Browsing articles tagged with "debt capital markets Archives - Mischler Financial Group"
Muni Bond Inflows Increase; Risk On Re Intermediate Maturities-Mischler Comment
May 2017      Muni Market   

Mischler Muni-bond Market Outlook for the week commencing 05.15.17 looks back to last week’s metrics and provides a lens focused on pending municipal bond offerings scheduled for the upcoming week.  Muni bond inflows increased last week, supported by a risk-on view toward intermediate maturities within the municipal debt market. 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 $8.9billion. This week volume is expected to be $8.8 billion. The negotiated market is led by $1.08 billion for Los Angeles Unified School District, California. The competitive market is led by $231.6million for the City of Phoenix Civic Improvement Corp, Arizona 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

municipal-bond-offering-week-051517To illustrate our presence within the Debt Capital Markets space: since 2014 alone,  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 a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE) and a recognized minority broker-dealer. 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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FIG Funding 5.0- Mother Merrill Launches a MOAB (Mother of All Bonds)
April 2017      Debt Market Commentary   

Quigley’s Corner 04.19.17 – Mother Merrill Launches A Mother of All Bonds aka MOAB

 MOAB-BAML-Mother-of-all-Bonds

 

 

Investment Grade New Issue Re-Cap – BAML Launches a $6.75b MOAB (“A “Mother-Of-All-Bonds”)

IG Primary & Secondary Market Talking Points

Global Market Recap

Syndicate IG Corporate-only Volume Estimates April

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 April 12th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

Both Bank of America/Merrill Lynch and Morgan Stanley issued today, wasting no time to capitalize on their recent strong earnings.  BAML launched and priced a proverbial MOAB of a deal – a $6.75b 4-tranche Global Senior Notes transaction comprised of a 6nc5 FRN, 6nc5 fixed-to-float, an 11nc10 f-t-f and a 21nc20 f-t-f.  Morgan Stanley printed a $1.75b 7nc6 FRN.  That represents the fourth and fifth of the U.S. six-pack banks leaving Goldman Sachs as the one that hasn’t yet issued.  Yesterday, Goldman missed analysts estimates as a result of its currency and commodity businesses.  However, it should be noted that GS doubled its YoY profits which points to the impact lofty estimates can have.  Goldman’s investment banking business revenues rose 16% thanks to its debt underwriting strength.

 

4 Corporate issuers tapped the IG dollar DCM today pricing 8 tranches between them totaling $12b.  The SSA space was inactive.

 

  • MTD we have now priced over 63% of the IG Corporate mid-range syndicate projection for April or $58.192b vs. $91.50b.

 

IG Primary & Secondary Market Talking Points

 

  • Basin Electric Power Cooperative upsized today’s 144a/REGS 30-year FMBs to $500mm from $300mm at the launch and at the tightest side of guidance.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 8 IG Corporate-only (ex-Preferred) new issues was <13.72> bps.
  • BAML’s IG Master Index widened 1 bp to +125 vs. +124.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.19 vs. 1.18.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +165.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $16.5b on Tuesday versus $9.6b on Monday and $16.0b the previous Tuesday.
  • The 10-DMA stands at $14.0b.

 

Global Market Recap

 

  • U.S. Treasuries – closed down. Pressured by Japan selling and weak Bunds & Gilts.
  • Overseas Bonds – JGB’s were mixed & flatter. Bunds & Gilts were hit hard.
  • Stocks – U.S. stocks started the day bid but rolled over. Mixed heading into the close.
  • Overseas Stocks – Nikkei tiny gain. China red. Europe improved except the U.K.
  • Economic – Fed’s Beige Book: Modest or moderate is all you need to know.
  • Overseas Economic –  EU CPI YoY was unchanged (overall & core).
  • Currencies – Good day for the USD outperforming all of the Big 5.
  • Commodities – Very poor performance by crude oil & gold was also a loser today.
  • CDX IG: -0.03 to 68.77
  • CDX HY: +0.28 to 349.61
  • CDX EM: -0.88 to 211.87

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

-Tony Farren

 

Syndicate IG Corporate-only Volume Estimates April

 

IG Corporate New Issuance April 2017
Forecasts
vs. Current
MTD – $58.192b
Low-End Avg. $90.25b 64.48%
Midpoint Avg. $91.50b 63.60%
High-End Avg. $92.75b 62.74%
The Low $65b 89.53%
The High $111b 52.43%

 

 

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.  (more…)

Three’s A Crowd; Durable Goods and Debt Capital Markets-Mischler Comment
September 2016      Debt Market Commentary   

Quigley’s Corner 09.27.16 Durable Goods and Debt Capital Market Issuance

Investment Grade New Issue Re-Cap – Three’s a Crowd

Tomorrow’s Durable Goods Number Should Result in Issuance and Here’s Why:

Global Market Recap

IG Primary & Secondary Market Talking Points

Presidential Debate Ratings Set New Records

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending September 21th

Investment Grade Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Rates Trading Lab

Tomorrow’s Calendar

 

