Browsing articles tagged with "Lipper Report/Fund Flows Archives - Mischler Financial Group"
European Corporate Debt Issuance Mkt: Fill ‘Yer Boots Mode
January 2017      Debt Market Commentary   

Quigley’s Corner 01.24.17 Eye on European Corporate Debt Issuance: Fill Yer Boots

“..Today’s all-in US Investment Grade day total issuance makes January issuance $182.433b; the 3rd busiest month on record..”

 

Investment Grade Corporate Debt New Issue Re-Cap – January 2017 Now 3rd Highest Volume Month on Record!
Global Market Recap

IG Primary & Secondary Market Talking Points

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

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 January 18th     

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

It was perhaps a rather subdued IG primary market today in the U.S. but we did wind up featuring 3 IG Corporate issuers that priced 8 tranches between them totaling $4.65.  SSA also assisted in boosting the volume totals as 2 issuers priced 2 tranches amounting to $3.25b.  Today’s all-in IG day total is now $182.433b making it as the 3rd busiest month on record.

However, allow me to tell you about London’s European issuance where the primary market remains “hot.”  What’s that mean?  How about this – today, according to friend, former BNP Paribas colleague and Bloomberg Editorial Primary Market Strategist, Paul Cohen, “Europe remains in a “fill yer boots” mode across the pond.  Notably, of the 151 YTD syndicated transactions, 100 of them (66%) have trended tighter vs. launch/final pricing.  Despite that Europe was expecting a busy week this week they certainly did not anticipate the €32b priced in the in first two sessions.  It’s staggering! Today in particular saw 10 issuers price 11 tranches totaling €27.68b making it the third largest issuance day in Europe in 3 years according to his Bloomberg records. Today’s U.K. 40-year gilt transaction amassed a record £23b in investor order interest while total demand for 3 sovereign bond new issues eclipsed €80b equivalent.  Paul said the reason is that “the latest rise in underlying rates, fueled by improving macro sentiment, appears to be buoying risk appetite.” It sure does.

 

Global Market Recap

 

  • U.S. Treasuries – Bad day for USTs & bonds in Europe. JGB’s closed mixed. Supply a factor.
  • Stocks – Good day for U.S. stocks with record highs for the S&P and NASDAQ.
  • Overseas Stocks – Europe had a good day (not Ireland), Japan red and China mixed.
  • Economic – Markit manufacturing improved. Low inventory holding back existing home sales.
  • Overseas Economic – Solid data in Japan & Europe.
  • Currencies – USD outperformed all of the Big 5. Yesterday was the opposite.
  • Commodities – Big day for copper. Crude oil higher & gold lower.
  • CDX IG: -1.32 to 65.12
  • CDX HY: -5.52 to 346.69
  • CDX EM: -0.81 to 236.23

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

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

  • Mischler Financial served as a passive underwriter on Morgan Stanley’s $1b (40mm share) 5.85% PerpNC10 fixed-to-floating rate non-cumulative $25 par preferred Series “K” today.  Thank you to MS Preferred Syndicate’s Michael “Captain Morgan” Borut for selecting Mischler as an underwriter from among the many diversity broker-dealers to choose from. It is always appreciated Mike! The transaction rated (Ba1/BB/BB+) started with IPT’s in the 6.125% “area” before tightening 25 bps to revised 5.875% “area” guidance and 2.5 bps tighter into the 5.85% launch for an impressive <27.5> of spread compression throughout price evolution.
    The average spread compression from IPTs thru the launch/final pricing of today’s 8 IG Corporate-only new issues was 18.12 bps.
  • BAML’s IG Master Index was unchanged at +128.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +122.  The “LUACOAS” wide since 2012 is +215. The tight is +122.
  • 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 $17.1b on Monday versus $15.2b on Friday.
  • The 10-DMA stands at $18.7b.

