All insights
Lloyds Next Not to Call?
Earlier this year Santander became the first bank not to call its Additional Tier 1 (AT1 or ‘CoCo’) bonds at the first call date
The Problem With Gilts
Since the result of the UK referendum in June 2016 there has been a noticeable ‘Brexit-premium’ associated with most sterling denominated assets.
Supply Slowdown Points to CLO Performance
At the end of Q1 we were surprised by the solid pace of supply in CLOs, especially considering the challenging arbitrage dynamics facing issuers.
Markets are Still Fighting the Fed on Rates
Last Friday’s strong US GDP reading for the first quarter has sparked several days of debate between TwentyFour portfolio managers. The 3.2% reading was 100bp ahead of consensus, so a strong beat at the headline level, but the components accounting for it, such as inventory building, suggested the figure was an aberration and likely to reverse in Q2.
Thoughts on EM
Emerging Market (EM) bonds have had a good year so far. While they are not at the very top of the performance table, the hard currency CEMBI (Corporate Emerging Markets Bond Index) is up 5.69% in $ since the start of the year, and the EMBI (Sovereigns) is up 6.32%; not bad at all.
Capital, Calls and Comfortable Coupons
The cycle of banks calling outstanding capital bonds continued this week and we’ll soon be bidding fond farewells to two of our long held and favourite positions; Nationwide’s 6.875% Additional Tier 1 (CoCo) and Barclays’ 14% hybrid Tier 1.