I'm not seeing a ton of focus on this in the credit markets yet but the CRB hit 6+ year lows yesterday.
Yesterday's $20B+ in new issuance (ex FDIC gtd) in investment grade debt was the highest 1 day total ever. Roche issued $16B across 6 tranches. While the deal came 'cheap' to existing secondary spreads, all tranches this morning are 30-50bps tighter than issued spread. If I were the Roche treasurer, I'd inquire about the ~$60 million they left on the table. Sometimes, if you want the deal to sell quickly, that's the price you pay.
Lipper data showed $14B in inflows into bond mutual funds in January. This obviously drove the enormous demand for new issues last month.
Bank of America made the first TARP payment back to the government....granted it was only $402mm of the $45B they received but it's notable nonetheless.
The "Big Bang" for CDS is coming soon. The governing body, ISDA, is about to propose a set of rules in advance of the eventual move to a central clearinghouse. We should see the full proposal well ahead of the March 20th quarterly roll. JPMorgan is predicting fixed coupons (either 100 or 500bps) and the elmination of ModR in favor of NoR. When the proposal is released, I will write a separate piece about it. In the meantime, if you have granular questions, please send them to me.
There are 3 primary competitors right now for the CDS clearinghouse.....ICE, NYSE/Euronext, and CME/Citadel. ICE seems to have the most dealer support....and as I've said before, you cannot have liquidity without capital.
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