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Primary: Pushing Too Far?

CREDIT SUPPLY
  • Recent primary exhibiting tight pricing, with zero or even negative NIP on many deals, with large orderbooks demonstrating ample demand.
  • Nonetheless pricing seems unusually aggressive even for this point in the cycle.
  • Secondary curves have been little affected before now, given the lack of NIP.
  • In contrast, BKNG is up to 12bp wider today. On the other hand, UCGIM NIP looks flat to negative again.
  • We note yesterday’s PLXFP trading wide to reoffer despite seemingly large order books. It makes sense to us to get more selective on primary here. MAERSK will be an interesting test case today (see earlier note).

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