Quigley’s Corner: Dec 2, 2013
Investment Grade New Issue Re-Cap
December kicked off today with yet another avalanche of IG new issuance that featured 4 issuers across 13 tranches and a total of $9.50billion. In fact, it hit for a rather unique cycle today in that we saw a single tranche, a two-part, four-part and six-part!! Today’s offerings emphasize the diverse menu of bonds we’re seeing served up to investors. Issuer diversity ranged from restaurants to pharmas; from a retail staple to banking. The aftermarket performance of today’s new issues tightened anywhere from 2 bps to as much as 8 bps in the case of CVS’ new 30-year tranche. CVS garnered a 19 billion book (4.75x).
Now, sit back, relax, kick up your feet and get a nice hot cup of Starbucks coffee because it was for the Seattle–based American global coffee company and coffeehouse chain that is our highlighted transaction. Mischler Financial Group, Inc. is proud to announce it had its first taste of Starbucks today, figuratively speaking of course, having been offered an active Co-Manager role on its two-part 3- and 5-year transaction. Starbucks Corp. (Baa1/A-) hit the tapes as a $750 million “will not grow” Senior Unsecured Global transaction and with the caveat that each tranche would be index eligible inferring at least a $250 million size. IPTs were in the +50 “area” on the 3s and +75-80 on the 5s before tightening substantially to the +40 and +65 “area respectively. At that point “area” was defined as +/- 2 bps. Both tranches reeled into the tightest side of those launch levels at +43 and +63 where they each priced. The 3-year was $400 million with the 5-year at $350 million.
The most recent Starbucks deals to price were three months ago in September but prior to that you’d have to look back six years to their 2007 issues. Relative value, as such, simply pointed to those prints. For the five-year we looked at the 6.25% due 8/15/2017 was T+23 bid pre-announcement or G+78 or negative 15 bps versus today’s +63 pricing level. The 3s/5s curve is about 25 bps taking you to today’s T+38 final pricing level and therein pointing to another negative 15 bps concession.
With 20,891 stores in 62 countries, and 13,279 of them in the U.S., Starbucks is the largest coffee company in the world. Given the broad range of its customer base and geographical locations, diversity and inclusion is not only a smart business decision for Starbucks but it’s at the core of its business plan. Just ask CFO-CAO Troy Alstead who will tell you that Supplier Diversity is a smart business decision. It helps the Company identify and deliver high quality products and services across all business channels. Its customer base, is as diverse as is its supplier mix. It begins the moment you walk into any Starbucks store in which its employees embrace diversity. It’s an essential component of who they and extends to its store locations in local neighborhoods. Think about that readers. Where is your local Starbucks? You see what I mean? It’s part of every community! It’s all inclusive.
Starbucks Most Diverse Print Ever!
Not only did Starbucks include several loan lending institutions as Co-Managers on today’s prints but it worked to mirror its customers by selecting its single most diverse fixed income print ever: Along with Mischler Financial Group, Inc., – the nation’s oldest and largest Service Disabled Veteran broker-dealer – Starbucks selected minority boutique investment banks that are known as “best-in-class” within each minority category. Lebenthal (woman-owned); Ramirez (Hispanic American) and Williams Capital (African American). It may be hard to believe – given the excellent product we all look forward to in the morning – but I’ll bet your Starbucks coffee will taste that much better knowing the people at the top of Starbucks have embraced a policy reflective of all of us.
Congrats to Starbucks management and Treasury/Funding for today’s piping hot print that just happens to have tightened 3 bps on the bid side of both the 3- and 5-year tranche. Final order books were heard to be $2.2 billion on the 3-year (5.5x bid-to-cover) and $2.4 billion on the 5-year (6.86x covered). Investors clamored for bonds and Mischler was happy to have been able to help introduce a total of 16 new investors to Starbucks’ investor profile. How’s THAT for diversity?
Thank you to Starbucks for today’s opportunity and a nice shout out to the Morgan Stanley syndicate desk for working so well and so efficiently with us today! MS was there the moment info was available and I’m happy to say it was a seamless and smooth experience!! As for all our investors, especially those that have helped build the foundation on which our premier distribution network has been built……well…..you all know how I feel – you’re the best! Thanks to all of you! –RQ
……..enjoy your vento mocha frappucino with soy mocha drizzle, matcha powder, protein powder, caramel brulee topping, strawberries and frappuccino chips!!! (more…)
Greetings to special rare Sunday edition of the Syndicate Closing Commentary. I know we’re supposed to rest on Sunday but with lots of things going on this weekend and the AFSA conference last week, playing wearing five hats and playing catch-up on a Monday is never a good idea. Besides, after all the positive feedback I received on this commentary from all the movers and shakers in Treasury/Funding, diversity leaders, origination and syndicate folk as well as accounts that I encountered at last week’s 23rd Annual AFSA Credit Summit in Boston, I have been moved and inspired by all you and your respective organizations to go the extra mile and deliver what you said you enjoy. So without further ado, let’s get to it.