 

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

 

IG Corporate New Issuance This Week
1/23-1/27
vs. Current
WTD – $13.70b
January 2017
Forecasts
vs. Current
MTD – $130.433b
Low-End Avg. $19.09b 71.77% $107.87b 120.92%
Midpoint Avg. $20.46b 66.96% $108.41b 120.31%
High-End Avg. $21.83b 62.76% $108.96b 119.71%
The Low $15b 91.33% $80b 163.04%
The High $26b 52.69% $145b 89.95%

 

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

 

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.
1/23
AVERAGES
WEEK 1/16
AVERAGES
WEEK 1/09
AVERAGES
WEEK 1/02
AVERAGES
WEEK 12/26
AVERAGES
WEEK 12/19
AVERAGES
WEEK 12/12
New Issue Concessions 0.94 bps 3.42 bps 0.85 bps 2.25 bps N/A N/A <0.50> bps
Oversubscription Rates 2.60x 2.40x 2.85x 2.45x N/A N/A 2.41x
Tenors 8.54 yrs 12 yrs 7.83 yrs 6.52 yrs N/A N/A 10.67 yrs
Tranche Sizes $1,006mm $1,123mm $927mm $859mm N/A N/A $708mm
Avg. Spd. Compression
IPTs to Launch
<15.61> yrs <14.69> bps <18.77> bps <15.27> bps N/A N/A <17.17> bps

 

New Issues Priced

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

For ratings I use the better two of Moody’s, S&P or Fitch.

 

IG          

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
IBM Aa3/AA- FRN 1/27/2020 500 3mL+equib 3mL+equiv 3mL+23 3mL+23 BNPP/CS/HSBC/MIZ/RBC
IBM Aa3/AA- 1.90% 1/27/2020 750 +60a +45-50 +45 +45 BNPP/CS/HSBC/MIZ/RBC
IBM Aa3/AA- 2.50% 1/27/2022 1,000 +75a +60-65 +60 +60 BNPP/CS/HSBC/MIZ/RBC
IBM Aa3/AA- 3.30% 1/27/2027 500 +100a +90-95 +90 +90 BNPP/CS/HSBC/MIZ/RBC
Jackson Nat’l. Life Glbl. Fdg. AA/AA 2.20% 1/30/2020 400 +85a +75 the # +75 +75 BARC/CS/DB/MS
Jackson Nat’l. Life Glbl. Fdg. AA/AA 3.25% 1/30/2024 500 +110a +100 the # +100 +100 BARC/CS/DB/MS
Tech Data Corporation Baa3/BBB- 3.70% 2/15/2022 500 +low 200s
+212.5a
+185a (+/-5) +180 +180 BAML/CITI/JPM
Tech Data Corporation Baa3/BBB- 4.95% 2/15/2027 500 +high 200s +287.5a +255a (+/-5) +250 +250 BAML/CITI/JPM

 

SSA

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Nordic Investment Bank Aaa/AAA 2.125% 2/01/2022 1,250 MS +19a MS +18a MS +17 +23.5 CITI/JPM/RBC/TD
Province of Quebec Aa2/AA- 2.375% 1/31/2022 2,000 MS +46a MS +44a MS +43 +49.15 BAML/BMO/DB/SCOT

 

Indexes and New Issue Volume

Please note that below levels are as of 3:45pm ET.

 

Index Open Current Change  
IG27 66.447 65.188 <1.259>
HV27 140.44 138.89 <1.55>
VIX 11.77 11.28 <0.49>  
S&P 2,265 2,282 17
DOW 19,800 19,919 119  
 

USD

 

IG Corporates

 

USD

 

Total (IG + SSA)

DAY: $4.65 bn DAY: $7.90 bn
WTD: $13.70 bn WTD: $16.95 bn
MTD: $130.433 bn MTD: $182.433 bn
YTD: $130.433 bn YTD: $182.433 bn

 

Lipper Report/Fund Flows – Week ending January 18th     

     

  • For the week ended January 18th, Lipper U.S. Fund Flows reported an inflow of $1.893b into Corporate Investment Grade Funds (2016 YTD net inflow of $8.108b) and a net outflow of $887.116m from High Yield Funds (2016 YTD net inflow of $410.884m).
  • Over the same period, Lipper reported a net inflow of $548.36m into Loan Participation Funds (2016 YTD net inflow of $2.745b).
  • Emerging Market debt funds reported a net inflow of $77.439m (2016 YTD inflow of $314.867m).

