Browsing articles in "News and Information"
Fortune CEOs Vote With Their Feet and “Take the High Road”
August 2017      Debt Market Commentary   

Quigley’s Corner Debt Market Comment- 08.16.17- Fortune CEOs On President Council(s) No Longer Ask “Should I Stay or Should I Go?”-Trump Says “You’re Fired!” Minutes Before Planned En Masse Resignations

“We here in America, hold in our hands the hope of the world, the fate of the coming years; and shame and disgrace will be ours if in our eyes the light of high resolve is dimmed, if we trail in the dust the golden hopes of men.” -Theodore Roosevelt

Below is the opening extract from Quigley’s Corner aka “QC”  Wednesday, Aug 16 2017  weekend edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest 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  provides objective debt capital market and investment corporate debt commentary and geo-political analysis, it is one of three distinctive market comment pieces produced by Mischler Financial Group.The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our investment grade 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 email: rkarr@mischlerfinancial.com or via phone 203.276.6646


Investment Grade New Issue Re-Cap-
WTD and MTD IG Corporate Volumes Now Both Eclipse Syndicate Forecasts

Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and August

Fortune CEOs Hold the Trump Card – “QC” Commentary

Knowing the Past for the Future” – A Look at a Decade’s Worth of September IG Corporate and SSA Issuance

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 August 9th               

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

Rates  Trading Lab

Tomorrow’s Calendar

Investment Grade New Issue Re-Cap – WTD and MTD IG Corporate Volumes Now Both Eclipse Syndicate Forecasts

Today’s IG Corporate dollar DCM hosted 3 issuers across 6 tranches including VMware’s $4bn three-part across 3s, 5s and 10s for day total of $5.75b.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

  • The IG Corporate WTD total is now 107.25% of this week’s syndicate midpoint average forecast or $28.85b vs. $26.90b.
  • We eclipsed the average syndicate forecast for August IG Corporate-only volume having priced 118.11% or $93.425b vs. $79.10b.
  • There are now 5 issuers in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points

  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 6 IG Corporate-only new issues, was <23.46> bps.
  • BAML’s IG Master Index tightened 1 bp to +114 vs. +115.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 1.10 vs. 1.11.
  • Standard & Poor’s Investment Grade Composite Spread tightened 3 bps to +157 vs. +160.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $15b on Tuesday versus $12.5b on Monday and $17b the previous Tuesday.
  • The 10-DMA stands at $15.3b.

 

The “QC” Geopolitical Risk Monitor – Addition to the “High Alert” Risk Table Comes Fast & Furious

 

Risk Level/Main Factor Geopolitical Risks
HIGH
1.) Break Between Corporate America & Trump Admin.

2.) North Korea

 **HIGH RISK EVENT ADDITION** – Members of Trump’s Strategic and Policy Forum have made a joint decision to disband the group. Trump agreed to disband his Manufacturing Council as a result.  When an event negatively impacts a company’s public perception it is “game over.” Corporate America’s business leaders are now abandoning Trump. This in response to the President’s replies to the riot that took place in Charlottesville, VA. over the weekend in which one person was killed and dozens injured. Without corporate support, GOP will not coalesce to promote Trump’s agenda.

Monday 8/31 begins joint U.S. & S. Korean military exercises. It is the world’s largest computerized command control implementation and will involve over 80,000 U.S. and South Korean troops.
CIA Director Mike Pompeo cites U.S./NOKO tensions have subsided saying “We’re not closer to war than a week ago, but we are closer than we were a decade ago.” Rhetoric reached height on Friday 8/11 w/ Trump saying “U.S. military solutions are in place, locked and loaded” matching his earlier statement this week that “North Korea best not make any more threats to the United States or they will be met with fire and fury like the world has never seen.” Russia’s Foreign Minister Lavrov says his country “does not want to see North Korea with nuclear weapons.” On Th. 8/10 NOKO announced its plan to “pre-emptively strike on Guam in mid-August.” Trump’s reaction, “Maybe my ‘fire and fury threats weren’t strong enough!” N. Korea launched an ICBM on 7/28. NOKO’s Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population).  NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has failed. China insiders say PRC does not have the influence with NOKO that the U.S. thinks it does. U.S.’s NOKO strategy quickly changing from containment on the Korean peninsula to defending the Hawaii, Alaska and the continental United States and more offensive in nature. NOKO adding miniature nuclear warheads to its ICBMs. Asian allies now justified to build up militaries. China in precarious position given South China Sea Islands.

ELEVATED
BREXIT Fallout
Pakistani Prime Minister Nawaz Sharif was ousted for his role in a corruption scandal. He selected his brother Shahbaz to take over. Many geopolitical strategists point to the India/Pakistani border conflict as one of if not the most volatile. Both are nuclear capable.

U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent. Companies prepping for hard BREXIT & 2 years of weak growth.

CAUTION
“U.S. political gridlock”
Trump financial, tax and infrastructure reform challenges & consensus GOP support to pass legislation in doubt after repeal and replace defeat. Dems revamping & revising their message.Mueller expanding FBI probe into Trump. Congress and Senate back in session on Tuesday, September 5th following August recess. Increasingly tense political environment.

On June 15th U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions against Russia in 98-2 vote. Iran launches missile into space in response on 7/28.  U.S. levies additional sanctions on Iran in response to launch.

June 9th: GCC Crisis as Saudis, UAB, Egypt, Bahrain & 5 others cut diplomatic ties with Qatar; Land, air and sea blockade. Demands include closing its Al Jazeera network & a Turkish military base,

severing ties w/Muslim Brotherhood, Hezbollah, al-Qaeda & ISIS.

Despite destroying the Caliphate, ISIS is now scattered across a wider MENA region and Europe.

Cybercrime, ransomware, viruses & hacking are winning cyber wars. Recent attacks have hit four continents, law firms, food companies, power grids, pharma & gov’ts (Ukraine & Russia).

Central banks shrinking balance sheets/higher volatility; low rates persist; slow inflation pick-up.

Venezuela – civil unrest continues against Maduro dictatorship. U.S. Tsy freezes Maduro family assets. Trump considering more than mere sanctions and “won’t rule out military option.” Risk of VZ default.  4th largest exporter of oil to U.S. behind Canada (#1), Saudi Arabia (#2) & Mexico (#3).

MODERATE China hard landing: rising corporate debt & slower GDP growth are OECD and IMF concerns.
MARGINAL
2018 U.S. Recession
Increased chance of 2018 U.S. recession; “maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns. Market expecting unwind announcement by Fed in September.

 

Syndicate IG Corporate-only Volume Estimates This Week and August

 

IG Corporate New Issuance This Week
8/14-8/18
vs. Current
WTD – $28.85b
August 2017 vs. Current
MTD – $93.425b
Low-End Avg. $26.17b 110.24% $78.37b 119.21%
Midpoint Avg. $26.90b 107.25% $79.10b 118.11%
High-End Avg. $27.62b 104.45% $79.83b 117.03%
The Low $15b 192.33% $60b 155.71%
The High $40b 72.125% $100b 93.425%

 

CEOs Hold the Trump Card – “QC” Commentary

“We here in America, hold in our hands the hope of the world, the fate of the coming years; and shame and disgrace will be ours if in our eyes the light of high resolve is dimmed, if we trail in the dust the golden hopes of men.” -Theodore Roosevelt

Today, the White House Strategic and Policy Forum disbanded. Blackstone Group CEO Steven Schwarzman played point for the high powered Forum that has suffered from the resignations of numerous participating CEOs in light of Trump’s recent statements concerning the Charlottesville incident. Schwarzman, representing the Forum issued the following statement [which Trump since disputed]:

“We believe the debate over Forum participation has become a distraction from our well-intentioned and sincere desire to aid vital policy discussions on how to improve the lives of everyday Americans. As such, the President and we are disbanding the Forum.”