Lehigh University stood alone owning today’s IG Corporate calendar with its $150mm 30-year 3(a)4exempt taxable bond, Series 2016 new issue. The reason?  Big problems in Europe.  Three issuers stood down this morning across the pond and ECB President Mario Draghi spoke of a pervasive sense of urgency in the EU in which he urged governments to “act to stem rising public discontent” adding, “they must show that the Union brings tangible benefits to people’s lives.”  (Oh Really????)  He continued with “the ECB cannot sustain the European recovery alone.” (Duh!!!!)  This, after how many years of applying a kick-the-can mentality that segued to helicopter money and a gung ho “whatever it takes the ECB, we’ll do it” attitude.  This is a change of coarse and invites a serious discussion once again about the viability and sustainability of the European Union. Further compounding continental concerns, Deutsche Bank continued as a primary focus and lynchpin to the entire European banking system.  One FIG and one industrial also stood down in the U.S. IG primary markets as well – that I am aware of.

So, when markets are somewhat volatile, as September has been despite $137b IG Corporate and $158b all-in IG, I tend to turn to “go to” contacts for a more detailed discourse.  In other words, those I’ve known forever and who have withstood the test of time.  Believe it or not there aren’t many of THEM around.  They do likewise.  I gave a ring to my favorite Scotsman Mr. Paul Cohen who during his years as a banker at Banque Paribas, BNP Paribas and Dresdner essentially covered most all corporates including some fallen angels.  Besides being an all-around very good guy, he knows his stuff and is a great person for you to reach out to have him add you to his daily disty list.  Paul is a primary market strategist who writes for Bloomberg London covering IG Euro new issuance.  In our inextricably global-linked world economy that I always write about here, minding your dollars and euros makes sense (cents!) Ask him to put you on his loop and please do tell him that the guy-in-the-corner sent you. All free and all informative for each one of YOU! Remember folks, it’s all about timely, accurate information and how you apply it that keeps you on top of your game while better understanding our markets!  So, go ahead and reach out to him.

The Three Musketeers; The Three Little Pigs; The Three Billy Goats Gruff!  Does the power of three really makes things better?  Funnier? Paul and discussed the theory of “threes” this afternoon…….the three deals that stood down that is.  Paul said, “three deals were pulled within 24 hours across the pond as market conditions changed since last week with issuers perhaps needing to be a bit more flexible in terms of their cost of funding expectations.”  He continued………”a flight-to-quality could be in the cards over the next day or two as the market digests the implications of theses pulled transactions beginning with Lufthansa, followed by NordLB and finally Korean Air.” Now, here’s the good part that cuts through the headline –  Lufthansa is a split-rated credit and perceived by many market participants to fall into the lower ratings category due to investment guidelines that typically err on the side of caution while also satisfying the ECB’s CSPP criteria by maintaining one investment grade rating.  NordLB does harbor its own particular “situation” with its shipping business and acquisition of Bremer LB.  Lastly, the Korean Air Lines pull was the result of contagion from Lufthansa.

So, at first blush, market players came in this morning hearing “3 deals were pulled in Europe…..OMG!”  Knowing the smart minds out there and having access to them with a bit of Quig-Pro-Quo thrown in for good measure, reveals a bit more story, a bit more color and a bit more understanding that’s not nearly as frightful as the words Mario Draghi uttered today or that the market is conjecturing as surrounds Deutsche Bank.  Just a helpful tip for you! And a thank you to Paul “Pablo” Cohen.

Tomorrow’s Durable Goods Number Should Result in Issuance and Here’s Why:

 

durable goods reportOn the home front, IG corporates clearly took a breather today which is a good thing.  We have a Durable Goods Orders number out at 8:30am tomorrow morning which is relatively important given recent volatility so, I suspect that number hits first after which if it’s pretty much as expected or <1.5%> we’ll see issuance. The prior number was 4.4% so perhaps it surprises to the upside.  2 out of 3 is 66% so I’ll say I don’t expect it to miss.  Wrightson, for example is generally an outlier but they also happened to be pretty good. They conjecture that tomorrow’s August Durable Goods report will be 1.5% to the upside – a nice swing versus negative expectations.  The reason?  Boeing’s August orders will translate into a 24% increase in civilian aircraft orders in seasonally adjusted terms which will make up for softness elsewhere.  Just putting it out there folks.

 

Global Market Recap

 

o   U.S. Treasuries: 30yr leads UST rally. Bunds & Gilts improved. JGB curve much steeper.

o   Stocks – Bounce back day for U.S. stocks. Europe closed down & Asia rallied.

o   Economic – U.S. consumer confidence stole the show. The strongest since 2007.

o   Overseas economic – China’s industrial profits increased the most in 3 years.

o   Currencies – U.S. outperformed the Euro but lost ground vs. the PND, Yen, CAD & AUD.

o   Commodities – CRB, crude oil, heating oil, gold, copper & silver all down.

o   CDX IG: -1.06 to 78.05

o   CDX HY: +19.57 to 415.59

o   CDX EM: -0.03 to 238.58

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

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

  • The average spread compression from IPTs thru the launch/final pricing of today’s 1 IG Corporate-only new issue was 10.00 bps.
  • BAML’s IG Master Index widened 1 bp to +142 versus +141.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to +138 versus +137.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Global Fixed Income Research widened 1 bp to +190 versus +189.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $12.8b on Monday versus $13.3b Friday and $12b the previous Monday.
  • The 10-DMA stands at $15.5b.

