Friday, February 3, 2017

Corporate Bond Market

US Equity Futures are strong to end the week with the DJ Futures +40 and the S&P Futures +3.00. The global trend is positive with overseas equities trading higher through the overnight. Oil is up to $53.71/ barrel and rates are weaker with the 10yr Treasury last at 2.48%. Credit is firm with the Invest Grade Index showing 58.27/58.87 and cash is also tighter.

In credit news, yesterday’s primary market saw $11.5bn priced in Investment Grade Credit with Apple leading the charge. In the High Yield space, Harland Clarke brought a $350mn 5.5NC2 deal. We are active in both Apple and Harland Clarke from yesterday’s issuance.

On the earnings front, Weatherford (WFT; Caa1/B) reported a 4Q16 adjusted loss of $303mn, or $0.32/share, coming in just ahead of consensus expectations for a $0.34/share loss. Adjusted Ebitda totaled $67 mn in 4Q16, little changed from the prior quarter but down 71% from the year­ ago quarter. Adjusted results exclude $246mn, or $0.27/share, of net after ­tax charges including costs for severance and restructuring of business lines, litigation charges, impairments, and asset write ­downs. Please take a moment to view Sean’s piece that he sent around last night on the detailed earnings and our upgraded recommendation on the credit.

In economic data, US Underemployment Rate rose to 9.4%, highest since October and US Annual Hourly Earnings gain weakest since August.