US Election + FOMC Angst = Gold Rally; Mischler Debt Market Comment
November 1, 2016   //   by Mischler MarCom   //   Debt Market Commentary  

Quigley’s Corner 11.01.16 : US Election + FOMC Angst = Gold Rally


Investment Grade Corporate Bond New Issue Re-Cap  – U.S. Election and Fed Anxiety Send Gold and Sfr Up

Global Market Recap

IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates for This Week

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending October 26th  

Investment Grade Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar


November kicked off today with 6 IG Corporate issuers pricing 7 tranches between them totaling $2.65b.  We are two days into the week and yet we’ve only priced $6.975b or 27% of the weekly syndicate forecast of $25.13b.  Election jitters and tomorrow’s FOMC Rate Decision sent the DOW down 105 points and the S&P off 15.  It’s probably a good thing that tomorrow’s Fed meeting is not followed by a summary of economic projections and a press conference by Chair Yellen.  When gold and the Swiss franc rise it means investors are uneasy, skittish and edgy about something.  In our inextricably linked new world economy, replete with myriad global event risk factors, today’s catalyst has everything to do with the U.S. Presidential election.  The VIX pushed out 1.5.  CDX HV gapped out 7.15. Gold was up $16 and the Swiss franc gained 1.36% on the USD.……..In financial terms, that spells …“A-N-X-I-E-T-Y”


Global Market Recap


  • U.S. Treasuries – USTs closed with a gain & had a very impressive rally from the low prices.
  • Overseas Bonds – JGB’s had small gains. Bonds in Europe traded poorly.
  • Stocks – Down day for stocks in the U.S. & Europe while Asia rallied.
  • Economic – U.S. data had more good than bad. China PMI data was very strong.
  • Currencies – USD lost ground vs. 4 of the Big 5 & the DXY Index was hit hard.
  • Commodities – Crude oil small loss, natural gas down and gold & silver were bid.
  • CDX IG: +0.812 to 79.52
  • CDX HY: +8.04 to 430.71
  • CDX EM: +5.62 to 247.84

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

-Tony Farren


IG Primary & Secondary Market Talking Points


  • Kimco Realty Corp. upsized today’s 2-part 7s/30s Senior Notes new issue to $750mm from $600mm at the launch and at the tightest side of guidance on both tranches.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 7 IG Corporate-only new issues was 17.71 bps.
  • BAML’s IG Master Index widened 1 bp to +138 vs. +137.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +132.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Global Fixed Income Research widened 1 bp to +183 vs. +182.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $15.9b on Monday versus $14.3b Friday and $14b the previous Monday.
  • The 10-DMA stands at $16.7b.


Syndicate IG Corporate-only Volume Estimates for This Week and October


IG Corporate New Issuance This Week
vs. Current
WTD – $6.975b
October 2016 vs. Current
MTD – $6.975b
November 2016
Low-End Avg. $24.26b 28.75% $87.83b 7.94% $90.70b
Midpoint Avg. $25.13b 27.76% $88.59b 7.87% $92.11b
High-End Avg. $26.00b 26.83% $89.35b 7.81% $93.52b
The Low $15b 46.50% $75b 9.30% $71b
The High $35b 19.93% $125b 5.58% $110b


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.

Have a great evening!
Ron Quigley, Managing Director and Head of Fixed Income Syndicate


NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches


Here’s a review of this week’s key primary market driver averages for IG Corporates only through Monday’s session followed by the averages over the prior four weeks:

WEEK 10/24
WEEK 10/17
WEEK 10/10
WEEK 10/03
New Issue Concessions 0.50 bps <0.51> bps 3.31 bps 1.87 bps 4.36 bps
Oversubscription Rates 2.99x 2.61x 3.05x 3.28x 4.20x
Tenors 8.39 yrs 7.77 yrs 9.16 yrs 11.51 yrs 12.16 yrs
Tranche Sizes $721mm $818mm $1,137mm $640mm $523mm
Avg. Spd. Compression
IPTs to Launch
<14.21> bps <17.42> bps      


New Issues Priced

Today’s recap of visitors to our IG dollar Corporate and SSA DCM:

Above is the opening extract from Quigley’s Corner aka “QC” Tuesday November 1, 2016 edition 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: 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.

Quigley’s Corner 11.01.16 : US Election + FOMC Angst = Gold Rally