 

IG Credit Spreads by Rating (more…)

Pre-Presidential Inauguration: Big Banks Float Boatload of Debt Deals
January 2017      Debt Market Commentary   

Quigley’s Corner 01.17.17 – Big Banks Issue Boatloads of Debt; Investor Appetite for IG Debt is Resilient 

 

Investment Grade New Issue Re-Cap – “Banking” on Change – 3 Big FIGs Unleash 3 Deals, 9 Tranches and $18.75b on Heels of Strong Q4 ’16 Earnings.

Global Market Recap

IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates for January 

Morgan Stanley Inc. $3b 10 year Deal Dashboard

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 January 11th     

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

 

As Bloomberg Gladfy columnist Lisa Abramowicz pointed out in her Jan 6 story “The Credit Boom Just Won’t Die”, –which included your’s truly cited for providing the most accurate forecast re debt issuance, three more banks joined the pre-Presidential Inauguration day fray to satisfy investors’ insatiable appetite for Investment Grade debt and floated $20.75bil in fresh paper, breaking the weekly fixed income syndicate forecast in a single day.. 

6 IG Corporate issuers announced a total of 13 tranches between them totaling $20.75b.  But, make no mistake about it, the day belonged to the Big FIGs Bank of America, Morgan Stanley and Wells Fargo who between them accounted for  9 of the tranches and just over 90% of the day’s volume.  We are now one day into the holiday-shortened week, yet we’ve already priced 90% of this week’s syndicate midpoint average estimate calling for $23.07b.  Tomorrow looks to be loaded with SSA issuers who were absent today yet who began taken IOIs on tomorrow’s deals.  Slated for Tuesday are IBRD, OKB, KBN, FMS and CPPIB Capital.  So, heavy IG all-in volume is expected therein.

Mischler Financial served as a “passive” Co-Manager on today’s 10-year fixed rate tranche of Morgan Stanley’s three-part 5NC4, 10s and 30s making it today’s Deal-of-the-Day for the nation’s oldest Service Disabled Veteran broker-dealer.  Let’s run down Global, Primary and Secondary Market Recaps and then I’ll get to the MS 3-part drill-down.

 

Global Market Recap

 

  • U.S. Treasuries – Strong session for USTs after Trump said the USD is too strong.
  • Overseas Bonds – JGB’s closed with gains. Europe had more green than red.
  • 3mth Libor – Set at its highest yield since May 2009 (1.02483%).
  • Stocks – The NASDAQ was leading stocks south at 3:30pm.
  • Overseas Stocks – Europe more red than green. Nikkei red. China/HS closed higher.
  • Economic – Light calendar in the U.S. Japan & Europe were better. U.K. CPI higher.
  • Currencies – Trump said the USD was too strong & now it is not as strong.
  • Commodities – Crude oil small gain. Gold & silver were strong. Copper hit hard.
  • CDX IG: +0.97 to 66.79
  • CDX HY: +3.11 to 354.22
  • CDX EM: -1.15 to 233.23

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

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

  • Regency Centers LP upsized today’s two-part 10s/30s Senior Notes new issue to $650mm from $600mm at the launch and at the tightest side of guidance.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 13 IG Corporate-only new issues was <14.04> bps.
  • BAML’s IG Master Index tightened 1 bp to +128 vs. +129.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +122.  The “LUACOAS” wide since 2012 is +215. The tight is +122.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +166.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $13.7b on Friday versus $19.4b on Thursday and $18.1b the previous Friday.

