Browsing articles tagged with "Geopolitical Risk Archives - Mischler Financial Group"
BAML Leads $11.8b Day for Investment Grade Issuance-Mischler DCM Comment
July 2017      Debt Market Commentary   

Quigley’s Corner 07.18.17  -Today’s Investment Grade Issuance: BAML Takes Top Spot in Day’s $11.8b Investment Grade New Issue Activity

Below is the opening extract from Quigley’s Corner aka “QC”  Tuesday July 18, 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 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 12th              

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 4 issuers pricing 9 tranches between them totaling $11.80b.  The SSA space added 1 well-telegraphed issue in the form of the Kingdom of Sweden’s $2.75b 2-year thereby bringing the all-in IG day totals to 5 issuers, 10 tranches and $62.89b.  CDX IG reached another new tight today closing at 57.349 contracting  <0.128>.

Bank of America posted Q2 earnings early this morning beating on EPS ($0.46 vs. $0.43) and revenues ($22.829b vs. $21.781b) and fixed income trading ($2.254b vs. $2.22b) although net interest income was off ($11b vs. $11.34b).  Our nation’s second largest bank as measured by AUM, wasted no time in capitalizing on the overall positive earnings by announcing a mega $7.00b 4-part.  As I wrote here in last Thursday’s “QC” in reviewing Bank of America’s Q3 Outlook call as told by Kevin Barthelmes of BAC Syndicate, “2-, 3- and 5-year FRN issuance is up 40% to 45% YTD with lots of that volume originating from Asia. Notably, we are also expecting more callable structures, for example, 2NC1 and 3NC2 issuance.” Lo and behold mid-morning today BAC announced a 4nc3 FRN, a 4nc3 fixed-to-FRN, a 6nc5 and 11nc10.  So, there really is good stuff here in the “QC” folks.

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 105.68% of this week’s syndicate midpoint average forecast or $30.35b vs. $28.72b.
  • MTD we’ve priced 74.51% of the syndicate forecast for July or $62.89b vs. $84.40b.
  • There are now 8 IG Corporate, Yankee and/or SSA new issues in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points

  • DBS Group Holdings Ltd., dropped the 5yr fixed rate tranche from today’s earlier announced two-part 5yr FXD/FRN securing sufficient 5yr funding in the FRN tranche.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 9 IG Corporate-only new issues, excluding HIS, was <16.44> bps.
  • BAML’s IG Master Index tightened 1 bp to +110 vs. +111.  +106 represents the post-Crisis low dating back to July 2007.
  • The average spreads across 5 of the 19 major industry sectors tied post-Crisis lows today with a sixth setting a new low. That’s 31.5% of the sectors.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.05.
  • Standard & Poor’s Investment Grade Composite Spread tightened 1 bp to +153 vs. +154.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $14.8b on Monday versus $11.2b on Friday and $14.0b the previous Monday.
  • The 10-DMA stands at $14.1b. 

Global Market Recap 

  • U.S. Treasuries – Rally led by the 10yr on low inflation & political chaos in the U.S.
  • Overseas Bonds – JGB’s improved except the 2yr. Back-to-back rallies in Europe.
  • 3mth Libor – Set at the highest yield since March 2009 (1.30694%).
  • Stocks – Mixed heading into the close.
  • Overseas Stocks – China & HK higher. Japan lower. Poor session in Europe.
  • Economic – Import price index MoM was negative for the 3rd time in 4 months.
  • Overseas Economic – China good & Japan bad. EU ZEW’s down. U.K. CPI lower.
  • Currencies – A BAD & I mean B-A-D day for the USD. FX’s markets were on the move.
  • Commodities – took advantage of the weaker USD.
  • CDX IG: -0.10 to 57.38
  • CDX HY: +0.68 to 323.09
  • CDX EM: -0.13 to 195.13

*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 July 4th. Continues development, improving accuracy & distance in defiance of G-20 protests; Lack of Chinese mediation; Recent Otto Warmbier death; U.S. sanctions certain Chinese banks and individuals to influence PROC pressure on NOKO.
ELEVATED
BREXIT Fallout
·          U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can.
CAUTION
“U.S. political gridlock”
Escalating war in Syria
·          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 accuse Qatar of backing terrorism; 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.