With a sub 40% Presidential approval rating and the abandonment by his fellow Corporate America CEO base, Trump is in hot water.  He will now lose additional and desperately needed support from the GOP in both the House and Senate to achieve any of his agenda and campaign promises.  Politicians are fickle. Having lost the recent Repeal and Replace vote by one, this latest debacle is a tell-tale sign of things to come.  It came swiftly and with the support of Corporate America’s finest leaders.  Corporations have long histories and took decades to get to where they are. They have a fiduciary responsibility to their shareholders and diverse customer base to keep their companies operating smoothly and efficiently. Any disruption to that is unacceptable.

Today was not about EPS or EBITDA. Rather, it was about American morals, ethics and values that are and should always be the foundation of the world’s most diverse society and are reflective of the customers who, in turn are the reason businesses exist.  Whether one has an account at J.P. Morgan or drives a Ford, or shops at Walmart or turns on and off the light switches in Chicago as a Commonwealth Edison customer, the engine that drives the companies of the greatest nation on our planet are its people.  As the top dog, President Trump hopefully learned an important lesson today. I believe he meant well, but it certainly didn’t come out that way and we now officially have a Presidency in crisis.

You often read here in the “QC” about Corporate America’s Diversity and Inclusion initiatives. It’s a story I am always proud to tell when we are on an issuer’s new issue transactions.  I work here at our great nation’s oldest Service Disabled Veteran broker-dealer whose certification falls under the umbrella of diversity and inclusion.  The fact remains that Corporate America has spoken today from its top leadership.  As I always recount here, great companies and great initiatives start from the “top down.”  That IS leadership. They led today.

I will also, however, add that those who opposed Trump from the get go are most assuredly happy about this latest chapter in Trump’s controversial seven month old Presidency. The media, to be fair folks, has quite frankly been relentlessly, ruthlessly and consistently focused on pinning Trump into a corner to elicit a reaction.  Well, they got the reaction they wanted these past several days when Trump went off the reservation in his inimitable way, which was subsequently manifested in the disbanding of the Forum and Manufacturing Council.  Rookie mistake perhaps, but when one is the President, there is no such thing as a rookie mistake.

From the onset I have always said that Trump’s election will either serve as a wake-up call to Washington political dysfunction to teach both parties that they are on watch to cross the aisle to get things done OR Trump will succeed and turn the Washington establishment on its head and usher in a new populist leadership.  It appears today that the former should be everyone’s main focus in our wounded nation amidst a host of very dangerous global event risk events all playing out at the same time.  Corporate America, however, and as always, looks very good and highly responsible, which may be the reason why the stock market has held in throughout today’s session.

When America is on the same page NOTHING can stop it.

Ron Quigley, Managing Director and Head of Fixed Income Syndicate

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.

Syndicate IG Corporate-only Volume Estimates for the Remainder of August & September (more…)

Risk On, Risk Off, US-NOKO Tensions Subside; CEOs Stance Vs. Ugly Heads of Racism
August 2017      Debt Market Commentary   

Quigley’s Corner Debt Market Comment- 08.14.17 – Risk On, Risk Off, US-NOKO Tensions Subside; Ugly Heads of Racism Take Top Headline as Fortune CEOs “Pivot”

Below is the opening extract from Quigley’s Corner aka “QC”  Monday, Aug 14 2017  weekend edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest 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  provides objective debt capital market and investment corporate debt commentary and geo-political analysis, it is one of three distinctive market comment pieces produced by Mischler Financial Group.The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our investment grade 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 email: rkarr@mischlerfinancial.com or via phone 203.276.6646


Investment Grade New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and August

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 August 9th               

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Rates  Trading Lab

Tomorrow’s Calendar

 

Investment Grade Corporate Debt New Issue Re-Cap – A View About Charlottesville and the Aftermath

Risk was clearly back on in the financial markets today, as U.S./NOKO tensions fell to the wayside.  Unfortunately prejudice and racism reared their ugly heads in the Charlottesville, Virginia riot over the weekend.  On Monday, Fortune 500 thought leaders Ken Frazier, CEO of Merck & C0., Brian Krzanich, CEO of Intel, and Kevin Plank, CEO of Under Armour each took a stand by protesting the ‘equivocal’ comments made by President Trump in his first response to the domestic terrorism acts in Charlottesville, which were advanced by self-proclaimed alt-right and white supremacist neo-Nazis.  Mischler Financial Group  stands with every corporate executive (and every duly-elected or duly-appointed government official) who stays true to genuinely right-minded beliefs and applauds their respective organization’s dedication to doing right by doing good. In case you missed the memo, many of America’s Fortune corporations adhere to this same notion and advance their commitment via proactive Diversity & Inclusion initiatives. For those corporate executives who may have spent all of their undergrad time in finance and accounting classes, and for those who are perhaps not as familiar as they could be i.e. American History (let’s not forget to mention world history, too!), racism and bigotry are diseases that spew hatefulness and cannot be allowed in a free and democratic society. The incendiary and incite-full actions for which the various white supremacist and KKK groups are notorious for are NOT protected  “First Amendment rights.* They are cancers that cannot be discounted or condoned via equivocal platitudes; simple right-mindedness demands they be eradicated.

(*Think Justice Oliver Wendell Holmes Jr i.e. Schenck v United States and also re-visit Brandenburg v. Ohio)

To the above point, one only need to re-read the Constitution and the Bill of Rights to appreciate that D&I is part and parcel to our country’s DNA. It is also part of the cultural foundation of many Fortune 500 corporations, including Intel, including Merck, including Under Armour and including many others! D&I means respect for and appreciation of differences in ethnicity, gender, age, national origin, disability, sexual orientation, education, and religion. But it’s more than this. We all bring with us diverse perspectives, work experiences, life styles and cultures and we presumably all share a disdain for anyone and any group that attempts to dismantle, disrupt and or destroy. Kudos to Mssrs. Frazier, Krzanich and Plank for putting themselves in harm’s way and risk of “injury by Twitter” for being true leaders and staying true to their convictions and their constituents.

Kudos also to the many Fortune executives who have raised their own voices to advocate on behalf of right mindedness, and to those corporate executives such as Jamie Dimon, CEO of Citigroup, who have opted not to resign their volunteer roles serving on “Presidential Councils” in protest to seemingly wrong-headed rhetoric.  One can hope they have chosen to remain in their roles so that they can be that much more proactive in their WH-appointed “l” roles and/or similar presidential councils in which they serve as volunteers. These are jobs these business leaders have [presumably] accepted to better the country, not to help advance any political platform or political agenda. How the US Secretary of the Treasury or the Director of the National Economic Council decide how to square the so-called ‘equivocal’ views expressed by the CEO-In-Chief vs. their own cultural beliefs will likely be subject to ongoing self-reflection, external speculation and spirited debate. These are smart folks and optimism demands these administration officials be given the benefit of the doubt, just as it is incumbent on any/every corporate leader to serve as role models for employees, customers and clients; just as right-minded parents do for their own children.