 

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

 

IG Corporate New Issuance This Week
9/26-9/30
vs. Current
WTD – $5.75b
September 2016 vs. Current
MTD – $136.518b
Low-End Avg. $22.13b 25.98% $115.45b 118.25%
Midpoint Avg. $23.30b 24.68% $116.02b 117.67%
High-End Avg. $24.48b 22.49% $116.59b 117.09%
The Low $15b 38.33% $80b 170.65%
The High $36b 15.97% $150b 91.01%

 

Presidential Debate Ratings Set New Records

Yesterday, I wrote the following about last evening’s first Presidential debate between Clinton and Trump, “You can watch it on virtually any major broadcast and/or cable news network as all of them will be televising this one.  It WILL break all Presidential debate records by a LOT.” Well, the results are in.  More than 46 million people watched the debate across six broadcast networks according to preliminary Nielsen data released by Univision.  CNN published its own data confirming, along with virtually all media outlets. That’s a new record and 7.7% more than the 42.7mm viewers who watched the first Obama-Romney debate in 2012 on those same six channels.

Including cable news network ratings, the debate audience soared to 83 million viewers officially becoming the most-watched Presidential debate in history breaking the 80.6 million who watched Jimmy Carter debate Ronald Reagan back in 1980.

Yet another good reason for you to stay tuned into the daily “QC.”

Have a great evening!
Ron Quigley, Managing Director / 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…)

Corporate Bond Issuers Back Up the Trucks In Advance of Delivering New Deals
September 2016      Debt Market Commentary, Recent Deals   

Quigley’s Corner 09.22.16- Corporate Bond Issuers Back Up The Trucks in Advance of Delivering Big Tranche(s) of Fresh Paper

 

Investment Grade New Issue Re-Cap – Backing up the Trucks

Global Market Recap

Deal-of-the Day: All That Glitters IS Gold..Man Sachs

Goldman Sachs Raising the Bar for Diversity and Inclusion Again, and Again
IG Primary & Secondary Market Talking Points

NICs, Bid-to-Covers, Tenors and Sizes

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending September 14th

IG Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

corporate bond issuersLast evening at 9:13PM I closed my “QC” commentary with this: “Folks, Q3 is about over.  You hear that sound?   That’s the sound of trucks?  They’re backing up to print between now and Election Day – BIG TIME. 12 IG issuers are in the pipeline with a whole lot of M&A deals getting closer.”  Well, today did not disappoint. Treasuries were better bid, yields fell, equity markets rallied the world over thanks to yesterday’s FOMC and BoJ dovishishness as issuers took note to quickly back up their trucks to print.  All told beforehand right here in the little ole “QC”.  Just in case any of you aren’t sure what I meant when I say “back up the truck” perhaps this visual might be of assistance because it’s what I mean when I say that:

All right, now we’re understand each other, let’s get to today!

Today’s IG dollar DCM saw those trucks line up and take charge once again featuring 9 IG Corporate issuers across 20 tranches totaling $17.05b.  Adding in one lone SSA visitor to the mix, the all-in IG day totals were 10 issuers, 21 tranches and $18.05b.

What’s more is that we blew right through the IG Corporate syndicate midpoint average forecast calling for $30.38b this week ….to the tune of over 25% having priced $38.013bMTD it’s more of the same people.  Syndicate estimates expected a September total of $116.02b and we’re now over 12% above that amount sitting pretty at  $130.218b. This week isn’t over and we have yet another full week left next week.  The record for September IG Corporate only issuance is $153.32b set in 2013.

Don’t forget that all-in IG issuance including SSA volume is now at $150.568.  The September all-in record, also set in 2013, is $192.14b. That’s’ $41.572b away.

12 deals remain in the pipeline while 14 M&A deals are on the M&A docket for some point before year end or early 2017…..and those are ones I know about!

………..What do you say?  Are we all up for shattering yet another record?  That’s the spirit!  I think so too!  Issuers line up, ready, aim, FIRE!

Today’s largest transaction was Air Liquide’s $4.5b 5-part Senior Unsecured Notes transaction with proceeds used to repay a portion of the bridge loan credit facility associated with its acquisition of Airgas that completed on May 23rd among others.  However, that’s not to say there weren’t other large new issues.  Team Mischler’s “Deal-of-the-Day” belongs to The Goldman Sachs Group, Inc. $3.5b two-part 5NC4 FXD/FRN for which we were honored to be a part of.