MODERATE ·          China hard landing – rising corporate debt have the OECD and IMF concerned.

·          Venezuela – low oil prices/Maduro resistance impacting ability to repay debt; civil unrest.

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
7/17-7/21
vs. Current
WTD – $30.35b
July 2017
Forecasts
vs. Current
MTD – $62.89b
Low-End Avg. $27.78b 109.25% $83.87b 74.99%
Midpoint Avg. $28.72b 105.68% $84.40b 74.51%
High-End Avg. $29.66b 102.33% $84.92b 74.06%
The Low $20b 151.75% $70b 89.84%
The High $36b 84.30% $111b 56.66%

 

 

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…)

BAML Q3 Debt Market Issuance View-Expectation Management 101
July 2017      Debt Market Commentary   

Quigley’s Corner 07.13.17– Day’s IG DCM Activity + Dialed In to BAML Q3  Debt Market Issuance Outlook 


Investment Grade New Issue Re-Cap

The BAML Q3 Outlook Call- A View Courtesy of Mother Merrill Top Guns

Today’s IG Primary & Secondary Market Talking Points

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

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

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending July 5th

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

Today’s IG Corporate dollar primary market featured only one domestic issuer – Marathon Oil – among two other Yankee issuers.  3 issuers priced 4 tranches between them totaling $2.30b.  The SSA space contributed 1 deal, the well-telegraphed $5.00b 4-part for JBIC that boosted the session’s all-in IG Corporate and SSA day total to 4 issuers, 8 tranches and $7.30b.

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 146.79% of this week’s syndicate midpoint average forecast or $26.79b vs. $18.25b.
  • MTD we’ve priced 38.55% of the syndicate forecast for June or $32.54b vs. $84.40b.
  • There are now 5 IG Corporate, Yankee and/or SSA new issues in the IG credit pipeline.

So, tomorrow we finally kick off six-pack U.S. bank earnings with Citigroup, J.P. Morgan and Wells Fargo reporting.  Next Tuesday is BAML and Goldman Sachs followed by Morgan Stanley on Wednesday.  Hopefully these market leaders break open the issuance drought in short order and subsequently lead the way for all the issuance universe who they bank up to the traditional mid-August thru Labor Day slow-down.

The BAML Q3 Outlook Call
*Please note that this sub section is discerned from my own note taking. I own any/all discrepancies or inaccuracies vs. the call although I represent there should be none.  Thanks! -RQ

Today was also BAML’s always meaningful Quarterly Outlook Call. Here’s a brief run-down:


High Yield Issuance

High Yield issuance is up 20% YoY but all related to Q1 volume. Looking at Q2 business, issuance is down $10b YoY.  From a sector perspective HY saw big pick-ups in the Industrial, Healthcare and Energy sectors.  There was a notable fall-off in the TMT sector. The remaining sectors have been fairly consistent YTD.  Two-thirds of high yield issuance has been motivated by re-financings. M&A volumes continue to represent about 20% of HY issuance volume. Pick-ups were seen in triple-“CCC” rated issuance to $17b from $4b.  Euro issuance represented about €32b and a hefty £10b. Euro and Sterling issuance continues to illustrate overall growth for HY issuance.

BAML holds strong convictions for re-financing trades as issuers can lock in highly favorable long-term rates in here and looking forward. $50b is committed to M&A financings for the remainder of the year predominantly focused on longer tenors with $10b of that in new HY issuance.

……and now for the High Grade Issuance Outlook

BAML Syndicate’s Kevin Barthelmes did a great job pinch hitting for Dan Mead today in reviewing YTD new issuance as well as the 2H 2017 Outlook.

Here is all the stuff you WANT and NEED to know:

YTD IG ex-SSA supply volume for the first half of 2017 is up 1.8% YoY.  (The “QC” IG Corporate-only count is $754b YTD). BAML had called for a 5-7% decline in IG issuance for 2017 at the end of last year.  The YTD split is as follows: $430b (Corporates) down <3.5%> YoY and $300b (Financials) up 10% versus 2016.  Issuance pressure was seen mostly from the M&A space that was markedly down year-over-year.  YTD M&A driven issuance is expected to be $140b-145b or 10% of IG overall supply. In 2016 we saw $290b which represented 20% of issuance in 2016.

