Commentary

Our insights into Canadian and global credit markets are key to our investment process.
Visit this page every week to stay up to speed on what’s happening in credit.

OUR LATEST HIGHLIGHT IN CORPORATE CREDIT

Highlights from the Week in Corporate Credit:
April 5 – 9, 2021

Global credit held firm last week as macroeconomic optimism offset concerns over corporate tax hikes. US investment grade spreads hovered near recent tights as most sectors finished +4 to -1 bp for the week. TMT and Industrials underperformed following their massive rally last month. Interest rates stabilized after the Fed minutes maintained their dovish tilt and emphasized the economic recovery was not yet complete, downplaying concerns of impending inflation even as PPI numbers released on Friday suggested otherwise. Primary issuance was underwhelming, with just $16bn of new corporate bonds announced. Most deals came with little concession, and after-market performance was somewhat lacklustre.

Canadian credit outperformed with spreads tighter by as much as 5 basis points. Autos, REITs and Utilities all outperformed thanks to successful new issues, which caused secondary spreads to narrow. In contrast to the U.S., it was a busy week as eight new deals were launched, totalling $3.5 billion. Foreign issuers continue to find Canadian financing attractive, with Heathrow, Athene and New York Life all bringing deals to market. The deal of the week came from Summit Industrial REIT, a 250mm 6-year “green” bond which priced at +118 over Canadas and traded as much as 6 basis points tighter on the break.

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