Headlines:
- Primary market activity slowing with year-end approaching.
- Danske Bank upgraded to Positive Outlook by Moody’s.
- Introduction of the European single resolution mechanism.
- Counter-cyclical buffer introduced in Norway.
Market commentary
During the past week new issue activity has slowed markedly as the year-end is rapidly approaching with investors having become less active at the buying end of the market, and increasingly focusing on performance preservation. In the secondary market credit indices tightened slightly despite heightened market speculation about US tapering becoming imminent following this week’s surprisingly good employment report and Congress having struck a budget deal on Thursday. The budget agreement, which is expected to be passed next week, is positive for fiscal uncertainty; one of the factors that has been holding the Fed back. Aside from downbeat industrial production figures it has been a relatively quiet week in Europe without any major news from the ECB.
The slowing market activity has been evident in muted new non-financial corporate EUR issuance volumes of only about 15% of last week’s volume, a trend echoed in the Nordic markets. However, a few interesting issues appeared in the SEK market with the unrated first-time issuers Hoist Kredit and Tradedoubler raising SEK750m and SEK250m respectively. In Finlandm, first-time issuer Elenia (NR) raised EUR650m in two issues. Moreover, J. Laurtizen (rated ‘B’ by Danske Bank Markets) offered to repurchase its NOK700m 10.5% 2015 bond issue at a cash price of 105, against a closing cash price of 102.6 the day prior to the announcement. The acceptance deadline is 17 December 2013.
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