Browsing articles tagged with "investment grade corporate bond Archives - Mischler Financial Group"
Investment Grade Corporate Bond DCM Scorecard 06-27-17- Mischler Debt Market Commentary
June 2017      Debt Market Commentary   

Quigley’s Corner 06.27.16    Investment Grade DCM Scorecard; AIG, American Tower, GM Financial, Charter Comm, Enbridge and Regency Centers LP

 

Investment Grade Corporate Bond  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

New Issues Priced

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

 

Today the IG Corporate dollar DCM hosted 6 issuers that priced 12 tranches between them totaling $6.75b.  The SSA space featured a $300mm 5-year Green Bond new issue from KDB bringing the combined IG Corporate and SSA day total to 7 issuers, 13 tranches and $7.05b.

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 64.84% of this week’s syndicate midpoint average forecast or $10.40b vs. $16.04b.
  • MTD we’ve now priced 91.42% of the syndicate forecast for June or $83.17b vs. $90.98b.
  • There are now 10 IG Corporate, Yankee and/or SSA new issues 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 12 IG Corporate-only new issues was <14.04> bps.
  • BAML’s IG Master Index tightened 1 bp to +117 versus +118.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 1.11 versus 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 $15.0b on Monday versus $11.8b on Friday and $13.0b the previous Monday.
  • The 10-DMA stands at $15.8b. 

Global Market Recap 

U.S. Treasuries – followed European bonds south.

Overseas Bonds – 2yr JGB rallied 3 bps. Europe hit very hard on Draghi.

Stocks: NASDAQ having a bad day heading into the close

Overseas Stocks: Asia had small gains. Europe lost ground

Economic: US data took a back seat to the comments from ECB Pres. Draghi

Overseas Economic: Not really a factor

Currencies: USD lost ground vs 4 of Big 5. Great day for the Euro & bad for DX

Commodities: Crude oil had a good day

CDX IG: +1.85 to 61.45

CDX HY: +6.07 to 339.84

CDX EM: +3.46 to 199.55

*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;

Lax China involvement; Recent Otto Warmbier death; Frictional hot spot of the world for “event.”

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. shoots down Syrian SU-22 that bombed SDF backed-forces; Russia warns that it suspended

cooperation & will track down and shoot coalition planes west of Euphrates. Potential for

escalation between the U.S. & Russia is real. Turkey, Iran, Israel loom large in this scenario.

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

against Russia in 98-2 vote; Russia in expansion mode; meddling in international elections.

·          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.

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

·          Closing in on ISIS has also scattered it across wider MENA region and Europe.

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

·          Venezuela – tumbling oil prices could impact 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 and sights

on one more rate hike in 2017.

 

Syndicate IG Corporate-only Volume Estimates This Week and June

 

IG Corporate New Issuance This Week
6/26-6/30
vs. Current
WTD – $10.40b
June 2017
Forecasts
vs. Current
MTD – $83.17b
Low-End Avg. $15.46b 67.27% $90.04b 92.37%
Midpoint Avg. $16.04b 64.84% $90.98b 91.42%
High-End Avg. $16.62b 62.58% $91.92b 90.48%
The Low $10b 104.00% $75b 110.89%
The High $21b 49.52% $110b 75.61%

 

 

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

 

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

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
6/26
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 <3.83> bps <4.3> bps <2.14> bps <0.13> bps <0.15> bps <5.45> bps 1.24 bps
Oversubscription Rates 3.66x 2.85x 3.76x 3.10x 2.87x 3.74x 3.20x
Tenors 8.92 yrs 9.37 yrs 13.02 yrs 10.07 yrs 7.03 yrs 11.37 yrs 8.69 yrs
Tranche Sizes $406mm $820mm $646mm $543mm $798mm $817mm $931mm
Avg. Spd. Compression
IPTs to Launch
<17.50> bps <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…)

The Circus Comes To Town (Hempstead, NY) -Mischler Debt Market Comment
September 2016      Debt Market Commentary   

Quigley’s Corner Weekend Edition 09.23.16- The Circus Comes to Town; Ringling Brothers Barnum and Bailey Presidential debates

 

Investment Grade Corporate Bond New Issue Re-Cap – “The Ronald” Pre-Debate Comment

IG Primary & Secondary Market Talking Points

“The Best and the Brightest”  IG Fixed Income Syndicate Forecasts and Sound Bites for Next Week 

New Issues Priced

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

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending September 14th

Investment Grade Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

 

Two IG Corporate issuers took advantage to price new prints this afternoon.  5-BBB First Midwest Bancorp issued a 10-year Subordinated Notes deal and Flowers Foods, Inc. brought an upsized $400mm 10-year Senior Notes deal. So, 2 IG Corporate deals, 2 tranches for a total of $550mm.  Additionally, the SSA space featured the Russian Federation that tapped its outstanding 4.75% due 5/27/2026 to the tune of $1.25b bringing its total amount outstanding to $3b and resulting in a Friday all-in IG day total of 3 issuers, 3 tranches and $1.7b.