In terms of the back half of 2017, the themes are similar to Q2 2017. Expectations are for corporate supply to be down on the year given the decline in M&A. This July, we expect issuance to be down about 12% versus last year. We also experienced a robust August and September in 2016 which is not expected this year. Keep in mind that Q1 2017 was a record breaking quarter in terms of new issuance. Additionally, Q4 2016 saw companies motivated to price deals ahead of last November’s Presidential election that boosted volumes. BAML does not expect a repeat of July through September again this year.

FRNS and Callable Structures En Vogue

2-, 3- and 5-year FRN issuance is up 40% to 45% YTD with lots of that volume originating from Asia. Notably, we are also expecting more callable structures, for example, 2NC1 and 3NC2 issuance. Expect to see a continuance of that in the second half of the year. It does not feel as though issuers are getting worried about rates at all. Dialogue outside of M&A has been primarily on liability management issuance of which we’ve had roughly $40b YTD.  Expect another $40b in LM issuance in the second half as well which would represent a 10-15% increase versus 2016.

So, to recap, here are the issuance outlook themes for the second half of 2017:

  • Lack of supply
  • Continued FRN demand and callable structures
  • Liability Management issuance
  • Strong Capital/Low Growth

Thank you to all those a who contributed on today’s BAML Outlook Call and in particular I’d like to send shout-outs to the always differentiating intel and commentaries from those who spoke from the sectors I cover here at Mischler – namely Hima Inguva (Banks) and Peter Quinn (Electric Utilities & Power). Listening is always the most informative form of communication.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • For the week ended July 5th, Lipper U.S. Fund Flows reported an inflow of $2.299b into Corporate Investment Grade Funds (2017 YTD net inflow of $71.493b) and a net outflow of $1.144b from High Yield Funds (2017 YTD net outflow of $8.865b).
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 4 IG Corporate-only new issues, excluding HIS, was <25.625> bps.
  • BAML’s IG Master Index was unchanged at +112.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.06.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +155.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $18.7b on Wednesday versus $17.5b on Tuesday and $13.7b the previous Wednesday.
  • The 10-DMA stands at $14.7b.

 

Global Market Recap

 

  • U.S. Treasuries – Draghi, Yellen & supply hurt USTs today.
  • Overseas Bonds – 30yr JGB rallied 2.6 bps. EU lost ground with Peripherals leading the way.
  • Stocks – U.S. stocks closed with gains.
  • Overseas Stocks –  Another rally for Hang Seng. Europe closed with gains.
  • Economic – PPI was tame. Yellen sounded more hawkish today vs. yesterday.
  • Overseas Economic – China data was very good. There is no inflation in Europe
  • Currencies: USD closed mixed vs the Big 5. DXY Index hit low since Sept
  • Commodities: Good day for cruder oil. Metal closed red & wheat was hammered
  • CDX IG: -1.08 to 58.83
  • CDX HY: -4.06 to 328.42
  • CDX EM: -1.21 to 196.92

*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 July 4th. Continues development, improving accuracy & distance in defiance of G-20 protests; Lack of Chinese mediation; Recent Otto Warmbier death; U.S. sanctions certain Chinese banks and individuals to influence PROC pressure on NOKO.
ELEVATED
BREXIT Fallout
· U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. Italian domestic bank bail-out outside EU “rule of law” concern for EU stability.
CAUTION
“U.S. political gridlock”
Escalating war in Syria
· Trump financial, healthcare, tax and infrastructure reform challenges & consensus GOP support to pass legislation questioned/Dems lose 4 consecutive special elections despite media bias.

· 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 accuse Qatar of backing terrorism; Land, air and sea blockade.

· Italian debt-to-GDP ratio is 133% – world’s 3rd highest. €17bn gov’t. bail out of two Italian banks.

