Highlights from the Week in Corporate Credit:
August 5 – August 9, 2019

Credit spreads widened last week as US- China trade tensions continue to dominate headlines.  Escalating rhetoric from both sides with threats of new tariffs sent treasury yields to new lows for the year and US investment grade spreads 5-10bp wider across most sectors. Prices on Italian debt fell as the country appears headed for yet another early election. Despite the soft tone, issuers rushed to take advantage of low yields with 22 new corporate bonds priced last week for a total of $36bn. Occidental Petroleum ($OXY) was a highlight of the week bringing a $13bn bond deal to finance its merger with Anadarko Petroleum.  The deal priced with an attractive concession and traded well throughout the week.

Supply was the main driver of Canadian credit markets, with spreads 5-10 basis points wider amid one of the busiest weeks of the year for new corporate bonds.  Issuers focused on attractive all-in coupons and were happy to pay larger spread concessions to get deals done.  Most new deals finished the week hovering near new-issue spread, while secondary spreads pushed wider in anticipation the heavy supply may continue.

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