European credit default swap spreads were marginally tighter on Thursday, holding steady alongside equity markets, where a burst of M&A this week has helped bolster investor sentiment. By 1504 GMT, the investment-grade Markit iTraxx Europe index was at 86.94 basis points, according to data from Markit, 0.81 basis points tighter versus late on Wednesday.
The Markit iTraxx Crossover index, made up of 44 mostly "junk"-rated credits, was at 577.87 basis points, 1.13 basis points tighter. Investor demand for new issues remained robust, with Italy's biggest utility Enel's four-tranche bond issue worth some 6.5 billion euros attracting demand amounting to about 20 billion euros. "Supply continues to be heavy with a number of new issues in the post-summer pipeline," Barclays Capital credit analysts said in a note to investors.
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