· Closing in on ISIS is very problematic as it is scattering 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.

MODERATE · Trump/Putin meet at G-20 Summit in Hamburg last week. Move toward mutual cease fire in Syria  to identify de-escalation zones; discussed hacking controversy and agreed to improved relations.

· China hard landing – rising corporate debt have the OECD and IMF concerned.

Venezuela – tumbling oil prices/Maduro resistance impacting ability to repay debt; civil unrest.

MARGINAL
2018 U.S. Recession
Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak; sights  on one more rate hike in 2017; concerns over lack of inflation and unwinding $4.5 trillion b/c.

 

Syndicate IG Corporate-only Volume Estimates This Week and July

 

IG Corporate New Issuance This Week
7/10-7/14
vs. Current
WTD – $26.79b
July 2017
Forecasts
vs. Current
MTD – $32.54b
Low-End Avg. $17.83b 150.25% $83.87b 38.80%
Midpoint Avg. $18.25b 146.79% $84.40b 38.55%
High-End Avg. $18.67b 143.49% $84.92b 38.32%
The Low $15b 178.60% $70b 46.49%
The High $28b 95.68% $111b 29.32%

 

 

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…)

Economic Data Misses Mark; CBS Corp. Upsizes Debt Offering-Mischler Comment
June 2017      Debt Market Commentary   

Quigley’s Corner 06.26.17 – Economic Data Misses Mark; America’s Most Watched Network Upsizes Debt Offering

 

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 June

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

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

Indexes and New Issue Volume

Lipper Report / Fund Flows

IG Credit Spreads by Rating

IG Credit Spreads by Industry

Economic Data Releases

New Issue Pipeline

M&A Pipeline

Rates Trading Lab

Tomorrow’s Calendar

 

Durable Goods, Cap Goods and Manufacturing economic data all missed estimates this morning and the Supreme Court reinstated a large part of President Trump’s travel bans from six Muslim countries for a period of 90 days and 120 days for all refugees.  The six countries in question are: Iran, Libya, Somalia, Sudan, Syria and Yemen. In international news, Italy bailed out two failed banks to the tune of €17b. In light of Macron’s victory in France and subsequent Parliamentary majority, it has been thought that a German-French alliance to motivate deeper EU integration would anchor the continental experiment.  Instead, Italy’s state bail out opened it to EU criticism.  In the end, each nation will watch over its own despite EU rules and regulations highlighting each member’s disparate individual histories, languages, borders and cultures. Germans are working to help support the quality of life in France.  Such exceptions to EU laws as Italy applied today, call into question just how integrated the EU can ever be.

Today the IG Corporate dollar DCM hosted 7 issuers that priced 9 tranches between them totaling $3.65b.  The SSA space was dormant today.

Let’s now take a look at how this week’s IG Corporate volume numbers stack up against the WTD and MTD syndicate estimates: 

  • The IG Corporate WTD total finished having priced only 22.76% of this week’s syndicate midpoint average forecast or $3.65b vs. $16.04b.
  • MTD we’ve now priced 84.00% of the syndicate forecast for June or $76.42b vs. $90.98b.
  • There are now 8 IG Corporate, Yankee and/or SSA new issues in the IG credit pipeline.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • CBS Corp. (NYSE:CBS) upsized today’s two-part 5s/10s Senior Notes new issue to $900mm from $700mm 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 9 IG Corporate-only new issues was <17.50> bps.
  • BAML’s IG Master Index was unchanged at +118.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.12.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +160.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $11.8b on Friday versus $16.4b on Thursday and $13.3b the previous Friday.
  • The 10-DMA stands at $15.6b.