 

Global Market Recap

 

o   U.S. Treasuries – Solid session for USTs. Tremendous session for the long end in Europe.

o   Stocks – Stocks were led higher by NASDAQ. Strong in Europe & Asia closed higher.

o   Economic – U.S. data was mixed. Data in China & France was positive.

o   Currencies – USD lost ground vs. 4 of the Big 5. The Yen was the lone loser.

o   Commodities – Back to back strong days for the commodity market.

o   CDX IG: -2.49 to 76.01

o   CDX HY: -9.50 to 381.91

o   CDX EM: -4.62 to 227.04

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

-Tony Farren

 

Deal-of-the Day: All That Glitters IS Gold..man Sachs

 

Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
5NC4 FRN 3mL+equiv 3mL+equiv 3mL+117 3mL+117 <20> bps 3.5 112/110 <3>
5NC4 FXD +140a +125a (+/-5) +120 +120 <20> bps 3.5 117/115 <3>

Mischler Financial is always privileged and honored to be named an active Co-Manager for The Goldman Sachs Group, Inc.  Today we served as a 0.5% active Co-Manager on today’s $3.5b two-part 5NC4 FXD/FRN Senior Unsecured Global Notes new issue. Hop on into the “QC” and let me show you around the new dashboard for my relative value study.

So relative value, as we all know is part art and part science but today’s fair value study is much more creative shall we say.  Always careful to tell the right story in the best way I can, this evening’s deal review will walk you through the “logic” art and science.

J.P. Morgan issued a 5NC4 back in August that many concluded priced about 12 bps behind where a bullet would issue.  What happened at the break, however, changed the logic as it tightened 10 bps points.  Given the same structure, let’s look at today’s Goldman deal in as straight-line approach as we can.  Let’s compare it to the outstanding GS 5-year – the 2.625% due 4/25/2021  – that was G+114 at yesterday’s close. That implies today’s new issue that priced at T+120 came with a 6 bp concession. The trick is valuing the 1-year optionality.  What is that worth?  Additionally, the same structured JPM 2.625% due 8/15/2021 (A3/A-) was also G+114 this morning pre-announcement.  Goldman’s deal is A3/NA) so, factoring let’s say a nickel or 5 bps for the S&P ratings differential one could argue that fair value on today’s new print is +119 or 1 bp NIC.  I could also take an average of the two approaches and call it 3.5 bps NIC.  One thing is for sure, now that both JPM and GS have issued this structure, we’ll likely see more of its kind ahead.  I can also tell you that the session closed with Goldman’s new 5NC4 fixed rate tranche framed in a 117/115 market or, not coincidentally, 3 bps tighter and effectively absorbing the 3 bps NIC.  The FRNs traded at 3mL+112/ or 5 tighter on the bid side.  All good stuff.

When markets re-open, like they did today, post FOMC and BOJ doldrums, we all like to see big banks pave the way by leading the way and setting the tone. Goldman did just that, but it didn’t stop there.

………and here’s a look at final book sizes and the oversubscription rate:

 

GS Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
FRN 1,250 $2.5b 2x
FXD 2,250 $8b 3.56x


Goldman Sachs Raising the Bar for Diversity and Inclusion Again, and Again

I’m actually having difficulty finding new creative ways to thank the “Fine” crew over at the firm with the Midas touch.  Goldman Sachs’ D&I private eye is Jonny Fine.  He’s nurturing an entire syndicate culture under his watch which is the mandate from the inner sanctum at Goldman Sachs.  Today I had no fewer than 5 hands on deck with me for questions, answers, updates, posts, bulletins, announcements, color…..you name it, they are always there for us on deal day or not, the nation’s oldest SDVBE.  There are just a couple of firms out there that shape their D&I promotions with actionable results on deal day. Goldman is tops. They get it by reviewing and scrutinizing our distribution capabilities. I/we learned years ago to vet only the highest caliber middle market accounts.  It’s a lot of work; it’s a lot of late nights on the DCM front.  Without divulging too much, word-of-mouth as to what we do here at Mischler has resulted in top 25 issuers asking us to put together non-deal roadshows for them. Trust me they are large well-known issuers to all of you.  Other tier I issuers, if you will, have been so impressed with our distribution that they are forming partnerships with us to bring our middle markets accounts to sell “other” products to them, away from new issues.  All because they are hearing about our quality investor base.

Firms like Goldman Sachs and Citigroup, to name another are demanding and they expect results. However, when delivered they help us become the best we can be. They then take us to the next level resulting in the aforementioned opportunities. We take what we do seriously and we WILL NEVER take it for granted. When we are rewarded for that hard work, we apportion some of that toward our give back initiatives to those who served, those who sacrificed, and/or their families and children.  It’s all very circular and one feeds the other. We grow our business; we help wounded veterans, we hire and train veterans returning home after active duty. Case in point: Jonathan Herrick another resident former US Marine who personifies what we’re trying to accomplish here in the bigger picture. We train them to keep them here and make them part of our corporate culture. Quality middle market accounts, such as those MFG client investment managers who count on Mischler’s symbiotic relationships with the 6-pack lead underwriters, like those on today’s Goldman Sachs transaction, represent the best incremental distribution network on the Street.  I’d put these institutional accounts up against anyone else’s and call them the best.  They are here throughout the U.S., Europe, Asia. They are banks, insurance companies, re-insurers, they manage endowments and foundations, they are pension funds, they are RIAs, commercial banks, private wealth managers, SFOs, MFOs, captive insurance, etc.  Thanks to firms like Goldman Sachs among others, we reward their high quality patronage and that’s when they begin transacting treasuries, or equities; ABS and MBS business, agencies and municipals both primary and secondary.

