High yield 4.194%Wi level at the time of the auction 4.216%Tail -2.2 basis points. The six month average -0.8 basis pointsBid to cover 2.69X. The six month average 2.64XDirect 23.64% versus the six month average of 21.4%Indirects 71.52% vs the six month average of 67.6%.Dealers 4.85% vs six month average of 11.0%.
Auction Details and Evaluation
Grade Justification: A
Why not A+? While all metrics are solid or better-than-average, the bid-to-cover was only modestly above average, not exceptional. A perfect score would typically require blowout figures across all categories.
Strengths: The deep tail, strong indirect and direct participation, and low dealer retention all point to very strong end-user demand — the market wanted this issuance.
Summary
This was a very strong auction with broad participation and pricing well through the WI. The only reason for not assigning a perfect “A+” is that the bid-to-cover wasn’t exceptionally high — just slightly better than average. Still, an A grade reflects excellent overall execution.
This article was written by Greg Michalowski at www.forexlive.com.