DAILY CLOSE: Primary in slowdown mode, stocks advance
** The new week started with a euro issuance blank across all sectors, with expectations low given the distraction of corporate earnings and seasonal factors which are thinning out liquidity. Monday's goose egg extends the slowdown that saw just EUR16.15bn issued last week, less than half the previous week's final EUR33.87bn. The immediate pipeline remains empty, suggesting yet another measured session on Tuesday
** IG corporates kept their power dry again on Monday, but there was a mandate announced with Severn Trent hiring leads for what will be the first sterling IG corporate deal since 18-Jun (Unite Group GBP400m Jun 2032s) and the first since the opposition Labour party won the UK general election on 4-Jul. The UK water company is conducting a series of investor calls on Tuesday (23-Jul) ahead a GBP 14yr senior unsecured sustainable notes offering issued by Severn Trent Utilities Finance PLC. See the IG CORP SNAPSHOT for more details including the official comps list
** The only activity in the covered bond arena Monday was a new mandate from Berlin Hyp AG (BHH). The borrower hired DekaBank and LBBW as joint lead managers for their inaugural EUR100m Jul 207 blockchain-based digital mortgage covered bond issuance (crypto security under German eWpG) which will follow two weeks of investor meetings that started Monday. The transaction is slated to be launched and priced on 2-Aug-2024, subject to market conditions, and is expected to be rated Aaa by Moody's
** In non-covered FIG, not even the more upbeat tone was able to tempt fresh supply to market, with the dry spell stretching to a third straight session to follow last Wednesday's EUR1bn 8NC7 SNP from Nationwide which reopened the market for UK names. That deal was the final instalment of a EUR5bn week for which demand totalled EUR13.2bn, suggesting that investors still have cash to put to work in an environment where opportunities in primary look set to be few and far between in coming weeks. Elsewhere, thoughts remain on earnings which step up pace in the next few days where Banco de Sabadell will report on Tuesday, followed by a further 8 members of the Stoxx banks index over the remainder of the week
IGM Credit Excel spreadsheets and reports
** The IGM European Weekly Credit Overview is your comprehensive round-up of primary European new issue activity including pricing, order book information, new issue concessions and ISINs
** The IGM European Weekly Cheat Sheet provides proprietary intelligence on Euro primary market trends using various key data points in an easily digestible Excel spreadsheet. This includes Euro new issue volumes, average new issue concessions and book cover ratios across asset classes, as well as other key credit proxies
Tuesday's primary prospects
Covered:
** Bendigo and Adelaide Bank Limited (A-/A-/Baa1) hired Barclays, Natixis and UBS Investment Bank on a EUR Long 5y Reg S (Bearer form) Soft Bullet Covered Bond transaction, backed by prime Australian residential mortgages. The Covered Bond is guaranteed by Perpetual Corporate Trust Limited and is expected to be rated AAA/Aaa
HY:
** Greenalia S.A mandate Clarksons Securities AS, Pareto Securities AS, and Nordea Bank Abp, filial i Norge on a EUR220m 5y senior secured green bond issue
** The IGM Roadshow Calendar is your one stop window on who, when and where. The calendar view provides an instant snapshot of which days are already earmarked for meetings in a convenient PDF format, with clickable links that take you directly to the known schedule
Monday's broader market developments
** EU stocks were on the up on Monday, bouncing back from last week's losses which saw cumulative 4.28% and 2.68% wiped off the Stoxx50 and Stoxx600 respectively after five straight days of losses. More mixed Asian session with Hang Seng seeing a tech led rebound, but mainland China stocks lower despite a 10bps reduction in China's 7-day Reverse Repo rate and one-year & five-year Loan Prime Rates as it looks to shore up its economy. US stocks also higher, appearing generally unfazed by President Biden's decision to drop out of the election race. Big week for earnings but a measured start with just a handful of Stoxx600 members reporting, including budget airline Ryanair which saw its share price drop up to 17.7% after weaker than expected profit and outlook
** Stoxx600 start the week on the front foot with a gain of up to 1.32%. All subsectors in the green, led by Tech
** Govvies: Low octane start to the week sees a slight out performance at the longer end of EGB curves, with BTPs also outperforming
** Data:
- US Chicago Fed Nat Activity Index higher than exp at 0.05 (f/c -0.09, prev rev to 0.23 from 0.18)
What to watch Tuesday - Bigger day for earnings
** Key Data: EC Jul P Consumer Confidence (15:00), US Jun Existing Home Sales (15:00) and US Jul Richmond Fed Manufacturing Index (15:00)
** Key Events: ECB's Lane speaks (08:00)
** Auctions: UK to sell GBP1bn 2039 Linkers (10:00), GE to sell EUR5bn 2026 Schatz (10:30) and US to sell USD69bn 2yr Notes (18:00)
** Earnings: 25 Stoxx600 and 34 S&P500 companies release results. Former includes Akzo Nobel & LVMH, whilst latter includes Tesla, Coca-Cola & General Motors
All times BST
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