All of it began with a soldier, it grew further thanks to earning a minority certification, and as it flourished it’s been supported by a great operations/back office unit that is as buttoned up as our own front line.  Capital continues to grow with each and every DCM opportunity and we do have award winning debt capital markets coverage and fabulous distribution. So, we get it.  And we really do thank Team Goldman.  Our success is a direct result of what Team Goldman Sachs has done to help us become the best we can be. That is genuine and is delivered from every single employee here to all of you at GS.

Thank you Jonny Fine, James White, Jessica “Jess” Stern and the Fine folks at Team GS Syndicate from Tony Shan to Matt Jackson – you guys are the best, and today’s two new additions Elizabeth Plunkett and Jason Ghilarducci.  The two are learning from the best in the business at 200 West Street.  Leave it on the floor every night and be proud that you’re not only at a great firm,  but you are all part of doing amazing things for social responsibility while working on Wall Street. That IS something to brag about.

IG Primary & Secondary Market Talking Points

 

  • Arch Capital Group Ltd., upsized today’s $25 par PerpNC5 non-cumulative preferred, Series “E” transaction to $450mm from $250mm at the launch and at the tightest side of guidance.
  • For the week ended September 21st, Lipper U.S. Fund Flows reported an inflow of $2.122b into Corporate Investment Grade Funds (2016 YTD net inflow of $35.591b) and a net outflow of $273.5m from High Yield Funds (2016 YTD net inflow of $7.433b).
  • The average spread compression from IPTs thru the launch/final pricing of today’s 20 IG Corporate-only new issues was 22.13 bps.
  • BAML’s IG Master Index was unchanged at +142.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +139.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Global Fixed Income Research was unchanged at +190.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $16.3b on Wednesday versus $19.1b Tuesday and $17b the previous Wednesday.
  • The 10-DMA stands at $15.4b.

 

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

 

Have a great evening!
Ron Quigley, Managing Director, Head of Fixed Income Syndicate (more…)

IG Corporate Debt Issuance YTD: 1tn aka 1 TRILLION
September 2016      Debt Market Commentary   

Quigley’s Corner 09.13.16 –2016 IG Corporate Debt Issuance (so far)= $1 T-r-i-l-l-ion!

 

Investment Grade Corporate Debt New Issue Re-Cap – Another Broken Record –

Global Market Recap

IG Primary & Secondary Market Talking Points

New Issues Priced

Lipper Report/Fund Flows – Week ending September 7th

IG Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

 broken-record-ig-debt-mischler

Yesterday I wrote, “the session finished with only those two deals priced totaling $1.2b with a promise from the guy-in-the-corner that tomorrow WILL be a VERY busy day!” Well tomorrow is today and true to my word we had a blockbuster.  I then wrote, “We are only $20.822bn away from $1 trillion in IG Corporate-only issuance YTD.   Last year we set a new IG Corporate-only record by reaching the $1 trillion mark on Thursday, October 1st(see your incoming “Quigley’s Corner” 9-30-2015). We’d shatter that record by nearly three weeks if it happens tomorrow!

I am happy to report that we reached the $1 trillion dollar mark in IG Corporate-only volume at the earliest stage in any year, shattering last year’s record set on October 1st by 18 business days or 2 weeks and 3 days.

13 IG Corporate issuers printed 26 tranches between them today totaling $22.344b5 SSA issuers added 5 tranches totaling $9.25b for an all-in IG day total of 18 issuers, 31 tranches and $31.594b.

There remain 12 new issues in the imminent pipeline either currently road showing, about to conduct investor meetings/calls or have already wrapped those up.  So, there’s plenty of business to go not counting M&A deals of which Shire looms large.

IG Corporate New Issuance This Week
9/12-9/16
vs. Current
WTD – $23.194b
September 2016 vs. Current
MTD – $75.654b
Low-End Avg. $35.83b 64.73% $115.45b 65.53%
Midpoint Avg. $36.91b 62.84% $116.02b 65.21%
High-End Avg. $38.00b 61.04% $116.59b 64.89%
The Low $30b 77.31% $80b 94.57%
The High $46b 50.42% $150b 50.44%


Here’s how it looked:

Category Totals
# of IG Corporate Issuers 12
# of IG Corporate Tranches 25
Total IG Volume $22.194b
# of SSA Issuers 5
# of SSA Tranches 5
Total SSA Volume $9.25b
Total Amount of All-in Issuers 17
Total Number of All-in Tranches 30
All-in Corps + SSA Amount $31.244b

 

Here’s a look at some other records:

 

o   $31.594 ranks as the 5th highest volume day in history for IG Corps plus SSA.

o   $31.594b ranks as the 2nd busiest all-in issuance day of 2016.