 

Syndicate IG Corporate-only Volume Estimates for January 

 

IG Corporate New Issuance This Week
1/16-1/20
vs. Current
WTD – $20.75b
January 2017
Forecasts
vs. Current
MTD – $108.283b
Low-End Avg. $22.20b 93.47% $107.87b 100.38%
Midpoint Avg. $23.07b 89.94% $108.41b 99.88%
High-End Avg. $23.93b 86.71% $108.96b 99.38%
The Low $15b 138.33% $80b 135.35%
The High $36b 57.64 $145b 74.68%

 

Morgan Stanley Inc. $3b 10 year Deal Dashboard

 

This morning prior to the market open, Morgan Stanley posted its strongest quarterly earnings since the Financial Crisis and outperformed Q4 2015 by $950 million thanks to a bond trading revival that boosted MS’s bottom line.  Q4 ’16 Bond trading revenues surged $1.47b or 167% beating analyst’s estimates by $500mm.  That is the single largest amount among six-pack banks that have reported with Citigroup and Goldman Sachs posting tomorrow. Much the recent quarter activity is attributable to market expectations that Donald Trump and his cabinet will boost economic growth, revamp more favorable corporate tax policies and create more of a rising rate environment than the snail’s pace we’ve gotten used to.  Morgan Stanley’s Q4 net income rose 83% to $1.67b or $0.81 EPS vs. $908mm and $0.39 in Q4 2015.

Mischler served as a “passive” 1.00% Co-Manager on Morgan Stanley’s $3b 10-year tranche of their $7b three-part 5NC4, 10s and 30s.

For 10yr fair value I looked at the outstanding MS 2.625% due 11/17/2021 that was T+134 (G+136) pre-announcement landing NIC as 7 bps against today’s final +143 new 10yr pricing.

The new 5yr that priced at 3mL +118 looked to the outstanding MS 2.625 due 11/17/2021 that was seen T+107 bid pre-announcement or G+109.5 pegging NIC on today’s new 5yr as 8.5 bps to the 5yr bullet.

The 30yr comped best to the MS 4.30% due 1/27/2045 T+133 nailing today’s new 30 yr NIC as 15 bps versus today’s final T+148 pricing.

 

As for Morgan’s inclusive focus on veterans and veteran initiatives and Mischler’s designation to play a role in this transaction, Morgan Stanley Chairman and Chief Executive Officer James Gorman says, “Morgan Stanley thanks you for your service.  The military’s emphasis on the mission and the team, leadership accountability and continuous improvement aligns well with the culture of our Firm.”

To Mr. Gorman: It’s an honor to serve on your transaction. We always stand at the ready for you and Team Morgan Stanley.

 

 

MS Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
5yr 3mL+125a 3mL+120
(+/-2)
3mL+118 3mL+118 <7> bps 8.5 117/116 <1>
10yr FXD +155a +145a (+/-2) +143 +143 <12> bps 7 bps 143/141 0/flat
30yr +160a +150a (+/-2) +148 +148 <12> bps 15 bps 141/139 <7>

 

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

 

MS  Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
5yr $1.75b $2.75b 1.57x
10yr FXD $3b $5.5b 1.83x
30yr $2.25b $5.1b 2.27x

 

Final Pricing – Morgan Stanley (NYSE:MS)
MS $1.75b 3mL+118 due 1/20/2022 5NC4 FRN at $100.00

MS $3b 3.625% 10yr FXD due 1/20/2027 @ $98.999 to yield 3.746% or T+143  MW+25

MS $2.25b 4.375% 30yr FXD due 1/20/2047 @ $99.322 to yield 4.416% or T+148  MW+25

 

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

 

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

 

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
1/09
TUES.
1/10
WED.
1/11
TH.
1/12
FRI.
1/13
AVERAGES
WEEK 1/09
AVERAGES
WEEK 1/02
AVERAGES
WEEK 12/26
AVERAGES
WEEK 12/19
AVERAGES
WEEK 12/12
AVERAGES
WEEK 12/05
New Issue Concessions 0.57 bps 0.83 bps 0.67 bps 6.50 bps N/A 0.85 bps 2.25 bps N/A N/A <0.50> bps 4.26 bps
Oversubscription Rates 3.02x 2.85x 2.70x 2.70x N/A 2.85x 2.45x N/A N/A 2.41x 3.68x
Tenors 9.09 years 5.40 yrs 8 yrs 5.67 yrs N/A 7.83 yrs 6.52 yrs N/A N/A 10.67 yrs 9.21 yrs
Tranche Sizes $613mm $433mm $1,577mm $667mm N/A $927mm $859mm N/A N/A $708mm $760mm
Avg. Spd. Compression
IPTs to Launch
<15.32> bps <19.83> bps <21.46> bps <23.75> bps N/A <18.77> bps <15.27> bps N/A N/A <17.17> bps <22.24> bps

…..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:

 

New Issues Priced

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

For ratings I use the better two of Moody’s, S&P or Fitch.