As we look toward next week, our IG primary markets will slow down a bit from the rabid pace of these last couple of weeks with roughly $20-25b expected.  I am a big fan of the higher end of supply estimates given Central Bank dovishness, the approach of Q3 earnings and the quickly approaching the circus comes to town (of Hempstead, NY, home of Hofstra University where the first round of the Ringling Brothers Barnum and Bailey Presidential debates will be held on Monday, September 26th.  I am personally looking forward to getting back to some good old fashioned comedy, which I’m sure it will be folks.  Election Day is Tuesday, November 8th so, issuers, bankers and syndicate managers have a window open from now through then after which we’ll enter a period of listening defining and second guessing new administration policies beginning in 2017 and cabinet appointments whoever winds up pulling this election off.  As of now it IS very much up in the air and I expect it to be VERY close as in down-to-the-wire and the dark horse could win this one so DO NOT BE SURPRISED.  Take it from…well, Tthe Ronald! Sorry but I couldn’t resist that one!

Anyway, another great week for the IG DCM.  As this is the “QC’s” Friday edition just scroll below to find out what the top syndicate desks have to say about next week’s forecasts.  I personally err to the upside as I said earlier.  I am calling for $30b+ but do the prudent thing and digest the numbers and more importantly read the thoughts of the Best and Brightest that syndicate has to offer in the section named for them just below a bit.

 

IG Primary & Secondary Market Talking Points

 

  • Flowers Foods Inc. upsized today’s 10-year Senior Notes new issue to $400mm from $300mm at the launch and at the tightest side of guidance.
  • Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 44 deals that printed, 25 tightened versus NIP for a 57.00% improvement rate while only 14 widened (32.00%) 4 were trading flat (9.00%) and 1 was not available or N/A (2.00%).
  • 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 1 IG Corporate-only new issue that posted price evolution was 17.5 bps.
  • BAML’s IG Master Index tightened 1 bp to +141 versus +142.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to +137 versus +138.  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 $18.5b on Thursday versus $16.3b Wednesday and $15.9b the previous Thursday.
  • The 10-DMA stands at $15.7b.

 

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

 

IG Corporate New Issuance This Week
9/19-9/23
vs. Current
WTD – $38.563b
September 2016 vs. Current
MTD – $130.768b
Low-End Avg. $29.09b 132.56% $115.45b 113.27%
Midpoint Avg. $30.28b 127.35% $116.02b 112.71%
High-End Avg. $31.48b 122.50% $116.59b 112.16%
The Low $20b 192.81% $80b 163.46%
The High $40b 96.41% $150b 87.18%

 

NICs, Bid-to-Covers, Tenors and Sizes

 

Here’s this week’s day-by-day re-cap of key primary market driver averages for IG Corporates followed by this week’s and the prior three week’s averages:
Please note that this week’s average tenors and tranche sizes are slightly different than what I posted in the aforementioned question to the Best and Brightest as it reflects today’s two new issues for First Midwest Bancorp and Flowers Foods. Those two issues announced after I sent my survey question out. Thanks for understanding! RQ

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
9/19
TUES.
9/20
WED.
9/21
TH.
9/22
FRI.
9/23
THIS WEEK’S
AVERAGES
AVERAGES
WEEK 9/12
AVERAGES
WEEK 9/05
AVERAGES
WEEK 8/29
New Issue Concessions <2.81> bps 4 bps N/A 1.92 bps N/A 0.69 bps 4.66 bps 1.30 bps 5.47 bps
Oversubscription Rates 3.15x 2.40x N/A 3.32 bps N/A 3.23x 3.47x 3.23x 2.18x
Tenors 12.13 yrs 8 yrs N/A 8.05 yrs 10 yrs 9.36 yrs 11.28 yrs 9.42 yrs 4.47 yrs
Tranche Sizes $1,426mm $642mm N/A $852mm $150mm $964mm $710mm $719mm $820mm

 

“The Best and the Brightest” –  Syndicate Forecasts and Sound Bites for Next Week 

The question posed to the “Best and the Brightest” early this morning was:

“Good morning and a Happy Friday to you!  One heck of a week eh?  We blew right past this week’s syndicate midpoint average forecast by 26% or $38.16 vs. $30.28b. We also surpassed the syndicate estimates for September IG Corporates by 12% or $130.36b vs. $116.02b……with another week to go!  All-in IG supply including SSA issuance is now at $151.96b.  That represents the fourth busiest month of this prolific year. To put that into proper context, $4b more of all-in supply puts this month into 9th place all-time; $27b puts us third place ALL-TIME.