 

Global Market Recap

 

o   U.S Treasuries – Terrible day for USTs Bund’s & Gilts also headed south. JGB’s better.

o   Stocks – U.S. down Friday, up yesterday & down today. Europe red & Asia was mixed.

o   Economic – Nothing of note in the U.S. China & Japan data better. Europe mixed.

o   Currencies – Very good day for the USD & DXY Index.

o   Commodities – Crude oil and commodities, in general, struggled.

o   CDX IG: +3.70 to 76.96

o   CDX HY: +16.91 to 413.84

o   CDX EM: +12.92 to 254.60

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

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

  • Liberty Property Trust upsized today’s 10yr Senior Unsecured Notes new issue to $400mm from $300mm at the launch and at the tightest side of guidance.
  • Split-rated Aspen Insurance Holdings Ltd. increased its $25 par PerpNC10 non-cumulative Preferred new issue to $225mm from $150mm at the launch and tightest side of guidance.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 24 IG Corporate-only new issues was 16.99 bps.
  • Including today’s Aspen $25 par Preferred, the average spread compression from IPTs thru the launch/final pricing of today’s 25 IG Corporate new issues was 16.54 bps.
  • BAML’s IG Master Index widened 2 bps to +142 versus +140.  +106 represents the post-Crisis low dating back to July 2007.
  • Standard & Poor’s Global Fixed Income Research widened 1 bp to +190 versus +189.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $12.6b on Monday versus $15.7b Friday.
  • The 10-DMA stands at $13.8b.

 

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.

Ron Quigley, Managing Director / Head of Fixed Income Syndicate (more…)

Leap Year Leads In With Record Corporate Debt Deals
March 2016      Debt Market Commentary, Recent Deals   

Quigley’s Corner 02.29.16 –Leap Year Leads In With $17.4b New Issuance of Corporate Debt Deals

Investment Grade Corporate Bond New Issue Re-Cap

Global Market Recap

IG Primary Market Talking Points –Basking in the Sun..Trust w/ 5-year New Issue

New Issues Priced

NICs, Bid-to-Covers, Tenors and Sizes

Lipper Report/Fund Flows

IG Secondary Market Trade Lab

Economic Data Releases

Rates Trading Lab- The detachment of asset classes

Investment Grade Credit Spreads (by Industry/Rating)

New Issue Pipeline

M&A Pipeline

 

Today was leap year with one extra last day before closing out February. It happens once every four years so that over time, seasons don’t collide; so we don’t get snowfall in summer and sunshine on Christmas hundreds of years from now. However, on this winter day in the Northeast it seemed more spring-like and for the IG dollar DCM it seemed more like Christmas.  Again, considering where we came from two short weeks ago, the IG DCM is not only alive and well but……

 

  • ……at $299b of all-in IG Corporate plus SSA issuance, we have just closed the books on what is the highest volume January & February in history.
  • ……February surpassed the low-, mid- and high-point syndicate forecasts for this month (see the Syndicate IG Corporate-only Volume table just below).
  • ……at $129.30b in all-in (IG Corporate plus SSA) new issuance, it ranks as the third highest volume February on record.
  • …….today posted the fifth busiest day of the year with $17.40b priced across 6 issuers and 15 tranches led by Exxon Mobil’s $12b 8-part.

 

Global Market Recap

 

USTs – Winning start to the week. USTs helped by month end buying & weak U.S. stocks.

Stocks – U.S. stocks weak. Europe rallied except DAX. China led Asia lower.

Economic –  Mixed in U.S./Japan. EU CPI not good. Big calendar tonight/tomorrow.

Currencies – Yen very well bid. USD outperformed the Euro but lost vs. the Pound.

Commodities – Strong session for crude oil and gold.

CDX IG: -2.59 to 107.70

CDX HY: -10.45 to 522.14

CDX EM: +1.39 to 367.96

 

IG Primary Market Talking Points – Mischler Basks in the Sun..Trust 5-year New Issue.

 

  • Mischler thanks SunTrust Banks Inc. (NYSE:STI) for including us as a 2.50% active Co-Manager on their 5-year Fixed Rate Senior Notes new issue.  The final STI order book was $2.8b or 2.8-times oversubscribed.  Straight line comparables are the most reliable when approaching relative value. We looked to the outstanding STI 2.50% due 5/01/2019 that was T+140 big (G+138) pre-announcement.  Applying a 20 bps 3s/5s curve takes you to a fair value of T+158. Today’s new issue printed at T+172 for a 15 bps new issue concession.
  • The Charles Schwab Corporation (NYSE:SCHW) increased today’s PerpNC5 $25 preferred, Series “D” to $750mm from $250mm.
  • Hyatt Hotels Corp. (NYSE:H)upsized today’s announced 10-year Senior Notes new issue to $400mm from $300mm and launched it at the tightest side of guidance.
  • Exxon Mobil Corp. (NYSE:XON) dropped today’s 5-year FRN tranche announced 9=part transaction having secured more than sufficient demand in its 5-year fixed tranche.
  • SunTrust Banks Inc. dropped the 5-year FRN from its earlier announced two-part 5-year FXD/FRN, having secured their funding on strong demand for fixed notes.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 15 IG Corporate-only new issues and one IG-rated Preferred was 15.63 bps.