Today’s VIX closed 3 bps tighter versus Friday’s close. Also a reminder that tomorrow is August 15th – “mid-August” – that’s when North Korea’s illustrious “bad boy” proclaimed that he’d have his master plan ready to bomb Guam developed by.  One week from today on Monday, August 21st begin joint U.S-South Korean military exercises referred to as Ulchi-Freedom Guardian. The exercise began in our Bicentennial year of 1976. North Korea has annually perceived the joint exercise as “preparation for war.” It is the world’s largest computerized command control implementation. Up to 80,000 American and South Korean troops have participated in this exercise in the recent past.  The game will go on for two weeks before concluding on Thursday August 31st.  Enjoy the show Mr. Jong-Un. You’ll have front row seats though I recommend binoculars. Here’s lookin’ at you kid!

If you ask me, this is the perfect time for corporations to issue bonds. Not a bad thing will really happen, risk is back on and summer vacations are quickly approaching. My prediction – expect Amazon to the hit the tapes first thing tomorrow morning.  Free market enterprise at work. Ya gotta love it!

Today’s IG Corporate dollar DCM finished with 5 issuers that priced 7 tranches between them totaling $4.10b.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

  • The IG Corporate WTD total is 15.24% of this week’s syndicate midpoint average forecast or $4.10b vs. $26.90b.
  • MTD we’ve priced 86.82% of the syndicate forecast for July or $68.675b vs. $79.10b.
  • There are now 6 issuers in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points

 

  • Arch Capital Group Ltd. upsized today’s 8mm share $25 par non-cumulative PerpNC5 Preferred, Series “F” to $200mm from $150mm.
  • Manufacturers & Traders Trust Co. dropped the 3-year FRN tranche from today’s announced 3-part electing 3- and 10-year fixed rate tranches at the launch and with both coming at the tightest side of guidance.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 6 IG Corporate-only new issues, was <14.58> bps.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 7 IG Corporate new issues, including the Arch Capital Group Ltd. $25 par Preferred was <13.21> bps.
  • BAML’s IG Master Index widened 2 bps to +116 vs. +114.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 2 bps to 1.12 vs. 1.10.
  • Standard & Poor’s Investment Grade Composite Spread widened 3 bps to +161 vs. +158.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $11.4b on Friday versus $13.2b on Thursday and $14.2b the previous Friday.
  • The 10-DMA stands at $16.1b.

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
North Korea
·        CIA Director Mike Pompeo cites U.S./NOKO tensions have subsided saying “We’re not closer to war than a week ago, but we are closer than we were a decade ago.” Rhetoric reached height on Friday 8/11 w/ Trump saying “U.S. military solutions are in place, locked and loaded” matching his earlier bluster this week that “North Korea best not make any more threats to the United States or they will be met with fire and fury like the world has never seen.” Russia’s Foreign Minister Lavrov says his country “does not want to see North Korea with nuclear weapons.” On Th. 8/10 NOKO announced its plan to “pre-emptively strike on Guam in mid-August.” Trump’s reaction, “Maybe my ‘fire and fury threats weren’t strong enough!” N. Korea launched an ICBM on 7/28. NOKO’s Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population).  NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has failed. China insiders say PRC does not have the influence with NOKO that the U.S. thinks it does. U.S.’s NOKO strategy quickly changing from containment on the Korean peninsula to defending the Hawaii, Alaska and the continental United States and more offensive in nature. NOKO adding miniature nuclear warheads to its ICBMs. Asian allies now justified to build up militaries. China in precarious position given South China Sea Islands.
ELEVATED
BREXIT Fallout
Pakistani Prime Minister Nawaz Sharif was ousted for his role in a corruption scandal. He selected his brother Shahbaz to take over. Many geopolitical strategists point to the India/Pakistani border conflict as one of if not the most volatile. Both are nuclear capable.

·U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent. Companies prepping for hard BREXIT & 2 years of weak growth.      

CAUTION
“U.S. political gridlock”
·        Trump financial, tax and infrastructure reform challenges & consensus GOP support to pass legislation in doubt after repeal and replace defeat. Dems revamping & revising their message.Mueller expanding FBI probe into Trump. Congress and Senate back in session on Tuesday, September 5th following August recess. Increasingly tense political environment.

·        On June 15th U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions against Russia in 98-2 vote. Iran launches missile into space in response on 7/28.  U.S. levies additional sanctions on Iran in response to launch.

·        June 9th: GCC Crisis as Saudis, UAB, Egypt, Bahrain & 5 others cut diplomatic ties with Qatar; Land, air and sea blockade. Demands include closing its Al Jazeera network & a Turkish military base,severing ties w/Muslim Brotherhood, Hezbollah, al-Qaeda & ISIS.

·        Despite destroying the Caliphate, ISIS is now scattered across a wider MENA region and Europe.

·        Cybercrime, ransomware, viruses & hacking are winning cyber wars. Recent attacks have hit four continents, law firms, food companies, power grids, pharma & gov’ts (Ukraine & Russia).

·        Central banks shrinking balance sheets/higher volatility; low rates persist; slow inflation pick-up.

·        Venezuela – civil unrest continues against Maduro dictatorship. U.S. Tsy freezes Maduro family assets. Trump, who campaigned on non-intervention platform now says he is considering more than mere sanctions and “won’t rule out military option.” Risk of VZ default.  4th largest exporter of oil to U.S. behind Canada (#1), Saudi Arabia (#2) & Mexico (#3).

MODERATE ·        China hard landing: rising corporate debt & slower GDP growth are OECD and IMF concerns.
MARGINAL
2018 U.S. Recession
·        Increased chance of 2018 U.S. recession; “maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns. Market expecting unwind announcement by Fed in September.

 

Syndicate IG Corporate-only Volume Estimates This Week and August

 

IG Corporate New Issuance This Week
8/14-8/18
vs. Current
WTD – $4.10b
August 2017 vs. Current
MTD – $68.675b
Low-End Avg. $26.17b 15.67% $78.37b 87.63%
Midpoint Avg. $26.90b 15.24% $79.10b 86.82%
High-End Avg. $27.62b 14.84% $79.83b 86.03%
The Low $15b 27.33% $60b 114.46%
The High $40b 10.25% $100b 68.67%

 

 

Have a great evening!

Ron Quigley, Managing Director and Head of Fixed Income Syndicate

 

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.

(more…)

Aloha GO Bonds-Hawaiian Style-Muni Deals Scheduled This Week
August 2017      Muni Market   

Mischler Muni Market Market Update for the week of 08-14-17 looks back to last week’s metrics and provides a focused lens on muni bond new issuance scheduled for the upcoming week, with a “Aloha” to GO Bonds-Hawaiian Style, as City and County of Honolulu, Hawaii is scheduled to issue $411 mil in tax exempt and taxable general obligation bonds. As always, the Mischler Muni Market Outlook offers public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of the prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings tentatively scheduled for this week’s issuance.

