facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Weekly Fixed Income Views from February 26, 2021 Thumbnail

Weekly Fixed Income Views from February 26, 2021

Rates Market

  • The US Treasury market experienced steep losses this week as the selloff brought treasury yields to recent highs heading into month-end.
  • The 10-year yield remains more than 12 bps higher on the week, trading today in the middle of the range of 1.37% to Thursday's high of 1.61%.
  • The spread between the 5-year note and 30-year bond rose to a high of 163 bps on Wednesday, recovering back to 141 bps today.
  • The $62.0 billion seven-year note auction tailed 4 bps with at a yield of 1.195%, showing very weak demand and one of the worst auction tails in its history.
  • Friday’s economic releases pointed to growth in U.S. personal income, with consumer spending rebounding up 2.4%. Market sentiment remains focused on inflation trends and the stimulus package out of D.C.

Source: Bloomberg.

Corporate Market

  • The corporate spread week-to-date for the USD Investment Grade All Sector OAS was wider by +6 bps.
  • The USD Investment Grade All sector OAS index is back above 90.
  • Investment grade funds recorded $4.22 billion in inflows.
  • High Yield funds reported $2.22 billion in outflows.
  • Primary issuance year-to-date: $237.5 billion (+8% year-over-year)
  • Primary issuance month-to-date: $109.9 billion
  • Primary issuance week-to-date: $33.45 billion vs projected $30 billion-$40 billion.


Source: Bloomberg.

Corporate New Issue Highlights

  • Truist Financial priced $1.25 billion 6NC5 Fxd-to-FRN
  • $1.25b 6NC5 Fxd-to-FRN (March 2, 2027) at +50
  • Daimler Finance priced $3 billion in 3-parts
  • $1.5b 3Y Fixed (March 1, 2024) at +48
  • $1b 5Y Fixed (March 2, 2026) at +70
  • $500m 10Y Fixed (March 2, 2031) at +95
  • Bank of Nova Scotia priced $1.25 billion in 2-Parts
  • $950m 5Y Fixed (March 2, 2026) at +47
  • $300m 5Y FRN (March 2, 2026) at SOFR+54.5

Muni Market

  • Municipals took a bit of a breather on Friday after a 2-week slide from record levels with benchmark yields 3-28bps higher on the week, underperforming Treasuries.
  • On a relative value basis vs Treasuries, municipal ratios remain low, but have moved closer to longer-term averages. 
  • Municipal funds saw just $38 million in inflows for the week after $1.8 billion the week prior,  a sharp decline and a possible beginning of an outflow cycle after 16-straight weeks of inflows driving municipals to record highs.
  • Yields on primary issuance were repriced higher in order to attract investors as Treasury yields marched higher.
  • Next week, state and local governments expect to issue $6.51 billion. Notable deals include; New York City $1.45 billion, Baltimore County MD $658 million, NYC Municipal Water Finance Authority $573.2 million, Bay Area Toll Authority $569.9 million.

Source: Bloomberg.