New issue premiums have all but vanished from European bond markets, as well as the dollar market for supranationals, sovereigns and agencies, with borrower after borrower ramming pricing down to its curve — and in some cases, way through it. Everyone knows it will end at some point, but for now, investors are offering no resistance — in fact, they are chasing deals tighter. By Jon Hay, Burhan Khadbai, Mike Turner and Tyler Davies
Spreads are not yet at their tightest levels ever, but for many issuers they have narrowed back to where they were early last year, before the sell-offs that rocked markets in the second half of 2018.
And in combination with newly depressed government bond yields, after both
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