Global Credit Comment:EUR,Weekly Credit Monitor

Light on issuance last week, Pemex issued ?4.5bn in three tranches

    EUR Issuance was very light last week. Overall, based on data from Dealogic, we saw atotal of ?8bn issued in the EUR IG space and none in EUR HY. Pemex was the biggestissuer and priced a total of ?4.5bn in three tranches. Of the ?8bn, only one issuance, at?0.6bn in amount outstanding, was CSPP eligible. YTD issuance has been dominatedby Financials, with ?38bn priced (~45% of total EUR IG issuance YTD), while Utilities &Energy and Telecoms are a distant second, with ?6bn notional priced each.

    European iBoxx Indices – Sector and Ratings Performance

    Overall, iBoxx EUR IG and HY tightened 1bps and 5bps respectively w/w, despite thevery light issuance supply. Peripheral spreads tightened (10Y Italian and Spanish yieldstightened 6bps and 5bps respectively vs. German 10Y) while 10Y French spread closedflat w/w on Friday at 74bps vs. German 10Y (10Y French spread was tighteningthroughout the week, but widened by 7bps on Friday). Within IG Index, Insuranceoutperformed by tightening 3bps, while Food & Bev and Telecos underperformed theindex by closing flat w/w. Within HY Index, all sectors with the exception of Financials(which was flat for the week) tightened, led by Utilities at 39bps w/w. CCC rated bondsin the EUR HY space widened for the second consecutive week, by 7bps w/w, aftertightening ~238bps since the start of the year.

    Leaders and laggards

    iBoxx EUR Corp Index: Erste Group Bank, Bayer and Orange outperformed, while PZUFinance, and Unilever bonds underperformed. iBoxx EUR Fins Index: Erste GroupBank, Atrium European Real Estate and Allianz led the outperformers, while PZUFinance, Achmea and Emirates NBD PJSC lagged the index. iBoxx EUR Non-finsIndex: Bayer, Orange and EDF outperformed, while Unliever bonds underperformed.iBoxx EUR HY Index: Agrokor DD and Marcolin SpA led, while Frigoglass Finance andInnovia Group lagged.