Last week muni volume was about $5.6 billion. This week volume is expected to be $6.7 billion. The negotiated market is led by $411.0 million tax exempt and taxable general obligation bonds (GO Bonds) for the City and County of Honolulu, Hawaii. The competitive market is led by $1.3 billion general obligation bonds for the State of Maryland on Wednesday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image below aloha-GO-Bonds-Hawaiin Style-Muni Deals This Week

Since 2014 alone, minority broker-dealer Mischler Financial Group Inc.’s  presence across the primary Primary Debt Capital Markets (DCM) space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE).  Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not 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.   Veteran-owned broker-dealer 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.

(more…)

Day’s IG DCM: 14 Issuers Float $14.67b in New Corporate Debt
August 2017      Debt Market Commentary   

Quigley’s Corner 08.07.17 :  Another New Corporate Debt Issue Milestone


Investment Grade New Issue Re-Cap – Most Amount of Issuers YTD; 14 Issuers, $14b+

Today’s IG New Debt Issuance & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and August

The Best and the Brightest: IG DCM Syndicate Forecasts and Sound Bites for Next Week 

This Week’s IG New Issues and Where They’re Trading

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 August 2nd               

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

Today’s IG Corporate dollar DCM finished with a YTD record of 14 issuers that priced 22 tranches between them totaling $14.675b.  Leading the pack: Aetna (NYSE: AET), American Water Capital, Ares Capital (NASDAQ: ARCC), Duke Energy (NYSE: DUK), Kraft Heinz (NYSE:HNZ), Regions Financial (NYSE: RF), and UBS Group (NYSE: UBS).  The SSA space was quiet.  This past March 6th the IG Corporate space featured 12 issuers and April 27th also hosted 12 IG Corporate issuers.  But today takes the cake for the most number of issuers YTD. The DJIA closed at its 9th consecutive new high. The S&P also ended the session at a new all-time high.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

  • The IG Corporate WTD total is 42.80% of this week’s syndicate midpoint average forecast or $14.675b vs. $34.29b.
  • MTD we’ve priced 45.13% of the syndicate forecast for July or $35.70b vs. $79.10b.
  • There are now 4 issuers in the IG credit pipeline.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • Kimco Realty Corp. upsized its $25 par PerpNC5 Class “L” cumulative redeemable preferred stock new issue to $225mm from $150mm at the launch and at the tightest side of price talk.
  • Regions Financial Corp. dropped the 5-year FRN tranche from today’s earlier announced two-part 5-year FXD/FRN new issue having secured sufficient funding in the 5-year fixed rate tranche.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 20 IG Corporate-only but ex-Kimco Realty $25 par Preferred new issues, was <15.69> bps.
  • The spread compression across all 21 IG Corporate new issues including the Kimco Realty $25 par Preferred was <15.24> bps.
  • The average spreads of 1 of the 19 major industry sectors set a new post-Crisis low while 2 of the 19 tied their post-Crisis lows. That’s 15.79% of the sectors.
  • BAML’s IG Master Index was unchanged at +109.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.05 vs. 1.04.
  • Standard & Poor’s Investment Grade Composite Spread tightened 2 bps to +150 vs. +152.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $14.2b on Friday versus $19.6b on Thursday and $14.3b the previous Friday.
  • The 10-DMA stands at $17.6b.

 

Global Market Recap

 

  • U.S. Treasuries – Not fazed by strong Employment Report & this week’s Treasury Refunding.
  • Overseas Bonds – JGB’s down. Good day Gilts. Bund unchanged. Peripherals better.
  • Stocks – Dow looking for 9th record high close & 11th winning day in a row.
  • Overseas Stocks – Asia rallied to a 10yr high. Europe had more red than green.
  • Economic – Not a factor in the U.S. today. PPI on Thursday & CPI on Friday.
  • Overseas Economic – China foreign reserves up. Japan better. Germany IP weaker.
  • Currencies – Quiet day on the FX front. U.S. outperformed 4 of the Big 5 (small).
  • Commodities – Crude oil small loss, gold basically unchanged & copper 2+ year high.
  • CDX IG: +0.24 to 57.95
  • CDX HY: +0.38 to 322.22
  • CDX EM: -3.47 to 183.20

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
·        N. Korea launches ICBM on 7/28. Jong-Un claims Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population).  Fear that NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has failed. U.S. lofts Trident missile in Pacific Ocean in response. China insiders say PRC does not have the influence on NOKO that the U.S. thinks it does.
ELEVATED
BREXIT Fallout
·        U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent.
Venezuela – civil unrest as Maduro dictatorship claims bogus election outcome favors unlimited powers and a new constitutional assembly in elections that U.S. and key LATAM nations will not acknowledge. Caracas named most dangerous city in the world with highest murder rate. VZ gov’t stopped publishing crime stats a decade ago. Dictatorship in our Western Hemisphere. U.S. Tsy. freezes Maduro family assets.
CAUTION
“U.S. political gridlock”
·        Trump financial, healthcare, tax and infrastructure reform challenges & consensus GOP support to pass legislation questioned; U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions against Russia in 98-2 vote. Russia in expansion mode.

·        GCC Crisis as Saudis, UAB, Egypt, Bahrain & 5 others cut diplomatic ties with Qatar; Land, air and sea blockade. Demands include closing its Al Jazeera network & a Turkish military base, severing ties w/Muslim Brotherhood, Hezbollah, al-Qaeda & ISIS.

·        Italian debt-to-GDP ratio is 133% – world’s 3rd highest.

·        Despite destroying the Caliphate, ISIS will be scattered across a wider MENA region and Europe.

·        Cybercrime, ransomware, viruses & hacking are winning cyber wars. The latest attack hit four continents, law firms, food companies, power grids, pharma & gov’ts (Ukraine & Russia).

·        Central banks shrinking balance sheets/higher volatility in 2H17; ECB dovishness; low rates persist.

·        Renewed tensions along the India-Pakistan cease fire line dividing Indian-controlled Kashmir.

MODERATE ·        China hard landing – rising corporate debt have the OECD and IMF concerned.
MARGINAL
2018 U.S. Recession
·        Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak?; “Maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns.

 

Syndicate IG Corporate-only Volume Estimates This Week and August

 

IG Corporate New Issuance This Week
8/07-8/11
vs. Current
WTD – $14.675b
August 2017 vs. Current
MTD – $35.70b
Low-End Avg. $33.46b 43.86% $78.37b 45.55%
Midpoint Avg. $34.29b 42.80% $79.10b 45.13%
High-End Avg. $35.12b 41.79% $79.83b 44.72%
The Low $30b 48.92% $60b 59.50%
The High $45b 32.61% $100b 35.70%

 

UBS Funding Group (Switzerland) AG $3.25bn 2-part 6NC5 Fixed-to-Floating and 6NC5 FRNs Deal Dashboard

Let’s go straight to the “QC” Deal Dashboard for pricing intel and book sizes/bid-to-cover rates.  Here’s a look at spread compression throughout price evolution during today’s two-part book build from IPTs to the launch and final pricing:

Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
6NC5 FRNs 3mL+equiv 3mL+equiv 3mL+95 3mL+95 <20> bps 2.5
6NC5F-t-F +125a +110a (+/-5) +105 +105 <20> bps 2.5

 

………and here’s a snap shot of today’s final book sizes and oversubscription rates:

 

Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
6NC5 FRNs $1.25bn $2.20bn 1.76x
6NC5 F-t-F $2bn $3.5bn 1.75x

 

Final Pricing – UBS Funding Group (Switzerland) AG $3.25bn 2-part 6NC5 Fixed-to-Floating and 6NC5 FRNs

UBS $1.25bn 6nc5 FRNs due 8/15/2023(22) @ $100.00 3mL+95.