AFSA’s 23rd Annual Credit Summit Features Diversity & Inclusion Luncheon Panel:
Of the many offerings at this year’s AFSA conference, one was especially close to the team at Mischler Financial Group. On Wednesday, May 29th, AFSA featured a showcase luncheon panel on “Diversity and Inclusion.” It was a comprehensive discussion that explored the impact of diversity in problem solving and innovation; how to leverage its benefits in creating new financial products and a review of the details of recent diversity bond issuance and trends. This year’s Summit Chairman was Steve Howard, Global Head of Capital Markets & Derivatives, Toyota Financial Services who did a wonderful job while serving our industry well in his role. The panel was moderated by Suni Harford, Managing Director Regional Head of Markets, North America at Citigroup Inc. In 2012, Ms. Harford ranked 16th among the most powerful women in banking by American Banker Magazine. Featured panelists were Zeeshan Naqvi, Director of Global Long-Term Funding, GE Corporate Treasury; Kaishi Riaz, Global Capital Markets, BlackRock, Dean Chamberlain, Principal and CEO, Mischler Financial Group, Inc., Chris Williams, Chairman and CEO, The Williams Capital Group, L.P. and Alexandra Lebenthal, Lresident and CEO, Lebenthal & Company.
Suffice to say this was the single highest attended panel at the conference and represented a lot of hard work across on behalf of all the participating organization to break thru the “glass ceiling” of diversity. There is more work to do and we never get “there” wherever “there” is, but the cumulative efforts of these participants and their respective Company’s have never and will never give up in providing value-added propositions and a shared ethos motivated and driven by meritocracy. Minority boutique banks are NOT “check-the-box” mandates. The competitive nature of our financial services industry has motivated meaningful boutique investment bank and full service broker-dealer build-outs in pursuit of “sustainable” platforms. Sustainability means a value-added proposition and vice versa. Not to get corny or anything but if I could express it another way, the minority space has broken out much like that glass “Wonkavator” did in the final scene of the 1971 version of Wille Wonka & the Chocolate Factory. If you don’t get it, place the DVD in a tray and watch from the last few minutes of the film beginning in Willy Wonka’s office in which everything is cut in half until the final credits. (more…)
Honoring Vets on Memorial Day: Mischler Financial Pledges May Profits to Fisher House:
Readers of my daily missives are well-aware that Mischler Financial Group is the nation’s oldest and largest Service Disabled Veteran. What you might not realize is that our business philosophy is different than all but a few “Wall Street” firms. Unbeknownst to but a few, much of our profits—which come from capital markets underwriting fees and trade execution commissions—are redistributed throughout the year to U.S. military veteran-related support and advocacy groups; in particular, those groups focused on supporting service-disabled veterans and their respective families.
Since the firm’s founding in 1994, Mischler Financial has directly donated hundreds of thousands of dollars and has led fund-raising programs that have delivered exponentially more money to critically important veteran-focused causes and initiatives. I’m therefore honored to report that, in honor of Memorial Day 2013, Mischler Financial Group will be contributing 10% of the firm’s May profits to Fisher House. Fisher House provides a “home away from home” for military families to be close to a loved one during hospitalization for an illness, disease or injury.
Now to the day’s new issue pricing–including a look at both the new Ford and GM ‘models’, a peak at the pipeline and IG Corporate Bond trading stats. (more…)
News and Information Categories
- Mischler Muni Market Outlook: Municipal Bond Offerings Scheduled Week of April 24 04/24/2017
- Week’s IG Corporate Bond Issuance: Cooling Off Period; April Showers Bring May Flowers 04/22/2017
- FIG Funding 5.0- Mother Merrill Launches a MOAB (Mother of All Bonds) 04/20/2017
- FIGs 4.0; Investment Grade New Issue Re-Cap- Mischler Debt Market Comment 04/19/2017
- Mischler Muni Market Outlook-Pending Municipal Debt Offerings Scheduled This Week 04/17/2017
- Risk Appetites Sour as News Cycle Confounds, But US Equity Markets Remain Stable; Mischler Commentary 04/07/2017