Global Credit: What We‘re Watching

Research evidence excerpt

Global Credit: What We‘re Watching

The moves Ellie Dann Strategist

were broadly similar across ratings and curves last week. US IG funds saw $2.3bn of net inflows last week, bringing YTD inflows to a record +$100bn. Primary Ellie.Dann@morganstanley.com

market activity was robust again, with $51bn of bonds pricing last week. YTD supply is tracking at $1,421bn (+36% YoY). +44 20 7425-2599

US Leveraged Credit: HY spreads widened by 6bp last week, resulting in excess returns of -0.1%. Loan spreads tightened by 3bp last week, delivering total returns

of 0.2%. In HY, CCCs underperformed, while single Bs held in better in excess return terms. Within loans, CCCs widened while BB and Single Bs tightened. Across Morgan Stanley Asia Limited+

HY sectors, insurance and energy outperformed, while transport and telecom lagged. HY funds saw outflows of -$400mn (-$2.3bn YTD), while loan funds saw net Kelvin Pang

inflows of $510mn last week (+$6bn YTD). HY and Loans recorded $4bn and $5bn of issuance, respectively, last week. YTD issuance now stands at $187bn (+17% Strategist

YoY) in HY and $232bn (-6% YoY) in loans. Kelvin.Pang@morganstanley.com

+852 2848 8204

EU Investment Grade: Europe modestly outperformed the US with spreads widening by 1bp, resulting in excess returns of -0.1%. The belly of the curve saw the

most widening last week, while performance was similar across ratings. Media and technology underperformed, while consumer goods and services held in better. Morgan Stanley & Co. LLC

EUR IG fund flows moderated to $533m (0.1% of AUM). Once again, both mutual funds and ETFs reported net inflows but at a slower pace compared to the prior Christina Sigler

week. Primary market activity slowed to €6bn of bonds issued last week, bringing YTD volumes to €467bn (+2% YoY). Strategist