by Kevin Hanly
US CDS spreads continued to tighten on Monday, albeit in somewhat
lacklustre trading, although equities had a rather subdued session as
improving sentiment towards the periphery countries in the eurozone was
insufficient to drive indices higher in the absence of any real
newsflow.
Today has seen European stocks drift lower with the oil & gas and
utilities sectors limiting losses across the indices, although in light
turnover. Government bond spreads over bunds for the peripheries are a
tad wider, as are CDS spreads across the region. Credit markets are
having an equally as lacklustre morning with the benchmark iTraxx Xover
index around 12 bps wider trading at the 423 bps level.
US CDS spreads look likely to open on the back foot, especially as
futures are currently pointing to a moderately negative open for US
stocks this morning.
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CORPORATE HEADLINES
FINANCIALS
-- Marsh McLennan, the global insurance broker and consultancy company,
has put its corporate investigations division Kroll up for sale for
about $1.3 bln and attracted plenty of private equity interest in
first round bidding - FT.
-- Prudential plans to list in Honk Kong ahead of its $20 bln rights
issue, in a surprise move that could encourage local investors to
buy the life assurer's shares in support of its $35.5 bln agreed deal
to acquire AIA, AIG's Asian business - FT.
-- American International Group and MetLife agreed to a widely
anticipated, $15.5 billion deal for AIG's second-largest foreign
life-insurance business - WSJ.
-- Moody's Investors Service said the expected wind-down of the UK's
banking bailout programs could trigger ratings downgrades of some
British lenders' bonds - WSJ.
-- Credit Suisse Group said it doesn't accept new funds from wealthy
clients seeking to circumvent their home tax authority - WSJ.
AUTOS
-- Daimler has completed its exit from Tata Motors Ltd., India's largest
auto maker by revenue, by selling its 5.34% stake in the company, as
the German vehicle manufacturer prepares to go it alone in the
rapidly growing Indian market for trucks - WSJ.
TMT
-- Cable & Wireless's UK business is stepping up its hunt for growth in
emerging markets, particularly in Asia, as it secures a stock
market listing later this month - FT.
-- Texas Instruments raised the bottom end of its first-quarter forecast
as the period is coming to a close, helped by growth across several
markets, including analog and embedded chips - WSJ.
-- Cisco, a component of all three major indexes in the US, climbed
3.7%, ahead of a technology announcement it set for Tuesday. Traders
expect that Cisco will show how it can help telecommunications
companies boost their Internet speeds to meet growing user
demand - WSJ.
BASIC MATERIALS
-- Antofagasta has reported that full-year net income fell by 61% to
$667.7 mln versus $1.71 bln last year on lower output and prices.
INDUSTRIALS
-- EADS has reported a full-year net loss of E763 mln versus a profit of
E1.57 bln last year, on additional charges for its A400M military
plane project.
-- US defence contractor Northrop Grumman pulled out of the
multi-billion dollar contest to replace the US Air Force's fleet of
refuelling tankers, dealing a blow to EADS, its European partner on
the project - FT.
CONSUMERS
-- When the second-biggest mall owner in the US was tumbling toward
bankruptcy near the end of 2008, a handful of investors dug to
the bottom of the discount bin and snapped up the company's
convertible bonds at three cents on the dollar. Today, these General
Growth Properties Inc. bonds are worth 103 cents, one of the great
trades of the financial crisis - WSJ.
SOVEREIGN
-- Radical plans for a European version of the IMF to bail out
crisis-hit countries would need a new treaty and the agreement of
all European Union member states, Angela merkel, Germany's
chancellor, has warned - FT.
OTHERS
-- The technology bubble popped a decade ago, but the venture-capital
industry that helped finance the boom stayed largely intact. Now
venture-capital firms are going through their own brutal culling -
WSJ.
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US CORP/AGENCY/$EURO NEW ISSUES - MARCH 9, 2010 15:49 EDT / Mar 08
(#) Launched or (*) Priced (Investment Grade $250M+) (e) Estimate
========DEALS TO ANNOUNCE OR PRICE WEEK OF MARCH 8, 2010=======
$40B Treasury 3Y - Auction Tuesday
$380M GA Muni Elec Auth Baa2/A- Taxable Revs 2057 BABs Tuesday GS
$300M NYC Muni Water Aa3/AA+ Taxable Revs 2042 BABs Guid +133area Jef
$100M NYC Muni Water Aa3/AA+ Taxable Revs 2042/NC10 BABs Jef
Guid +181 area (+/- 2bps on both)
$3B(e) Fannie Mae Benchmark Note - Announce Wednesday/Price Thursday
$250M NYS Thruway Auth Taxable Revs 2030 Term BABs In Week RBC
$21B Treasury r/o 10Y - Auction Wednesday
$13B Treasury r/o 30Y - Auction Thursday
$660M(e)CSX Corp(CSX) Baa3/BBB- 144A Senior 6.22% due 2040
$Bnchmk Hyundai Motors(HYNMTR) Baa3/? Global 5Y BAML/Barc/C
Monday - March 8
$2.5B #Bk of America Corp(BAC) A2/A Global 5Y +215 BAC
$1.2B #DirecTV Holdings(DTV) Baa3/BBB- 144A 5Y +120 Barc/C/JPM/UBS
$1.3B #DirecTV Holdings(DTV) Baa3/BBB- 144A 10Y +150 Barc/C/JPM/UBS
$500M #DirecTV Holdings(DTV) Baa3/BBB- 144A 30Y +167 Barc/C/JPM/UBS
$750M *BNP Paribas(BNP) Aa2/AA Senior 5Y +97 BNP
$610M *CME Group(CME) Aa3/AA 144A/RegS Senior 8Y +130 BAML/Barc/UBS
$750M *Ameriprise Financial(AMP) A3/A Senior 10Y +162.5 CS/GS/MS
$500M *Hasbro Inc(HAS) Baa2/BBB Senior 30Y +170 BAML/C
$400M *So Cal Edison(EIX) A1/A 30Y FMB +90 C/CS/JPM/RBS
$700M *Shinhan Bank(SHNHAN) A2/A- 144A/RegS 5.5Y +205 BAML/BNP/C/DB/MS
$2B *Bank of England(BOEN) Aaa/AAA 144A/Reg-S 3Y +32.4 Barc/BNP/GS/JP
$600M *DCP Midstream(DCPMID) Baa2/BBB 144A/RegS 10Y +165 JPM/RBS/Sun
$350M *GE Capital(GE) EMTN 4Y +178.7 DB/UBS
$1.5B *Toronto Dominion Bk NY(TD) 1Y FRN YCD 1ML Flat TDSec
$250M *Royal Bk Canada NY(RY) Aaa/AA- 1Y FRN YCD 1ML Flat RBC
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MACRO EVENT RISK AND SPEAKERS
US data starts at 1245GMT with the weekly ICSC-Goldman Store Sales data,
which is followed by the weekly Redbook Average at 1355GMT.
Today in the US, President Barack Obama meets with Greece Prime Minister
Papandreou at the White House, although scheduled US speakers start at
1430GMT, when Chicago Fed President Charles Evans delivers a speech to
the NABE annual policy conference in Arlington, Va.
US data then continues at 1500GMT with the IBD/TIPP Economic Optimism
Index, while late data sees the 2000GMT release of Treasury Allotments
By Class as well as the 2200GMT release of the weekly ABC News Survey.