 

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

 

IG Corporate New Issuance This Week
2/29-3/04
vs. Current
WTD: $17.40b
February 2016 vs. Current
MTD – $107.625b
March 2016
Low-End Avg. $32.22b 54.00% $90.9375b 118.35% $115.59b
Midpoint Avg. $32.76b 53.11% $92.1875b 116.75% $116.13b
High-End Avg. $33.30b 52.25% $93.4375b 115.18% $116.67b
The Low $20b 87.00% $60b 179.37% $100b
The High $41b 42.44% $110b 97.84% $150b

 

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. (more…)

Investment Grade Credit Investor Conundrum-Mischler Comment
February 2016      Debt Market Commentary   

Quigley’s Corner 02.02.16 Credit Investors Confused

 

Investment Grade Corporate Debt New Issue Re-Cap 

IG Primary Market Talking Points

Lipper Report/Fund Flows

IG Secondary Trading Lab

Economic Data Releases

Rates Trading Lab

New IG Issues Priced

New Issue Pipeline

M&A Pipeline

Investment Grade Credit Spreads (by Industry/Rating)

 

 Thanks to the Export-Import Bank of Korea’s $400mm 5-year Green Bond, the IG Corporate DCM prevented another mid-week goose egg.  The tally on today’s dull market was 1 deal and a total of $400mm.  Supply was boosted by SSA issuance to the tune of 3 issuers, 3 tranches and $4.68b bringing the all-in IG day total to 4 prints and $5.084b.  Why?  Simple. Oil was hammered again, down 5% this morning and off 4% at noon to close the session $1.73 or down <5.47%>.  The eight major European exchanges closed the session down an average 2.21%. DOW futures were down 125 pointing to a much lower open after which it nose-dived more than 200 points.  It was <258> at mid-day and closed <296>.  Picking up on yesterday’s “QC” in which I discussed the RRG functionality that showed a rotation out of financials and energy and into defensive sectors namely Utilities, Telecoms and Consumer Staples, markets continued that trend today. The VIX rose 2.05 or 10.26% to close at 22.03 vs. 19.98.  The S&P lost 36. CDXIG 525 widened 4.63 bps.

The T10 is yielding 1.85% a first dating back to April 2015. At what point do UST yields begin to entice issuers despite recent spread widening.

 

With global growth slowing and negative rates in the EU and now Japan, once we do eventually see decent enough market tone in which to price new deals, both large and small investors will flock in unprecedented volumes into higher yielding and safer IG credits.  It WILL happen we just need to see signs of stability and that, as we’ve been witnessing, has become a daily challenge and why one of the Best and Brightest of the Best and the Brightest wrote in response to last Friday’s syndicate forecast poll……”Ron, I can honestly say I have absolutely no idea.”  In markets such as these, that is a very understandable reply. We have currently priced 5.89% of this week’s syndicate midpoint average forecast or $1.4b vs. $23.75b.

 

IG Primary Market Talking Points

 

  • The average spread compression across today’s 1 IG Corporate-only new issues was 17.50 bps from IPTs to the launch.

 

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

 

IG Corporate New Issuance Next Week
2/01-2/05
vs. Current
WTD – $1.40b
February 2016 vs. Current
MTD – $1.40b
Low-End Avg. $23.75b $5.89b $90.9375b $1.54b
Midpoint Avg. $24.375b $5.74b $92.1875b $1.52b
High-End Avg. $25.00b $5.60b $93.4375b $1.50b
The Low $15b $9.33b $60b 2.33b
The High $35b $4.00b $110b $1.27b

 

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 and Sizes

 

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

 

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
2/01
LAST WEEK’S
AVERAGES
AVERAGES
Week 1/18
AVERAGES
Week 1/11
AVERAGES
Week 1/04
New Issue Concessions 10.5 bps 21.77 bps 14.25 bps 12.66 bps 7.62 bps
Oversubscription Rates 6.5x 2.71x 1.96x 2.39x 3.09x
Tenors 5 yrs 7.43 yrs 5.33 yrs 7.41 yrs 6.76 yrs
Tranche Sizes $500mm $940mm $1,235mm $1,901mm $866mm

 

Lipper Report/Fund Flows

 

For the week ended January 27th , Lipper U.S. Fund Flows reported an outflow of $1.187bn from corporate investment grade funds (2016 YTD net outflow of $3.495bn) and a net inflow of $883.3m from high yield funds (2016 YTD net outflow of $4.076bn).

Over the same period, Lipper reported an outflow of $783.7m from loan participation funds (2016 YTD net outflow of $2.489bn).

Emerging Market debt funds reported a net outflow of $407.7m (2016 YTD outflow of $1.268bn).

