The beginning and end of August proved to be busier than expected for credit markets.

Spreads remained steady and well supported throughout. Central bank rhetoric might have to begin to change as inflationary pressures continue to build. The Bank of England did move their goalposts somewhat as the base rate target was lowered from 1.5% to 0.5%, as the level at which they will begin quantitative tightening.

Berkeley Group gave a very strong and solid presentation to credit investors ahead of their inaugural issue into capital markets. The use of proceeds of their new £500MM 10-year sustainable issue has to be in building houses with high Energy Performance Certificates. It was hotly bid for attracting a book of £2.2MMM and pricing at Gilts +195bp against an IPT of +220bp, we received a fair allocation. Against this we sold our Enel sustainable linked 27’s note which had almost halved in spread from 100bp. We lightened up on some longer dated exposure, selling our Aster Housing 36’s and our Motability 41’s and also sold the last of our JP Morgan 33’s just inside issue price, these had priced tight at issue.

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