This week hosted more dovishness from the FOMC and BOJ that fueled yesterday’s $17+b corporate supply.    Here are this week’s IG Corporate-only key primary market driver averages:

 

o   NICS:  0.69 bps

o   Oversubscription Rates: 3.23x

o   Tenors:  9.33 years

o   Tranche Sizes: $1,000mm

 

Versus last Friday’s four key primary market driver averages, NICs tightened 3.97 bps to 0.69 vs. 4.66 bps. while oversubscription rates remain strong at 3.23x losing 0.24x vs. last week’s 3.47x bid-to-cover rate.  Average tenors contracted 1.95 years to 9.33 years vs. 11.28 years but tranche sizes swelled significantly by $290mm to an even $1b vs. last week’s average $710mm.   

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). 

Week-on-week, BAML’s IG Master Index tightened 2 bps to +141 vs. last Friday’s +143 close.  Spreads across the four IG asset classes tightened 2 bps to 31.50 vs. 33.50. Looking at the 19 major industry sectors, spreads tightened by 1.74 bps to an average 38.00 vs. 39.74 off their post-Crisis lows..
And now I ask the question what are YOUR thoughts and number for next week’s IG new issue volume? 

 (canvass results of fixed income syndicate desks is available exclusively to recipients of the QC Distribution List)

Have a great weekend!
Ron (“The Ronald”) Quigley, Managing Director / Head of Fixed Income Syndicate

(Above canvass results of fixed income syndicate desks is available exclusively to recipients of the QC Distribution List) 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…)

US GDP-Big Miss; Rates: Lower For Longer; Mischler Weekend Update
July 2016      Debt Market Commentary   

Quigley’s Corner 07.29.16- U.S. GDP: A Big Miss; Rates: Lower for Longer

 

Investment Grade Corporate Debt New Issue Re-Cap – U.S. Misses GDP Big Time.  You Know What That Means..

Global Market Recap

IG Primary Market Talking Points

Lipper Fund Flows

“The Best and the Brightest” –  Syndicate Forecasts and Sound Bites for Next Week

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

Decades’ Worth of August IG Corporate and SSA Issuance-“Knowing the Past for the Future”

Investment Grade Credit Spreads (by Rating/Industry)

IG Secondary Market Trade Lab

Economic Data Releases

Rates Trading Lab-“Buy Dips; Rinse. Repeat. Rinse. Repeat.”

New Issue Pipeline

M&A Pipeline

 

TGIF folks!  It was a no print Friday readers and it’s been a whale of a week for Team Mischler. We‘d just like to thank Apple (NASDAQ:AAPL), Verizon (NYSE:VZ) and Goldman Sachs (NYSE:GS) once again for working with us this week.  I’d also like to thank the MFG institutional accounts that were responsive to our capital market initiatives this week.  You all know who you are.  None of this would be possible without you.  Trusting, believing; loyal and faithful.  That says it all and with great appreciation for helping pull our program together, we thank you.
lower-for-longer-interest-rates-mischler-
As for next week negative rates in Europe and Japan, Abe announced doubling down on ETF purchases, sorely disappointing the market that knows there is a HUGE stimulus package hovering around Japan. Fear persists in the EU and the world’s engine – the U.S. of A.  missed GDP big time this morning by more than 50% or 1.20% vs. 2.50%! The Mantra became louder today. It’s ….LOWER-for-LONGER. USTs rallied as a result. CT10 is 1.45%. Issuers are blasting out of black-outs and will be ready, willing and able to blow out deals heading into what will be a nice first half of August issuance as we head to a traditionally slow second half of the month.

