Credit comment 

Everyone’s talking about liquidity and the ensuing crunch from its lack thereof, but that has not stopped the new issue engine to keep steaming along. Probably, CFOs and Treasurers fretting over rate increases and moving to lock-in the last of the low rates – presumably to pay equity holders with dividends and share repurchases. And probably explains why credit spreads are weaker even as rates have backed-up. New issues dominated trade volume last week (RAIs, CSCO, Embraer etc). 
High yield still tracking “B” in yield averages (6.2% ish) while CCCs gave up some ground but still are tracking below 10%. “B” are also the best-performing sector in credit +3.6% YTD whereas Investment-Grade is negative.


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