UBS $2bn 2.859% 6nc5 due 8/15/2023(22) @ $100.00 to yield 2.859% or T+105.

 

 

Have a great evening!

Ron Quigley

 

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.

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

…..and here’s another look at last week’s day-by-day re-cap of key primary market driver averages for IG Corporates only followed by the prior six week’s averages:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
7/31
TUES.
8/01
WED.
8/02
TH.
8/03
FRI.
8/04
AVERAGES
WEEK 7/31
AVERAGES
WEEK 7/24
AVERAGES
WEEK 7/17
AVERAGES
WEEK 7/10
AVERAGES
WEEK 7/03
AVERAGES
WEEK 6/26
New Issue Concessions <4.05> bps 0.375 bps 1.19 bps 6.80 bps N/A 0.06 bps 1.68 bps <0.05> bps 2.46 bps 2.25 bps <0.24> bps
Oversubscription Rates 4.35x 2.82x 3.09x 1.95x N/A 3.34x 3.30x 3.37x 2.97x 2.38x 3.29x
Tenors 12.83 yrs 12.80 yrs 12.55 yrs 8.12 yrs 6.5 yrs 11.96 yrs 13.03 yrs 10.28 yrs 8.96 yrs 12.50 yrs 9.43 yrs
Tranche Sizes $466mm $933mm $627mm $721mm 325 $651mm $1,512mm $1,187mm $765mm $1,437mm $527mm
Avg. Spd. Compression
IPTs to Launch
<19.73> bps <15.33> bps <17.98> yrs <19.92> bps N/A <18.56> bps <21.15> bps <18.10> bps <19.80> bps <20.50> bps <17.35> bps

 

New Issues Priced

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Muni Bond New Issuance Scheduled Week 080717-Mischler
August 2017      Muni Market   

Mischler Muni Market Market Update for the week of 08-07-17 looks back to last week’s metrics and provides a focused lens on muni bond new issuance scheduled for the upcoming week. As always, the Mischler Muni Market Outlook offers public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of the prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings tentatively scheduled for this week’s issuance.

Last week muni volume was about $7.0 billion. This week volume for muni bond issuance is expected to be $7.3 billion. The negotiated market is led by $1.1 billion tax-exempt and taxable bonds for Cleveland Clinic Health System issued by the State of Ohio. The competitive market is led by $1.5 billion tax-exempt and taxable bonds for New York City Transitional Finance Authority, New York, on Tuesday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image below

muni-bond-new-issuance-080717

Since 2014 alone, Mischler Financial Group Inc.’s  presence across the primary Primary Debt Capital Markets (DCM) space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE).  Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not 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.   Veteran-owned broker-dealer 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.

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Summer Avalanche New IG Debt Issuance Forecast-Mischler Comment
August 2017      Debt Market Commentary   

Quigley’s Corner-08.04.17- Summer Avalanche New IG Debt Issuance Forecast 

Below is the opening extract from Quigley’s Corner aka “QC”  Friday, Aug 4 2017  weekend edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest 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 is one of three distinctive market comment 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 email: rkarr@mischlerfinancial.com or via phone 203.276.6646


Investment Grade New Issue Re-Cap – Summer Avalanche of New IG Debt Issue Forecast for Next Week

Today’s IG New Debt Issuance & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and August

The Best and the Brightest: IG DCM Syndicate Forecasts and Sound Bites for Next Week 

This Week’s IG New Issues and Where They’re Trading

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 August 2nd               

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

Rates Trading Lab

 

Today’s Friday IG Corporate dollar DCM featured  2 issuers that priced 2 tranches between them totaling $650mm as of this writing. The SSA space was quiet today. Please note that I scribed the below Best & Brightest IG Corporate primary market data download piece early this morning, so the data does not include today’s Murphy Oil and TC Pipelines deals.

Thanks! –RQ (In case you left early en route to the beach, the DJIA reached yet another new intra-day high today!)

As for next week, well British American Tobacco’s $49bn purchase of Reynolds American looks like it will manifest itself as the Company announced fixed income investor meetings for an expected mega cross currency transaction across USD, Euro and Sterling.  The Senior Unsecured dollar-denominated portion will feature joint leads Bank of America/Merrill Lynch, Barclays, Citigroup, Deutsche Bank and HSBC. The three tranches could potentially raise $25b dollar equivalent. I am also hearing “chatter” of another big issuer lurking.  We all know that after next week, it begins the traditional summer slowdown period. . But before that, the big push is on, so rest up this weekend, as next week’s syndicate midpoint average forecast calls for $34.29b to price.  Factoring in that average amount to the $21b priced thus far in August would bring the MTD total to $55.29b. The forecast for August is $79.10bn so that would leave $23.81b to get done across the last three weeks of the month or an average of $7.93b.  This ASSUMES that next week will reach the midpoint average forecast. I happen to think we could see $40b next week, which would push the average of each of the last three weeks of August down to $6bn.

But, before we all go away with our families, re-energize this weekend because next week will be a big one.  Read all about it below from the pros who price all the deals in our IG dollar DCM.  We’ll first review today’s primary and secondary market talking points, the growing geopolitical risk factors in our world, take a glance at the weekly and monthly IG primary market volume tables and then it’s onto the masters, maestros and mavens of syndicate who price all the deals in our IG dollar DCM.
Ready?.SET?..R-E-A-D!

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

  • The IG Corporate WTD total is 110.84% of this week’s syndicate midpoint average forecast or $27.986b vs. $25.25b.
  • MTD we’ve priced 26.55% of the syndicate forecast for July or $21.00b vs. $79.10b.
  • There are now 5 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

  • The average spreads across 2 of the 19 major industry sectors tied their post-Crisis lows. That’s 10.53% of the sectors.
  • BAML’s IG Master Index widened 1 bp to +109 vs. +108.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.04 vs. 1.03.
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +152 vs. +151.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $19.6b on Thursday versus $19.9b on Wednesday and $19.6b the previous Thursday.
  • The 10-DMA stands at $17.4b.

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
·   N. Korea launches ICBM on 7/28. Jong-Un claims Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population).  Fear that NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has failed. U.S. lofts Trident missile in Pacific Ocean in response. China insiders say PRC does not have the influence on NOKO that the U.S. thinks it does.
ELEVATED
BREXIT Fallout
·   U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent.
Venezuela – civil unrest as Maduro dictatorship claims bogus election outcome favors unlimited powers and a new constitutional assembly in elections that U.S. and key LATAM nations will not acknowledge. Caracas named most dangerous city in the world with highest murder rate. VZ gov’t stopped publishing crime stats a decade ago. Dictatorship in our Western Hemisphere. U.S. Tsy. freezes Maduro family assets.
CAUTION
“U.S. political gridlock”
·   Trump financial, healthcare, tax and infrastructure reform challenges & consensus GOP support to pass legislation questioned; Mueller expanding FBI probe into Trump with federal grand jury issuing subpoenas.

