Skydance Corp.’s high-grade bonds, issued Sept. 30, underperformed the broader market by 27 basis points within 10 days — the worst relative gap since April 2020, according to JPMorgan Chase & Co. Strategists led by Nathaniel Rosenbaum noted this was the largest divergence in six and a half years. Excluding Skydance, new issues actually outperformed by about 4 basis points. The bank warned that new bond performance has become less predictable this year, urging investors to assess potential lag risks despite tight spreads.
The selloff also explains why last week’s issuance fell well below dealer expectations, even with strong fund inflows and low rate volatility. JPMorgan compared the underperformance to April 2020, when average high-grade spreads were 2.7 times wider, calling last week’s results “far worse by comparison.”.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing