble Energy (NBL) owns a stake of 39.66% and is the field's operator. Ratio Oil (RTEXF) holds the remaining 15%; Australia's Woodside Petroleum (WOPEF) has agreed to buy 30% from the partners.
- ETFs: GHYG, IBND, PICB, CEMB, GLCB
Apr. 7, 2014, 12:44 PM
- With the ECB considering further easing steps to try and combat deflation, S&P Capital IQ's Todd Rosenbluth suggests a couple of ETFs for fixed-income investors looking to get exposure to international corporate debt.: The SPDR Barclays International Corporate Bond ETF (IBND +0.3%) and the PowerShares International Corporate Bond ETF (PICB +0.4%).
- IBND has duration of about five years and significant exposure to investment-grade paper issued by German, French, Spanish, and Italian companies. PICB has a slightly higher duration and - at 0.5% - an expense ratio five basis points lower. In addition to European exposure, PICB also has a larger stake in Canada.
Mar. 3, 2014, 4:32 PM
- Eyeing better growth and sustained low interest rates, Moody's projects the global default rate to drop to 2.2% this year or 61 companies globally, from 2.9% or 66 companies in 2012.
- "Additional factors that support our view of a low default rate in 2014 are the continuous accommodative monetary environment together with ample liquidity, which has and will continue to allow distressed companies to access the capital market and reduce refinancing risk in the near future."
- For perspective, the average default rate since 1983 is 4.7%. It is indeed a golden age for corporate borrowers.
- Related ETFs: LQD, VCSH, VCIT, CORP, VCLT, CSJ, EMCB, CIU, CFT, EMCD, SCPB, LWC, GHYG, CLY, IBND, ITR, CEMB, PICB, QLTA, GLCB, IGHG, SLQD, PFIG, IGS, CBND, IGU, QLTB
Sep. 25, 2013, 7:06 AM
- Simon Property Group (SPG) is the latest in a string of issuers raising money in European debt markets as the yield discount to U.S. paper nears its widest in 4.5 years. Simon is selling €750M of seven-year notes yielding 75 bps over swaps, about 122 bps better than it could get in the States.
- Behind the widening is monetary policy - the Fed is making noises about pulling back from stimulus, while the ECB isn't yet close to that point.
- U.S. high yield ETFs: HYG, JNK, PHB, HYLD, HYS, SJB, UJB, SJNK, ANGL, BSJG, BSJH, BSJI, QLTC, XOVR.
- Int'l high yield: IHY, HYXU, PGHY.
- U.S. investment grade ETFs: U.S.: LQD, CBND, CORP, FLTR, FLRN, ITR, LWC, SCPB, VCIT, VCLT, VCSH, IGU, IGS, CSJ, QLTA, QLTB, BSCI, BSCJ, BSCK, BSCL, BSCM.
- International investment grade: PICB, IBND, IBCB, IBCC, IBCD, IBCE, IBDA, IBDB, IBDC, IBDD.
Aug. 26, 2013, 10:05 AM
- With interest rates on the rise, corporate treasurers are shelving plans to raise money, with just $61B in corporate debt issued globally thus far in August - on course for the weakest month since 2008, according to Dealogic. In August 2012, $121B was raised.
- Corporate bond issuance was running at a fast pace earlier this year, but Apple's $17B April offering in hindsight looks very much like a bell-ringer.
- Bankers are hopeful going forward, with one noting a backup in the pipeline. "The market has generally re-priced on the back of higher yields and we fully expect investors to have appetite at new levels."
- U.S. corporate bond ETFs: LQD, CBND, CORP, FLTR, FLRN, ITR, LWC, SCPB, VCIT, VCLT, VCSH, IGU, IGS, CSJ, QLTA, QLTB, BSCI, BSCJ, BSCK, BSCL, BSCM.
- International corporate bond ETFs: PICB, IBND, IBCB, IBCC, IBCD, IBCE, IBDA, IBDB, IBDC, IBDD.
Feb. 6, 2013, 3:58 AMSoftbank (SFTBF.PK) reportedly intends to issue $3.2B worth of four-year bonds to help finance its acquisition of a 70% stake in Sprint (S) for $20.1B. "Softbank is well-known and popular among individuals," says analyst Mana Nakazora. "There isn’t concern about the bonds remaining unsold." | Comment!
Feb. 5, 2013, 2:02 AMUBS (UBS) offers to buy back 5B francs ($5.5B) in senior debt after the massive downsizing of its investment bank cut its liquidity and funding requirements. While the move will "lower interest expense in the future," UBS says it could also bring "significant" Q1 own credit charges due to a possible tightening of its credit spreads. (Q4 earnings) (PR) | Comment!
Sep. 5, 2012, 10:55 AM"The complacency is staggering," says an asset manager of the corporate bond market (specifically Europe). When France is able to sell debt at negative rates, just about any corporate issue with a plus sign in front of the yield is going to look good to fund managers. "We are facing quite binary outcomes; investors should be concerned." | 1 Comment
Aug. 10, 2012, 9:05 AMWhat crisis? Europe's corporate bond market is cruising, investment-grade euro-denominated bonds returning 8.9% YTD. Spreads remain wide - more than 200 bps to sovereign bonds vs. 50 bps pre-crisis - but there are good reasons for this. The search for yield continues, but how much upside is left? | Comment!
Aug. 4, 2012, 9:44 AMFocused on what ECB action may be on sovereign debt, markets are underpricing the chance the central bank steps into corporate bonds, opine two Goldman strategists. Measures could include direct purchases of corporate paper or a "funding for lending" scheme (a la the BOE). The moves would allow the ECB to provide market support without violating its mandate against financing of governments. | 9 Comments
Jun. 12, 2012, 3:58 AM
Jun. 7, 2012, 2:36 PM
PICB vs. ETF Alternatives
The PowerShares International Corporate Bond Portfolio (Fund) is based on the S&P International Corporate Bond Index (Index). The Fund will normally invest at least 80% of its total assets in the securities that comprise the Index. The Index measures the performance of investment-grade corporate bonds issued by non-U.S. issuers in the following currencies: Australian Dollar (AUD), British Pound (GBP), Canadian Dollar (CAD), Euro (EUR), Japanese Yen (JPY), Swiss Franc (CHF), Danish Krone (DKK), New Zealand Dollar (NZD), Norwegian Krone (NOK) and Swedish Krona (SEK).
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