Look for $25-30b to price next week in IG Corporate-land and $78b in August.  But what the heck, why listen to the guy-in-the-corner when I bring you the top syndicate desks each and every Friday to share their own thoughts and numbers with you.  Stop by Tony’s Global Recap first for a snapshot of today’s global market news (hey there it is right below) and then scroll to the “Best and the Brightest.”  They all checked into the “QC” this morning and afternoon and they are all ready to share their thoughts.  So, read all about it. 

Global Market Recap

 

  • S. Treasuries – Strong session for USTs led by the belly on the weak GDP release.
  • 3mth Libor – Set at highest since May 2009 (0.75910%).
  • Stocks – U.S. stocks mixed (3:30pm). S&P traded at all-time high & NASDAQ YTD high.
  • Overseas Stocks – Bank stocks led Europe higher. Nikkei improved & Shanghai lost.
  • Economic – U.S. GDP laid another egg. Data weak in Japan & Europe.
  • Currencies – Terrible day for the USD. Lost ground vs. all of the Big 5.
  • Yen – Rallied over 3 handles and traded with 5 handles (-3.25 to 102.02).
  • Commodities – Good day for commodities with the weaker USD. Crude higher.
  • CDX IG: -1.22 to 73.08
  • CDX HY: -3.67 to 400.48
  • CDX EM: -5.95 to 259.66

*CDX levels are as of the 3PM ET UST close.

-Tony Farren

 

IG Primary Market Talking Points

 

  • For the week ended July 27th, Lipper U.S. Fund Flows reported an inflow of $1.475b into Corporate Investment Grade Funds (2016 YTD net inflow of $20.798b) and a net outflow of $175.430m into High Yield Funds – the second highest ever – (2016 YTD net inflow of $9.696b).

 

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

 

IG Corporate New Issuance This Week
7/25-7/29
vs. Current
WTD – $28.00b
July 2016 vs. Current
MTD – $96.75b
Low-End Avg. $19.39b 144.40% $90.09b 107.39%
Midpoint Avg. $20.48b 136.72% $91.17b 106.12%
High-End Avg. $21.57b 129.81% $92.26b 104.87%
The Low $10b 280.00% $60b 161.25%
The High $30b 93.33% $125b 77.40%

 

“The Best and the Brightest” –  Syndicate Forecasts and Sound Bites for Next Week 

 

I am happy to announce that, once again, the “QC” received unanimous responses from the 23 syndicate desks surveyed in today’s Best & Brightest poll.  21 of those participants are among 2016’s top 22 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  In fact, all of today’s 23 participants finished in the top 25 of last year’s final IG Corporate Bloomberg league table.  The 2016 League table can be found on your terminals at “LEAG” + [GO] after which you select #201 (US Investment Grade Corporates).  Today’s cumulative underwriting percentage of the participating desks was 80.99% which simply means they’re the ones with visibility.  But it’s not only about their volume forecasts, it’s also about their comments!  This core syndicate group does it best; they know best; so they’re the ones you WANT and NEED to hear from.  It’s a great look at the week ahead.

*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 fixed income 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 the third consecutive year! That’s 2014, 2015 and 2016 !!  More importantly, however, you’re helping the nation’s oldest Service Disabled Veteran broker-dealer grow in a more meaningful and sustainable way.  So, thank you all! -RQ

The question posed to the “Best and the Brightest” early this morning was:

“Good morning!  Question:  The BoJ eased its policy by doubling its ETF purchases amidst its negative rate environment; oil is flirting with below $40 per barrel and this morning, U.S. GDP grew……at a dismal 1.20% less than half the 2.5% expectations.  Europe continues to be in a shambles and well,  what’s it all mean?  LOWER-for-LONGER is remains the market mantra!  We’re entering August on Monday and it’s typically one of the slowest months of the year.  Let’s take a look at what we accomplished this week in our IG rated Corporate primary market:


This week we priced $33.94b of all-in IG Corporate and SSA issuance. IG Corps were $28.00b which eclipsed this week’s syndicate midpoint average forecast of $20.48b by 36.72%.

Here are this week’s IG Corporate-only key primary market driver averages:

 

  • NICS:  1.23 bps
  • Oversubscription Rates: 3.63x
  • Tenors:  13.45 years
  • Tranche Sizes: $875mm

 

Week-on-week demand for IG corporate credit primary paper was off last week but remained strong posting an average bid-to-cover rate of 3.63x vs. 3.42x. Average NICs compressed by 2.72 bps to an average 1.23 bps versus last week’s 3.95 bps.  Average tranche sizes decreased to $875mm versus $1.482b last week.  Average tenors increased to 13.95 years versus last week’s 7.95 years.  For the week ended July 27th, Lipper U.S. Fund Flows reported an inflow of $1.475b into Corporate Investment Grade Funds (2016 YTD net inflow of $20.798b) and a net outflow of $175.430m into High Yield Funds – the second highest ever – (2016 YTD net inflow of $9.696b).

