As expected, the commencement of military action has dimmed the pace of activity in the primary market and last week generated the lowest volumes all year. There was just $4 billion of investment-grade issuance over the week and this was notably more biased toward the upper rating categories than we have seen in recent weeks. However, the high yield sector was not shut out and $1.3 billion of junk deals were in the market as well as several convertible issues. Overall, March has seen a better than anticipated performance from the corporate sector. The market has absorbed $44 billion in new supply during the most heightened period of war-related uncertainty and significant volatility in both the equity and treasury markets. Yet against this backdrop spreads have remained stable. Investment grade spreads are five basis points tighter than at the start of the month and high-yield spreads have ground in by 55 basis points.
Analysis by CreditSights, Inc., an independent online credit research platform. Call (212) 340-3888 or visit www.CreditSights.com for more information.