 

Global Market Recap

 

  • U.S. Treasuries – 30yr continues to dominate in price & on the curve. Strong 2yr auction.
  • Overseas Bonds – JGB’s mixed. Europe had mostly green. Supply tonight/tomorrow.
  • Stocks – S&P and Dow higher and NASDAQ lower heading into the close.
  • Overseas Stocks – Stocks improved in Asia & Europe.
  • Economic – More disappointing/weaker data in the U.S.
  • Overseas Economic – German IFO (3) data was stronger. Weaker data in Japan.
  • Currencies – USD better bid vs. the Euro, Pound & Yen but weaker vs. CAD & AUD.
  • Commodities – CRB & crude oil with small gains. Gold & wheat headed south.
  • CDX IG: -0.78 to 59.57
  • CDX HY: -2.40 to 333.04
  • CDX EM: -1.98 to 196.30

*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 continues missile tests with improving accuracy in defiance of protests in G-Zero world.
ELEVATED
BREXIT Fallout
·           U.K. PM May is on the hot seat but softer BREXIT talks are expected as a result. Macron-Merkel

coalition to squeeze U.K. for all it can. Italian bank bail-out outside EU rule of law, concern

CAUTION
“U.S. political gridlock”
Fed Balance Sheet
Escalating war in Syria
·           U.S. shoots down Syrian SU-22 that bombed SDF backed-forces as war escalates. Russia warns

it suspended cooperation & will track and shoot down coalition planes west of Euphrates.

·           FBI Chief Mueller investigating Trump for obstruction of justice. Pence & others secures lawyer.

·           GCC Crisis as Saudis, UAB, Egypt, Bahrain & 5 others accuse Qatar of backing terrorism/

Yemen, Mauritius, Maldives, Mauritania and Maldives join in severing diplomatic ties.

·           Trump tax reform challenges & consensus GOP support to pass legislation questioned.

·           U.S. partisan politics/gridlock/media bias.

·           Shrinking the Fed’s balance sheet/higher volatility 2H17.

·           Italian debt-to-GDP ratio is 133% – world’s 3rd highest. €17bn gov’t. bail out of two Italian banks.

·           ISIS becoming scattered across wider MENA region and more difficult to contain as a result.

·           U.K. terror alert remains on “Severe” vs. “Critical.” Attack “highly likely” vs. “imminent.”

MODERATE ·           Venezuelan civil unrest

·           U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions

against Russia in 98-2 vote.

·           Russia meddling in international elections/Russia in expansion mode.

·           China hard landing?

MARGINAL
2018 U.S. Recession
·           Chance of a 2018 U.S. recession.

 

Syndicate IG Corporate-only Volume Estimates This Week and June

 

IG Corporate New Issuance This Week
6/26-6/30
vs. Current
WTD – $3.65b
June 2017
Forecasts
vs. Current
MTD – $76.42b
Low-End Avg. $15.46b 23.61% $90.04b 84.87%
Midpoint Avg. $16.04b 22.76% $90.98b 84.00%
High-End Avg. $16.62b 21.96% $91.92b 83.14%
The Low $10b 36.50% $75b 101.89%
The High $21b 17.38% $110b 69.47%

 

 

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.

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.
6/19
TUES.
6/20
WED.
6/21
TH.
6/22
FRI.
6/23
AVERAGES
WEEK 6/19
AVERAGES
WEEK 6/12
AVERAGES
WEEK 6/05
AVERAGES
WEEK 5/29
AVERAGES
WEEK 5/22
AVERAGES
WEEK 5/15
New Issue Concessions 3.20 bps 0.60 bps <11.67> bps 0.00 bps/flat N/A <4.3> bps <2.14> bps <0.13> bps <0.15> bps <5.45> bps 1.24 bps
Oversubscription Rates 3.61x 2.27x 2.55x 2.40x N/A 2.85x 3.76x 3.10x 2.87x 3.74x 3.20x
Tenors 9.37 yrs 10.30 yrs 8.78 yrs 10 yrs N/A 9.37 yrs 13.02 yrs 10.07 yrs 7.03 yrs 11.37 yrs 8.69 yrs
Tranche Sizes $692mm $300mm $1,272mm $500mm N/A $820mm $646mm $543mm $798mm $817mm $931mm
Avg. Spd. Compression
IPTs to Launch
<21.44> bps <12.50> bps <19.28> bps <15.00> bps N/A <18.76> bps <19.74> bps <15.95> bps <17.51> bps <20.05> bps <17.81> bps

 

New Issues Priced

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

Please Note: for ratings I use the better two of Moody’s, S&P or Fitch. (more…)