Fixed Income

With interest rates likely to remain low for the foreseeable future, investors continue to face the dilemma of how to achieve a good level of income while carefully managing their risk exposure.

Export Development Canada (EDC) priced USD 500 million 1.625% Fixed Rate Green Bond due June 1, 2020. The lead underwriters were HSBC, J.P. Morgan and SEB. This offering is scheduled to close on June 1, 2017.

The centrist candidate’s victory is seen as a positive for European stability, something which supports the global reflation trend that has been building up since last summer. Economic data in Europe, Asia and the US has been improving, underpinning traditional risk assets, such as stocks, and high yield and emerging market bonds.

According to Pascal Gilbert, Head of Fixed Income, La Française, Bond markets are facing historically low yields, and this ongoing situation leaves, in theory, little room for a further appreciation in bond prices.

According to BofA Merrill Lynch Global Research report Euro credit is currently 85% correlated by moves in OAT spreads now and French elections matter a lot for credit as there is Eur 410bn of French IG debt outstanding. So far French IG credits have widened 6bp since early Jan. But Italian credits widened over 35bp around the referendum...