Mischler IG Debt Market Comment 10-05-16 : TMCC; ECB; Economic Front
October 6, 2016   //   by Mischler MarCom   //   Debt Market Commentary  

Quigley’s Corner 10.05.16 Mischler IG Debt Market Comment


Investment Grade New Issue Re-Cap

Good News on the U.S. Economic Front This Week

Central Banks

Positive Developments Outside of Economic Data & Central Banks

Global Market Recap

A Look at FNMA Placement Statistics
Toyota Motor Credit Corp. Makes D&I History

IG Primary & Secondary Market Talking Points

Lipper Fund Flows

New Issues Prices

Indexes and New Issue Volume

IG Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab


Well, with tomorrow’s heavy calendar for economic data, it’s one last chance to pick up $6.5b in new issuance to match the syndicate midpoint average forecast for the week. We’re currently at $12.05b vs. $18.54b.  Today saw 5 IG Corporate issuers price 7 tranches between them totaling $3b with two SSA assists for an all-in IG day total of 7 issuers, 9 tranches and $4b. It’s good that I have good old reliable Tony Farren, my rates guru par excellence to rely on when I am out of the office.  Today is one of those days and I’ll tell you all about it in a moment.  First, a look at today’s market moving events reveals that Gallup’s Job Creation Index held steady in September for the fifth month in a row at +33.  That represents the highest score recorded since Gallup began tracking that metric in January 2008.

As Tony wrote today:
Good News on the U.S. Economic Front This Week


  • ISM manufacturing PMI moved back over 50 (51.5 from 49.4).
  • ISM non-manufacturing increased 5.7 points to 57.1 after a 4.1 point drop last month.
  • Cap goods non-defense ex-air increased for the 3rd month in a row (Aug +0.9%, July +0.8% & June +0.5%).
  • U.S. Employment Report – ??? (Friday morning).


Central Banks


  • BOJ – Last Friday the BOJ announced they will cut back on the amount of long end bonds it will be buying in an attempt to steepen the JGB curve.
  • ECB – Yesterday a Bloomberg article stated the ECB was considering tapering QE. Was it a bogus article or a trail-balloon from the ECB? Bonds in Europe have traded poorly this week.
  • Are we seeing a change in the way Central Banks are going to go about their business? If Central Banks are counting on help from the fiscal side I think they are going to be disappointed.

Positive Developments Outside of Economic Data & Central Banks


  • Crude oil higher – Crude oil has traded higher after an understanding was reached at last week’s informal OPEC meeting to discuss oil production cuts.
  • U.S. Congress passed a spending bill last week that averts a partial U.S. Government shut down.
  • Deutsche Bank – The sentiment concerning DB has improved substantially since the beginning of last week.
  • The hawkish Fed Speakers are warming up and starting to flex their muscles but they have a large hurdle to get over on Friday…US Employment Report!


Global Market Recap


  • U.S. Treasuries – had its 4th losing session in a row. Long end in Japan & EU hit.
  • 3mth Libor – Set at the highest yield since May 2009 (0.86794%).
  • Stocks – U.S. stocks with solid gains at 3:15pm.
  • Overseas stocks – Europe mostly down but bank stocks rallied. Asia was higher.
  • Economic – This week U.S. economic data has bolstered the Fed hawks case.
  • Currencies – USD weaker vs. 4 of the Big 5. Yen down for 7th session in a row.
  • Commodities – Good day for commodities as crude oil nearly rallies to 50.
  • CDX IG: -1.23 to 74.47
  • CDX HY: -4.64 to 402.28
  • CDX EM: -3.14 to 234.91

*CDX levels are as of 3:30PM ET today.

-Tony Farren


A Look at FNMA Placement Statistics

Thanks in advance to our own Annie “Agency” Bonner for the following information:




  • 40% Fund Mgr
  • 28% Commercial Banks
  • 11% Central Banks
  • 9% Insurance Companies
  • 7% Corporate/Pensions
  • 2% State/Local Govt
  • 2% Other
  • <1% Retail



  • 81% US
  • 11% Asia
  • 6% Europe
  • 1% Other
  • 1% ??