·   U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions against Russia in 98-2 vote. Russia in expansion mode.

·   GCC Crisis as Saudis, UAB, Egypt, Bahrain & 5 others cut diplomatic ties with Qatar; Land, air and sea blockade. Demands include closing its Al Jazeera network & a Turkish military base, severing ties w/Muslim Brotherhood, Hezbollah, al-Qaeda & ISIS.

·   Italian debt-to-GDP ratio is 133% – world’s 3rd highest.

·   Despite destroying the Caliphate, ISIS will be scattered across a wider MENA region and Europe.

·   Cybercrime, ransomware, viruses & hacking are winning cyber wars. The latest attack hit four continents, law firms, food companies, power grids, pharma & gov’ts (Ukraine & Russia).

·   Central banks shrinking balance sheets/higher volatility in 2H17; ECB dovishness; low rates persist.

·   Renewed tensions along the India-Pakistan cease fire line dividing Indian-controlled Kashmir.

MODERATE ·   China hard landing – rising corporate debt have the OECD and IMF concerned.
MARGINAL
2018 U.S. Recession
·   Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak?; “Maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns.

 

Syndicate IG Corporate-only Volume Estimates This Week and August

 

IG Corporate New Issuance This Week
7/31-8/04
vs. Current
WTD – $27.986b
August 2017 vs. Current
MTD – $21.00b
Low-End Avg. $24.21b 115.60% $78.37b 26.80%
Midpoint Avg. $25.25b 110.84% $79.10b 26.55%
High-End Avg. $26.29b 106.45% $79.83b 26.31%
The Low $15b 186.57% $60b 35.00%
The High $35b 79.96% $100b 21.00%

 

The “Best and the Brightest” Syndicate Forecasts and Sound Bites re New IG Debt Issuance Next Week 

 

I am happy to announce that the “QC” once again received 100% unanimous participation from all 24 syndicate desks surveyed for today’s “Best & Brightest” edition!  Thank you to all of them. 21 of those participants are among 2017’s YTD top 22 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.

*Please note that these are Investment Grade Corporates only. They do not include SSA issuance unless otherwise noted. 

As always “thank you” to all the syndicate desks that participated in today’s survey.  I greatly appreciate your time to contribute and for making this edition of the “QC” among the most widely read! You are helping to promote Mischler’s value-added DCM proposition while adding readership to the “QC” that won Wall Street Letter’s Award as Best Broker Dealer Research in our financial services industry for three consecutive years! That’s 2014, 2015 and 2016 !!   

The preface to the weekly canvass of the top fixed income syndicate desk teams begins with the following background-
Entering this morning’s Friday session, here are this week’s IG new issue volume talking points:   

  • The IG Corporate WTD total outperformed once again with issuance 108.26% of the syndicate midpoint average forecast or $27.336b vs. $25.25b.
  • MTD we have now priced 25.73% of the syndicate projection for August IG Corporates or $20.35b vs. $79.10b.
  • Entering today’s session, the YTD IG Corporate-only volume is $862.833b vs. $843.591b on August 3rd, 2016 or 2.28% more than a year ago.
  • The all-in or IG Corporate plus SSA YTD volume is $1,054.568b vs. $1,077.377b on August 3rd, 2016 or 2.16% less than the year ago total.

Entering this morning’s session, here are the five key primary market driver averages from the 42 IG Corporate-only deals that priced this week: 

  • NICS:  0.06 bps
  • Oversubscription Rates: 3.34x
  • Tenors: 11.96 years
  • Tranche Sizes: $651mm
  • Spread Compression from IPTs to the Launch: <18.56> bps

Here’s how this week’s critical primary market data compares against last week’s entering this morning’s session: 

  • Average NICs tightened 1.62 bps to an average 0.06 bps vs. 1.68 bps across this week’s 42 IG Corporate-only new issues.
  • Over subscription or bid-to-cover rates, the measure of demand, slightly increased by 0.04-times to 3.34x vs. 3.30x. 
  • Average tenors contracted by 1.07 years to an average 11.96 years vs. 13.03.
  • Tranche sizes decreased by $861mm to $651mm vs. 1,512mm. Last week featured the $22.5bn 7-part transaction for AT&T which boosted the average tranche size.  
  • Spread compression from IPTs to the launch/final pricing of this week’s 42 IG Corporate-only new issues widened by 2.59 bps to <18.56> bps vs. <21.15>.
  • Standard and Poor’s Investment Grade Composite Spreads widened 2 bps to +152 vs. +150 bps.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning widened 2 bps to 1.04 vs. 1.02 bps. 
  • Week-on-week, BAML’s IG Master Index widened 1 bp to +109 vs. +108. 
  • Spreads across the four IG asset classes widened 2 bps bps to 6.00 bps vs. 4.00 bps as measured against their post-Crisis lows. 
  • The 19 major industry sectors also widened 2.36 bps to 9.89 vs. 7.53 bps also as measured against their post-Crisis lows.
  • For the week ended August 2nd, Lipper U.S. Fund Flows reported an inflow of $1.485b into Corporate Investment Grade Funds (2017 YTD net inflow of $79.114b) and a net inflow of $20.818m into High Yield Funds (2017 YTD net outflow of $6.663b).
  • Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 50 deals that printed, 26 tightened versus NIP for a 00% improvement rate,  13 widened (26.00%), 9 were flat (18.00%) and 2 were not available (4.00%) or N/A.

Entering today’s Friday session here’s how much we issued this week:

  • IG Corps: $27.336b
  • All-in IG (Corps + SSA): $31.986b

And now ladies and gentlemen, it’s time for the guy-in-the corner, to ask today’s question, “what are your thoughts and numbers for next week’s IG Corporate new issue volume?”

Thank you in advance for your time and contribution!

The “Best and the Brightest” in Their Own Words

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Equities Markets: Scaling The Peak-Mischler Comment via Peruzzi’s Perch
August 2017      Equities Market Commentary   

Peruzzi’s Perch 08.04.17- All Systems Remain in “Go” Mode; Equities Markets Continue to Scale The Peak

Throughout the last several weeks more than a few strategists and commentators have been warning investors of overvalued and overbought equities markets. Calls were being made to head for the exit. Yet, for reasons known and unknown, investors kept plowing money into the market. Lack of volatility, low interest rates, cheap oil, tame inflation and favorable business policy drew investors in to US [and global] equities markets as they did not heed the warnings. To understand this, we should look at the hikers that attempt to conquer Mt Everest. Those mountaineers are well aware that peril could be met with a slight slip of foot or unforeseen storm, yet they trudge forward for the glory and euphoria of reaching the top. Likewise, investors today are presumably well aware of the risks (until they’re not!) and this week, the glory of new all-time highs as well as very good earnings and a strong jobs report made the voyage worth it.

larry-peruzzi-mischler-equitiies

Larry Peruzzi, Managing Director

We had another heavy earnings week. So far, this recent quarter is shaping up as the best earnings season in 7 years, with 77% of companies reporting beating estimates. Economics-wise, this week‘s June Pending home sales, June Personal spending, July ISM manufacturing and June factory orders all came in at or very close to estimates. Price deflator and personal income data was dovish. The major economic release was Friday’s July employment report. Unemployment dropped to 4.3% as expected and non-farm payrolls added a better than expected 209,000 jobs. Average hourly earnings met estimates at +.3% M/M which at a +2.5% Y/Y rate should NOT ignite any inflation fears.

