Not much is making sense at the moment, with wars, starvation, riots, tariffs, and now the possibility of additional tax on foreign investment flows into the US. Benoit Anne from MFS Investment Management, cuts through with his analysis on the additional tax and tariffs and suggests the need for higher US risk premiums. This is an excellent article and well worth reading.
I was fortunate to interview Matthew Nest, Global Head of Active Fixed Income at State Street Global Advisers last week. Nest runs through where they see value and how they incorporate current global risks into asset allocation.
Seema Shah from Principal Asset Management also attempts to cut through the noise, with a list of 10 considerations, with number one being that the US is a resilient economy, but growth headwinds are building, through fiscal stimulus, bond market tensions, equity risks to a dollar under pressure and the implications for investors.
Finally, we publish T. Rowe Price’s midyear outlook for Australian investors.
There is plenty happening in the domestic over-the-counter market. Here’s some of what’s new over the last few weeks:
- NextEra Energy launched a 30-year, non-call 5 (30NC5) transaction with a fixed-to-floating tranche and a floating rate tranche. Price guidance 265bps over semi quarterly swap
- Barclays launched multi-tranche callable notes as follows:
- 6NC5 tranche, fixed to floating with price guidance of 175bps over swap
- 11NC10 tranche, fixed to floating with price guidance of 210bps over swap
- Melbourne Airport raised $1 billion in a two-tranche subordinated note deal. The issue was four times oversubscribed with final bids of $4.1 billion.
- Floating rate note tranche 30NC5.25 at 3 month BBSW + 205bps
- Fixed to floating rate note tranche 30NC7.25 at 3 month BBSW + 220bps and a 5.95% coupon
- Volkswagen raised $500m in a four-year senior unsecured bond at 173bps over semi quarterly swap or a coupon of 5.108%
- Judo Bank raised $175m in a floating rate, three-year, senior unsecured deal. Pricing was 3 month BBSW + 145bps
- ING raised $1.75 billion in a senior secured, three and five-year floating rate deal
- Three year at 3 month BBSW +80bps
- Five year at 3-month BBSW +95bps
- Banque Populaire Caisse d’Epargne (BPCE) raised $1.5 billion in a senior preferred deal and a 15NC10 Tier 2 bond.
- A fixed rate tranche at 4.7638%, worth $300m
- A floating rate tranche at 125bps over semi quarterly swap, worth $700m
- A 15NC10 Local Economic Development social tranche subordinated, fixed to floating rate notes at a 6.5618%, worth $500m
- CBA raised $1.5 billion in a 10.25NC5.25-year, subordinated Tier 2 deal
- A floating rate tranche at 3-month BBSW +170bps, worth $1.1 billion
- A fixed-to-floating rate tranche at an issue yield of 5.2552% worth $400m.
Have a great week!
