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US markets continued lower with S&P and Nasdaq closing lower by 0.9% and 0.6% respectively driven by Energy and Tech stocks. Energy stocks ended lower on fears of increased Iranian oil supply which could lead to lower oil prices as the Iran nuclear deal nears finalization. Walmart and Macy’s reported encouraging numbers boosted by strong grocery and e-commerce sales. Apple was down 1.1% and Microsoft was down 0.9%. European equity indices were stable with the FTSE flat and DAX and CAC slipping 0.1% and 0.2%. US 10Y Treasury yields remained stable at 1.65% and US IG CDS spreads were 1bp wider and HY spreads were 3.2bp wider. EU main spreads were 0.6bp wider and crossover spreads widened 2.6bp. Asian equities have had a mixed opening. While Nikkei is down 1.1%, Hang Seng is up 1.4% with Asia ex-Japan CDS spreads tightening 1bp.
Hotel Properties S$ 7Y at 3.9% area
UOB raised €750mn via an 8Y covered bond at a yield of 0.124%, just 2bp inside initial guidance of Mid-swaps + 12bp area. The bonds have expected ratings of Aaa/AAA and received orders over €850mn, 1.1x issue size.
RyanAir raised €1.25bn via a 5Y bond at a yield of 0.98%, 30bp inside initial guidance of MS+120bp area. The bonds have expected ratings of BBB/BBB and received orders over €5.2bn, 4.2x issue size. Proceeds will be used for general corporate purposes.
Jiangsu Jinguan Investment raised $100mn via a 3Y credit enhanced bond at a yield of 2.35%, 5bp inside initial guidance of 2.4% area. The issuer of the bonds is Haixi Overseas Investment with a guarantee by Jiangsu Jinguan Investment. Bank of Jangsu Lianyungang branch will also provide a standby letter of credit. The bonds are unrated. Proceeds will be used for project investment and development, debt refinancing and working capital.
“The primary risks today involve overheating, asset price inflation and subsequent financial excessive leverage and subsequent financial instability. Not a downturn in the economy, excessive unemployment and excessive sluggishness,” Summers said. “It is not tenable to assert today in the contemporary American economy that labour market slack is a dominant problem… Walk outside: labour shortage is the pervasive phenomenon.”
On China’s biggest ‘bad bank’ testing Beijing’s resolve on financial reform