The Washington/Russia/North Korea/Venezuela soap opera drama continues. The Trump administration cabinet turnover is reaching a record pace, but none of this seems to be enough to spook the markets. Possible new sanctions against Venezuela help lift oil close to $50 a barrel but many U.S refineries have been fitted, at sizeable cost, to refine Venezuela’s heavy type of crude so look for a fair amount of politicking here.

Looking ahead to next week, earning season is nearing its end with just 206 companies due to report. Also due are Consumer credit on Monday, 2Q non-farm productivity and labor cost on Wednesday, July PPI data on Thursday and July CPI data on Friday.

With the DOW at 22, 000 and the economy close to being at full employment, analysts and investors will closely monitor any type of inflationary pressure which might cause the FED to raise rates at a faster pace or possibly, amplify asset sales.  So, we will be listening to speeches by Fed  governors Bullard, Kashkari, Dudley next week ahead of the August 16th FOMC meeting minutes.  With global growth, low inflation, low energy prices and emerging market growth investors will be cautiously move forward as we scale the peak.

 

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans.  Larry’s experience  and best execution perspective stems from his sitting on ‘both sides of the aisle.’  For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Mischler End of Week Equities Market Commentary via Peruzzi’s Perch July 28, 2017 end-of-week edition is distributed via email to institutional investment managers and Fortune Treasury clients of veteran-owned broker-dealer Mischler Financial Group, the investment industry’s oldest  minority broker-dealer owned and operated by Service-Disabled Veterans.

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group

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Corporate Bond Day Belongs to Comcast & Verizon – Mischler DCM Comment
August 2017      Debt Market Commentary   

Quigley’s Corner 08.01.17- Investment Grade Corporate Bond Day Belongs to Comcast & Verizon 

Below is the opening extract from Quigley’s Corner aka “QC”  Tuesday, Aug 1 2017  edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest 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 is one of three distinctive market comment 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 email: rkarr@mischlerfinancial.com or via phone 203.276.6646

 

Investment Grade New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and August

Comcast Corporation’s $2.5bn 2-part 10.5- and 30-year Deal Dashboard

Comcast Corporation’s Commitment to Honoring the Military, Veterans and Their Families

  • The Comcast Corp. Promise
  • Comcast’s Military and Veteran Affairs Office
  • Q&A with Carol Eggert, SVP, Military and Veteran Affairs for Comcast Cable Brigadier General (Retired), U.S. Army

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

New Issues Priced (Comcast, Verizon Communications, Celgene Corp, Kimco Realty, Ryder System, Axis Bank)

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending July 26th              

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

Investment Grade New Issue Re-Cap

 

Today’s IG Corporate dollar DCM finished with 7 issuers pricing 9 tranches between them totaling $8.40b.  The SSA space boosted the total adding 3 issuers across 4 tranches for $2.75b and thereby bringing the all-in IG day total to 10 issuers, 13 tranches and $11.15b.   But, today was all about Comcast Corporation (NASDAQ:CMCSA) and their $2.50b two-part 10.5- and 30-year.  Comcast is consistently acknowledged by Military Friendly as a Top Military Friendly Employer. Since 2012, the cable giant has been recognized for its commitment to increasing opportunities for the Military Community. This year Comcast is happy to highlight its recognition as the #1 Military Spouse Friendly Employer and the #4-ranked Military Friendly Employer in the nation.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

  • The IG Corporate WTD total is 60.93% of this week’s syndicate midpoint average forecast or $15.386b vs. $25.25b.
  • MTD we’ve priced 10.62% of the syndicate forecast for July or $8.40b vs. $79.10b.
  • There are now 5 issuers in the IG credit pipeline.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • The Asian Development Bank upsized today’s 5-year Global Green Bond tranche of its 2-part 5s/10s new issue to $750mm from $500mm at the launch.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 6 IG Corporate-only new issues, was <15.33> bps.
  • The average spreads across 1 of the 19 major industry sectors set a new post-Crisis low while 3 of the 19 tied their post-Crisis lows. That’s 21.05% of the sectors.
  • BAML’s IG Master Index widened 1 bp to +109 vs. +108.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 1.02 vs. 1.03.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +151.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $17.7b on Monday versus $14.3b on Friday and $13.3b the previous Monday.
  • The 10-DMA stands at $17.4b.

 

Global Market Recap

 

  • U.S. Treasuries – Started under pressure but turned it around with the 30yr leading the rally.
  • Overseas Bonds – JGB’s mixed & little changed. Strong rally in Europe.
  • Stocks – Dow (all-time high) leading U.S. stocks higher into the close.
  • Overseas Stocks – Global stock rally.
  • Economic – U.S. data was weak or weaker than last with tame inflation.
  • Overseas Economic – China better. Japan weaker. Europe solid-to-strong.
  • Currencies – USD was better bid vs. 3 of the Big 5 & unchanged vs. the other 2.
  • Commodities – Crude oil reached its high since May & then sold off hard.
  • CDX IG: -0.84 to 56.38
  • CDX HY: -1.89 to 318.54
  • CDX EM: +0.24 to 190.25

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
N. Korea launches ICBM on 7/28. Jong-Un claims Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population).  Fear that NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has obviously failed. Tensions are mounting.
ELEVATED
BREXIT Fallout
U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent.
Venezuela – civil unrest as Maduro dictatorship claims bogus election outcome favors unlimited powers and a new constitutional assembly in elections that U.S. and key LATAM nations will not acknowledge. Caracas named most dangerous city in the world with highest murder rate. VZ gov’t stopped publishing crime stats a decade ago. Dictatorship in our Western Hemisphere. U.S. Tsy. freezes Maduro family assets.
CAUTION
“U.S. political gridlock”
Trump financial, healthcare, tax and infrastructure reform challenges & consensus GOP support to pass legislation questioned; Mueller expanding FBI probe into Trump. White House cleans house; New Chief of Staff.

U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions against Russia in 98-2 vote. Russia in expansion mode.

·         GCC Crisis as Saudis, UAB, Egypt, Bahrain & 5 others cut diplomatic ties with Qatar; Land, air and sea blockade. Demands include closing its Al Jazeera network & a Turkish military base, severing ties w/Muslim Brotherhood, Hezbollah, al-Qaeda & ISIS.

·         Italian debt-to-GDP ratio is 133% – world’s 3rd highest.

·         Despite destroying the Caliphate, ISIS will be scattered across a wider MENA region and Europe.

·         Cybercrime, ransomware, viruses & hacking are winning cyber wars. The latest attack hit four continents, law firms, food companies, power grids, pharma & gov’ts (Ukraine & Russia).

·         Central banks shrinking balance sheets/higher volatility in 2H17; ECB dovishness; low rates persist.

·         Renewed tensions along the India-Pakistan cease fire line dividing Indian-controlled Kashmir.

MODERATE ·         China hard landing – rising corporate debt have the OECD and IMF concerned.
MARGINAL
2018 U.S. Recession
·         Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak?; “Maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns.

