Friday, August 18, 2017

Corporate Bond Market
Good Morning – Global equity markets are mixed to start this morning after the S&P had its second biggest selloff of the year. Oil is slightly up and European stocks are down as traders react to the terrorist attack in Barcelona. The Euro Stoxx is down 27 points, FTSE down 74 points, and DAX is down 40.5 points. Asian equities are more mixed with the Nikkei down 40 points and the Hang Seng up 26 points. In an effort to reduce financial risk and support the economy, Chinese officials said they would restrict domestic companies from investing in overseas ventures such as real estate, hotels, entertainment, and sports clubs.

All three major indices in the US are higher with the Dow up 8 points, S&P up 2.5 points, and the NASDAQ up 19 point. Yesterday in the investment grade space we saw $1.555bn from two domestic utilities which brings weekly volume to $30.405bn. In the high yield space, Enova and H&E are expected to price today. As stocks faced continued pressure throughout the afternoon, the 10yr dropped below 2.19%.

Municipal Bond Market
Despite treasuries being stronger, munis were mixed yesterday as the last big deals of the week came to market. Citigroup priced Colorado Health’s $220 million of health facilities revenue and revenue refunding bonds for the Evangelical Lutheran Good Samaritan Society project in a deal rated BBB by S&P and A- by Fitch. The deal came to market as 5’s to yield 1.31% in 2018, 3.72% in 2037, 3.82% in 2042, and 3.84% in 2047. No big deals are expected today.