The RBA Monetary Policy Board increased the cash rate by 0.25% to 4.10% yesterday as predicted by most economists. According to Adam Bowe of PIMCO, the Board’s vote was close and not the slam dunk markets expected. Bowe compares past shocks to this one and highlights one sub sector where they now see considerable value.
The Middle East conflict continues and while the RBA Governor, Michele Bullock said that it didn’t influence the decision to hike, it is a major concern. We publish three related articles:
- For an Australian perspective, read FIIG Securities’ Philip Brown’s article. Brown says that we need to be prepared for more risk everywhere.
- How long will the crisis last? Daleep Singh from PGIM outlines the scenarios and gives us some timelines. This is a really insightful article.
- Seema Shah from Principal Asset Management says the bond and equity markets are telling different stories
US private credit redemption stories and limitations keep piling up, but there are positive sub sectors, as Lotfi Karoui and Gabriel Cazaubieilh from PIMCO highlight.
AI growth and investment remains as if there’s no war, companies can’t afford to lose momentum and allow competitors to beat them. Amazon raised US$50 billion this week.
We also present a series of fixed income and currency macro viewpoints from Insight Investment’s lead portfolio managers.
NBN broke the absent new issuance market after the start of the Middle East conflict, see the details below, along with new issues from Dalrymple Bay and Verizon:
- Dalrymple Bay raised $350m in a five year senior secured fixed rate note with a margin of 160 basis points over semi quarterly swap at a 6.234% issue yield
- NBN raised $850m in its first sustainability bond which was senior unsecured and fixed rate, which priced at 100 basis points over semi quarterly swap at a 5.884% issue yield
- Verizon raised $1.3 billion in a three tranche subordinated note deal –
- $800m from a 30.5-year, non-call 5.5-year floating rate tranche (30.5NC5.5) paying 3-month BBSW + 205 basis points
- $250m from a 30.5NC5.5 year fixed to floating rate tranche with a 6.745% issue yield
- $250m from a 30.5NC10.5 year fixed to floating rate tranche with a 7.166% issue yield.
Have a great week!