 

Syndicate IG Corporate-only Volume Estimates This Week and August

 

IG Corporate New Issuance This Week
7/31-8/04
vs. Current
WTD – $15.386b
August 2017 vs. Current
MTD – $8.40b
Low-End Avg. $24.21b 63.55% $78.37b 10.72%
Midpoint Avg. $25.25b 60.93% $79.10b 10.62%
High-End Avg. $26.29b 20.49% $79.83b 10.52%
The Low $15b 102.57% $60b 14.00%
The High $35b 43.96% $100b 8.40%

 

Comcast Corporation’s $2.5bn 2-part 10.5- and 30-year Deal Dashboard

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Investment Grade DCM Talking Points-Mischler Comment
August 2017      Debt Market Commentary   

Quigley’s Corner 07.31.17- Investment Grade DCM – American Airlines Floats and Flies Ahead of Day’s Debt Issuers 

Below is the opening extract from Quigley’s Corner aka “QC”  Monday July 31 2017  edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest 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 is one of three distinctive market comment 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 email: rkarr@mischlerfinancial.com or via phone 203.276.6646


Investment Grade DCM New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and July

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 July 26th              

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar


Investment Grade New Issue Re-Cap

Today’s IG Corporate dollar DCM finished with 11 issuers pricing 15 tranches between them totaling $6.986b.  The SSA space was quiet today. It seemed much busier than today’s final tally given the 15 tranches but if you’ll recall several syndicate desks did comment in last Friday’s “QC” survey for this week’s IG Corporate new issue volume that it would seem busier given the expectation for lots of smaller sized deals.

………….Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

  • The IG Corporate WTD total is 27.67% of this week’s syndicate midpoint average forecast or $6.986b vs. $25.25b.
  • MTD we’ve priced 143.28% of the syndicate forecast for July or $120.926b vs. $84.40b.
  • There are now 6 issuers in the IG credit pipeline.

July 2017 finished as the second highest volume July on record for IG Corporates at $120.876b as well as for all-in IG supply (Corporates plus SSA) – $141.476b. 

Today’s IG Primary & Secondary Market Talking Points 

  • Banco General, S.A. upsized today’s 10yr 144a/REGS Senior Unsecured Notes new issue to $550mm from its $500mm launch size.
  • International Paper Co. dropped the FRN tranche from today’s earlier announced two-part 3NC1 FGRN and 30yr Senior Notes offering.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 15 IG Corporate-only new issues, was <19.73> bps.
  • Excluding today’s IG-rated preferred for Public Storage, the average spread compression of today’s 14 IG Corporate-only new issues, was <20.61> bps.
  • The average spreads across 1 of the 19 major industry sectors set a new post-Crisis low while 6 of the 19 tied their post-Crisis lows. That’s 36.84% of the sectors.
  • BAML’s IG Master Index was unchanged at +108.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.03 vs. +102.
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +151 vs. +150.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $14.3b on Friday versus $19.6b on Thursday and $12.8b the previous Friday.
  • The 10-DMA stands at $17.1b.

 

Global Market Recap 

  • U.S. Treasuries – Unchanged (2yr & 3yr) to +0.8 bps (30yr) in a very quiet day.
  • Overseas Bonds – JGB’s small loss. Bund small gain & Gilt weaker.
  • Stocks – U.S. stocks mixed heading into last hour. Dow traded closed at a new all-time high……again!
  • Overseas Stocks – HS & China rallied. Nikkei small loss. Europe mostly red.
  • Economic – U.S. data was mixed. Core PCE tomorrow.
  • Overseas Economic – China weaker. Japan stronger. Europe stronger with tame inflation.
  • Currencies – USD was better overnight but was hit hard during NY trading hours.
  • Commodities – Crude oil little changed but did trade over 50. Copper 2+ year high.
  • CDX IG: -0.28 to 57.37
  • CDX HY: -0.20 to 320.94
  • CDX EM: -0.53 to 190.66

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
N. Korea launches ICBM on 7/28. Jong-Un claims Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population).  Fear that NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has obviously failed. Tensions are mounting.  
ELEVATED
BREXIT Fallout
U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent.  
Venezuela – civil unrest as Maduro dictatorship claims bogus election outcome favors unlimited powers and a new constitutional assembly in elections that U.S. and key LATAM nations will not acknowledge. Caracas named most dangerous city in the world with highest murder rate. VZ gov’t stopped publishing crime stats a decade ago. Dictatorship in our Western Hemisphere. U.S. Tsy. freezes Maduro family assets.  
CAUTION
“U.S. political gridlock”
Trump financial, healthcare, tax and infrastructure reform challenges & consensus GOP support to pass legislation questioned; Mueller expanding FBI probe into Trump. White House cleans house; New Chief of Staff.

U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions against Russia in 98-2 vote. Russia in expansion mode.

GCC Crisis as Saudis, UAB, Egypt, Bahrain & 5 others cut diplomatic ties with Qatar; Land, air and sea blockade. Demands include closing its Al Jazeera network & a Turkish military base,severing ties w/Muslim Brotherhood, Hezbollah, al-Qaeda & ISIS.

Italian debt-to-GDP ratio is 133% – world’s 3rd highest.

Despite destroying the Caliphate, ISIS will be scattered across a wider MENA region and Europe.

Cybercrime, ransomware, viruses & hacking are winning cyber wars. The latest attack hit four continents, law firms, food companies, power grids, pharma & gov’ts (Ukraine & Russia).

Central banks shrinking balance sheets/higher volatility in 2H17; ECB dovishness; low rates persist.

Renewed tensions along the India-Pakistan cease fire line dividing Indian-controlled Kashmir.

MODERATE China hard landing – rising corporate debt have the OECD and IMF concerned.
MARGINAL
2018 U.S. Recession
Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak?; “Maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns.

 

Syndicate IG Corporate-only Volume Estimates This Week and July

 

IG Corporate New Issuance This Week
7/31-8/04
vs. Current
WTD – $6.986b
July 2017
Forecasts
vs. Current
MTD – $120.926b
August 2017
Low-End Avg. $24.21b 28.86% $83.87b 144.18% $78.37b
Midpoint Avg. $25.25b 27.67% $84.40b 143.28% $79.10b
High-End Avg. $26.29b 26.57% $84.92b 142.40% $79.83b
The Low $15b 46.57% $70b 172.75% $60b
The High $35b 19.96% $111b 108.94% $100b

 

 

Have a great evening!

Ron Quigley

 

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.

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

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Muni Bond Issuance Scheduled-Week of July 31 2017 via Mischler Financial Group
July 2017      Muni Market   

Mischler Muni Market Market Update for the week of 07-31-17 looks back to last week’s metrics and provides a focused lens on pending muni bond issuance scheduled for the upcoming week. As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $4.2 billion. This week volume is expected to be $7.2 billion. The negotiated market is led by $1.1 billion senior and subordinate bonds for the Bay Area Toll Authority, California. The competitive market is led by $388.9 million tax-exempt and taxable general obligation bonds for Portland Public School District #1J, Oregon on Thursday. Commonwealth of Massachusetts is selling $1.5 billion GO RANs at competitive sale on Wednesday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image below

municipal-bond-issuance week jul 31 2017

Since 2014 alone, Mischler Financial Group Inc.’s  presence across the primary Debt Capital Markets space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE).  Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not 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.   Veteran-owned broker-dealer 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.

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