Highlights from the Week in Corporate Credit:
November 18 – 22, 2019

Global credit edged weaker and stocks snapped their six-week winning streak following increased international tensions around Hong Kong protests and a lack of meaningful progress on US-China trade talks. US credit spreads widened by 3-5 basis points as new issue supply continues to be strong in the 4th quarter. Despite the recent weakness, US investment grade credit continues to enjoy a positive November even as high yield markets drop into negative territory.  The coming week will see reduced supply as trading volumes fade into US Thanksgiving on Thursday.

Canadian credit largely shrugged off the negative market tone to finish 2-3 basis points tighter on the week. The outperformance was partially technical in nature as both EnerCare and Thomson Reuters announced tender offers for a combined $1.3 billion of debt.  As these bonds are retired early the resulting cash will need to be put to work back in the market.  On the primary issuance front, CAD 1.8 billion of new corporate debt priced. Of note, First National Financial priced $200mmm of a 5-year senior at G+210. The bond generated significant demand from a range of investors, finishing the week 8 bp tighter.