 

IG Secondary Trading Lab

 

BAML’s IG Master Index was unchanged at +202.  +106 represents the post-Crisis low dating back to July 2007.

Standard & Poor’s Global Fixed Income Research widened 2 bps to +250 versus +248.  The +140 reached on July 30th 2014 represents the post-Crisis low.

Investment grade corporate bond trading posted a final Trace count of $15.4b on Monday versus $19.4b Friday and $14b the previous Monday.

The 10-DMA stands at $18b.

The top three most actively traded IG-rated issues were led by T 4.125% due 2/17/2026 that saw client and affiliate flows account for 81% of the volume and with client purchases 1.5-times sales.

ABIBB 4.90% due 2/01/2046 finished second with two-way client and affiliate flows representing for 70% of the volume.

T 5.65% due 2/15/2047 placed third displaying 68% client and affiliate trades.

 

New Issue Volume

 

Index Open Current Change
IG25 104.02 108.652 4.632
HV25 347.76 365.16 17.40
VIX 19.98 22.03 2.05
S&P 1,939 1,903 <36>
DOW 16,449 16,153 <296>  

 

USD IG Corporates USD Total IG (+ SSA)
DAY: $1.40 bn DAY: $5.084 bn
WTD: $1.40 bn WTD: $6.084 bn
MTD: $1.40 bn MTD: $6.084 bn
YTD: $128.384 bn YTD: $176.208 bn

 

Economic Data Releases

 

TODAY’S ECONOMIC DATA PERIOD SURVEYED ESTIMATES ACTUAL NUMBER PRIOR NUMBER PRIOR REVISED
ISM New York January —- 54.6 62.0 —-
IBD/TIPP Economic Optimism February 47.6 47.8 47.3 —-
Wards Domestic Vehicle Sales January 13.70m 13.79m 13.46m —-
Wards Total Vehicle Sales January 17.30m 17.46m 17.22m —-

 

Rates Trading Lab

 

Things feel pretty bad right now, but it’s still important to keep things in context. The levels we are at are all significant: 1.86 in 10yrs, S&P 1900, CLH6 $30. However, the risk markets lack sponsorship and there are some large bets being placed in vol space banking on (or hedging) continued pressure in them (VIX March 30/40 call spread traded 30k all day) {VIX Index GP <GO>} Tech guys point to this level in TY (130) as an objective, but right now there is no reason to sell anything because demand is there. We all know that can change in a heartbeat, and can also be exacerbated by the fact that there aren’t a lot of shorts left in the market, so I would be very cautious if I was long here. Earlier today, there was a piece I sent out examining the parallels to Jan 2015. However, while central banks rode to the rescue then, it remains uncertain how much firepower they have left and, more importantly, how they are going to use it. Still would like to buy a pullback, though.

-Jim Levenson

 

Recap

 

USTs – Huge rally for Treasurys as risk assets sold off hard.

Stocks – Terrible day in the U.S. & Europe. Nikkei & HS closed red and China rallied.

Economic – Light day in the U.S. U.S. employment data tomorrow and Friday.

Currencies – Mixed session for USD vs. Big 5 & DXY Index closed with a small loss.

Commodities – Crude oil closed below 30 after trading as high as 34.82 last week.

CDX IG: +4.58 to 108.60

CDX HY: +26.60 to 536.66

CDX EM: +16.25 to 386.68

-Tony Farren

 

UST Resistance/Support Table

 

CT3 CT5 CT7 CT10 CT30
RESISTANCE LEVEL 100-226 100-21+ 101-11+ 104-08 108-21
RESISTANCE LEVEL 100-216 100-186 101-06 103-31+ 108-02
RESISTANCE LEVEL 100-20 100-162 101-00+ 103-21 106-30
         
SUPPORT LEVEL 100-166 100-13 100-26+ 103-06 106-09
SUPPORT LEVEL 100-152 100-10+ 100-22+ 102-31+ 105-29
SUPPORT LEVEL 100-13+ 100-08+ 100-18 102-23+ 105-17+

 

Tomorrow’s Calendar

 

China Data: Caixin China PMI Services/Composite

Japan Data: Nikkei Japan PMI Services/Composite, Consumer Confidence Index

Australia: AiG Perf of Services Index, Trade Balance, Building Approval

EU Data: EU-Jan Services PMI, Dec Ret Sales

S. Data: U.K. Jan Services PMI

Supply: German 5y, U.K. Buyback (£1.4bn 7-15y)

Events: ECB 7d$

Speeches: Kuroda (more…)

Mischler Baristas Help Starbucks ($SBUX) Serve Up $750mil Debt Market Offering
December 2013      Debt Market Commentary, Recent Deals   

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).

Deal-of-the-day: Starbucks

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. 

Mischler Baristas (l-r) Leslie Graves, Ron Quigley, CEO Dean Chamberlain, Rob Karr

Mischler Baristas (l-r) Leslie Graves, Ron Quigley, CEO Dean Chamberlain, Rob Karr

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…)