Commentary

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OUR LATEST HIGHLIGHT IN CORPORATE CREDIT

Highlights from the Week in Corporate Credit:
June 22 – 26, 2020

Risk assets took a step back this week as a surge in COVID-19 cases across select US states cast doubt on the path of the recovery. Southern states, including Texas, Florida and Arizona, were particularly in focus with spikes in positive testing that led the US to new highs for daily case growth. As a result of the increase in cases, Florida and Texas announced plans on pausing their reopening, sparking concerns that the US opened too quickly. US credit widened by about 10 bp this week, with autos underperforming (+25). New issue activity slowed down considerably ahead of the holiday-shortened week, finishing around $25bn. New issue concessions rose slightly with moderate performance of most deals. The deal of the week was an inaugural bond sale from business software company Intuit. The $2bn multi-tranche deal generated significant demand with a strong A- rating, finishing the week 4-5 bp tighter.

Canadian credit finished the week broadly unchanged as COVID cases remain under control in Canada. This week saw $2.4bn of primary supply, with the bulk of the issuance coming from RBC’s $1.25Bn sub-debt issue. Also of note was Gibson Energy’s first bond financing since being upgraded to investment grade. The deal was well oversubscribed and finished the week 10 bp tighter.

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