Week-on-week, BAML’s IG Master Index is 2 bps wider or +149 vs. last Friday’s +147 close.  Spreads across the four IG asset classes widened 1.25 bps to 36.00 vs. 34.75. Looking at the 19 major industry sectors, spreads widened 0.47 bps to an average 45.21 bps off their post-Crisis lows versus 44.74 bps versus last Friday’s close.

               

Lastly, after all that, my two-part question is what are your thoughts and numbers for both next week’s and August’s IG Corporate issuance?  Thoughtful comments are always helpful and much appreciated especially by the issuers who YOU cover and who read this!

Many thanks in advance and best wishes for a great weekend! –Ron”

……..……and here are their formidable responses:

 

(more…)

Fixated on FOMC; Debt Markets Waiting On Latest Update-Mischler Comment
July 2016      Debt Market Commentary   

Quigley’s Corner 07.26.16: Managers Fixated on FOMC

 

Investment Grade New Issue Re-Cap

Global Market Recap

 IG Primary Market Talking Points

New Issues Priced

Lipper Report/Fund Flows

IG Credit Spreads (by Rating/Industry)

IG Secondary Market Trading Lab

New Issue Pipeline

Economic Data Releases

Rates Trading Lab

M&A Pipeline

 

We had 5 IG Corporate issuers tap the dollar DCM today pricing 6 tranches between them totaling $5.1b.  Today’s big transaction was Citigroup’s $2.5b 2-part 5-year FXD/FRN that priced with no concession.  In the SSA space, NIB added its expected $1b 5-year boosting the all-in day totals to 6 issuers, 7 tranches and $6.1b.

The IG Corporate-only WTD total is now $12.2b or 63% of this week’s syndicate midpoint average forecast calling for $20.48b.

We expect a quiet Wednesday session ahead of tomorrow’s 2:00pm FOMC Rate Decision Statement only.  As our own rates guru, Tony Farren shared with me today, “I expect the FOMC Statement to lean dovish with a message that the Fed is data dependent with an eye on international developments (Brexit, Europe, Japan, China, etc). My call for the FOMC rate hikes in 2016 is zero to one hike. I think the FOMC wants to get in a least one rate hike this year but to do it, the stars really have to align.  Tomorrow is a Statement only meeting.  We’ll have to wait until the September 20/21st meeting for the next Projections and Press Conference.  Following tomorrow’s FOMC, focus will shift to the BOJ Meeting. The BOJ Statement is released Thursday night.”

 

Global Market Recap

 

  • S. Treasuries – Weak 5yr auction. Closed mixed & little changed but had a solid afternoon rally.
  • 3mth Libor – You guessed it another high yield since May 2009 (0.74300%).
  • Stocks – U.S. stocks are mixed & little changed but staged a solid rally off the lows of the day.
  • Overseas Stocks – Europe closed mixed. China had a solid rally & the Nikkei traded poorly.
  • Economic – U.S. economic data was mixed.
  • Currencies – Strong day for the Yen. The Euro & Pound closed little changed.
  • Commodities – Crude down but closed well above the day’s low price. Bad day for wheat.
  • CDX IG: +1.11 to 74.56
  • CDX HY: +5.84 to 401.32
  • CDX EM: +4.91 to 260.97

*CDX levels are as of the 3PM ET UST close.

-Tony Farren

 

IG Primary Market Talking Points

 

  • The average spread compression from IPTs thru the launch/final pricing of today’s 5 IG Corporate new issues only was 12.2 bps.
  • The spread compression from IPTs to the launch/final pricing across today’s 6 IG new issues – including the split-rated $25 PerpNC5 for Capital One – was 14.125 bps.

 

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

 

IG Corporate New Issuance This Week
7/25-7/29
vs. Current
WTD – $12.20b
July 2016 vs. Current
MTD – $80.95b
Low-End Avg. $19.39b 62.92% $90.09b 89.85%
Midpoint Avg. $20.48b 59.57% $91.17b 88.79%
High-End Avg. $21.57b 56.56% $92.26b 87.74%
The Low $10b 122.00% $60b 134.92%
The High $30b 40.67% $125b 64.76%

 

 

Have a great evening!
Ron

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…)