Once Upon a Time Four Years Ago or “Where It All Started”


Four years ago Zeeshan Naqvi, now with Moody’s Investors Service Inc., and formerly with GECC Treasury/Funding, paid a visit to Mischler to deliver GE’s annual report card of diversity broker dealer performance for 2012.  GECC’s diversity initiative offered the space the most coveted rotation for minority- women- and veteran- investment bank inclusion.  On that November day Mischler was told it finished atop GECC’s diversity broker dealers across their three main criteria:


  • Order Book Size
  • Quality of Orders
  • Final Allocations


The hour long meeting took place at our offices here at One Stamford Landing in Stamford, Connecticut.  While discussing our middle markets distribution network we suggested that Zeeshan and GECC meet our accounts for a non-deal roadshow.  He thought it was a great idea and soon enough Mischler was asked to conduct the first ever non-deal roadshow by a diversity firm for an issuer that just happened to be the most prolific at the time in our IG dollar DCM.  It resulted in a wonderful luncheon in Manhattan wherein 18 Mischler institutional accounts attended to hear GE’s story. Several took last minute flights on their own coin for the occasion…….that event advanced GE’s brand in the world of diversity in our financial services industry, and has been emulated by other global brands within the financial industry ecosystem…In particular, TMCC….


Toyota Motor Credit Corp.  (TMCC) Makes D&I History with Mischler-Sponsored Investor Luncheon Opportunity


Earlier today, TMCC’s Kate Oddo and Bill Pang conducted a non-road show investor luncheon/forum in NYC, with the goal of sharing and having open dialogue with existing and prospective institutional investors as to TMCC capital markets initiatives, and also sharing with the audience TMCC’s perspective about Diversity & Inclusion. BAML took the lead and hosted the event and Mischler was designated by TMCC as ‘co-manager’ in coordinating the day’s program, and we presented TMCC a total of 58 new accounts today.  12 accounts were represented in person with 46 dial-ins.  MFG clients that participated included insurance companies, re-insurers, managers of endowments, pensions, charitable trusts and foundations, RIA’s, SFOs, commercial banks, private wealth managers, private banks, trust company managers, fund managers for captive insurance and multi-family offices whose managed assets include some of the wealthiest people in the United States. To all of you accounts out there – you know who you are– you contributed to making history today, for moving the needle forward for D&I in an indelible way for our IG DCM, and for being there for the nation’s oldest Service Disabled Veteran broker dealer.

But most of all I and we would like to thank Toyota’s Kate Oddo and Bill Pang for their foresight to challenge us to be the best we can be with such a formidable.  This was a golden opportunity for Toyota to raise the bar for financial diversity broker dealers and investment banks.  We appreciate your meaningful focus to create a game-changing event for diversity and inclusion and for the thought leadership you both provided for Toyota, Mischler and our debt capital markets.  People have taken note of this.

IG Primary & Secondary Market Talking Points


  • Mischler Financial served as an active Co-Manager on today’s FNMA $3.5b 5-year Unsecured Notes new issue.  We thank the fine folks at Fannie Mae for including Mischler, nation’s oldest SDVBE in such a meaningful way.  Thanks also to all the accounts who gave us orders.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 7 IG Corporate-only new issues was 16.92 bps.
  • BAML’s IG Master Index tightened 1 bp to +141 vs. +142.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +138.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Global Fixed Income Research tightened 1 bp to +187 vs. +188.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $18.2b on Tuesday versus $12.4b Monday and $18.2b the previous Tuesday.
  • The 10-DMA stands at $15.9b.

 Ya Gotta Believe! Go Mets!

Have a great evening!


Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

Above is the opening extract from Quigley’s Corner aka “QC” Wednesday October 5 2016 distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest and largest minority broker-dealer owned and operated by Service-Disabled Veterans.

Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, the QC observations is one of three distinctive research content pieces produced by Mischler Financial Group. The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our fixed income trading and debt capital markets desk and includes a comprehensive “deep dive” with optics on the day’s investment grade corporate debt new issuance and secondary market data encompassing among other items, comparables, investment grade credit spreads, new issue activity, secondary market most active issues, and upcoming pipeline.

To receive Quigley’s Corner, please contact Ron Quigley, Managing Director and Head of Fixed Income Syndicate via email: rquigley@mischlerfinancial.com or via phone.

*Sources: Bank of America/Merrill Lynch, Bloomberg, Bond Radar, Dow Jones Newswire, IFR, Informa Global Markets, Internal Mischler, LCDNews, Market News International, Prospect News, Standard & Poor’s Ratings Services, S, Thomson Reuters and of course, a career of sources, contacts, movers and shakers from syndicate desks to accounts; from issuers to originators; from academicians to heads of research, and a host of financial journalists, et al.

Mischler Financial Group’s “U.S. Syndicate Closing Commentary”  is produced weekly by Mischler Financial Group. No part of this document may be reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.  “Mischler Financial” Group and the Mischler Financial Group.

Article:Mischler IG Debt Market Comment 10-05-16 : TMCC; ECB; Economic Front