 *Please note that Baptist Health South Florida Obligated Group priced on Monday, January 9th but was posted today.  It is italicized in the below table for informational purposes only but is not included in today’s IG Corporate day total.  The New Issue Volume tables below have been updated to reflect its inclusion.  Thanks! -RQ

IG          

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Bank of America Baa1/A FRN 1/20/2023
6NC5
750 3mL+equiv 3mL+116 the # 3mL+116 3mL+116 BAC-sole
Bank of America Baa1/A 3.124% 1/20/2023
6NC5
1,500 +140 +130 the # +130 +130 BAC-sole
Bank of America Baa1/A 3.824% 1/20/2028
11NC10
2,500 +165a +150a (+/-2) +150 +150 BAC-sole
Bank of America Baa1/A 4.443% 1/20/2048
31NC30
2,000 +165a +150a (+/-2) +150 +150 BAC-sole
Guardian Life Ins. Co. of America AA-/AA- 4.85% 1/24/2077 350 +low 200s
+200-225/+212.5a
+200a (+/-5) +195 +195 CS/DB/JPM/MS
Kroger Co. Baa1/BBB 4.45% 2/01/2047 1,000 +160a +150 the # +150 +150 BAML/RBC/USB(a) + 3 (p)
Morgan Stanley A3/A FRN 1/20/2022
5NC4
1,750 3mL+125a 3mL+120 (+/-2) 3mL+118 3mL+118 MS-sole
Morgan Stanley A3/A 3.625% 1/20/2027 3,000 +155a +145a (+/-2) +143 +143 MS-sole
Morgan Stanley A3/A 4.375% 1/20/2047 2,250 +160a +150a (+/-2) +148 +148 MS-sole
Regency Centers LP Baa1/BBB+ 3.60% 2/01/2027 350 +150a +135a (+/-5) +130 +130 BAML/JPM/USB/WFS
Regency Centers LP Baa1/BBB+ 4.40% 2/01/2047 300 +175a +155a (+/-5) +150 +150 BAML/JPM/USB/WFS
Wells Fargo & Co. A2/AA- FRN 1/24/2023
6NC5
1,250 3mL+equiv (+125a) 3mL+111 the # 3mL+111 3mL+111 WFS-sole
Wells Fargo & Co. A2/AA- 3.069% 1/24/2023
6NC5
3,750 +140a +125 the # +125 +125 WFS-sole

 

 Indexes and New Issue Volume

*Denotes 52-week low.

Index Open Current Change
IG27 65.82 66.428 0.608
HV27 140.34 139.90 <0.44>
VIX *11.23 11.86 0.63
S&P 2,274 2,267 <7>
DOW 19,885 19,826 <59>
 

USD

 

IG Corporates

 

USD

 

Total IG (+SSA)

DAY: $20.75 bn DAY: 20.75 bn
WTD: $20.75 bn WTD: 20.75 bn
MTD: $108.283 bn MTD: $137.033 bn
YTD: $108.283 bn YTD: $137.033 bn

 

Lipper Report/Fund Flows – Week ending January 11th     

     

  • For the week ended January 11th, Lipper U.S. Fund Flows reported an inflow of $4.029b into Corporate Investment Grade Funds (2016 YTD net inflow of $6.215b) and a net inflow of $563.51m into High Yield Funds (2016 YTD net inflow of $1.298b).
  • Over the same period, Lipper reported a net inflow of $1.332b into Loan Participation Funds (2016 YTD net inflow of $2.197b).
  • Emerging Market debt funds reported a net inflow of $172.277m (2016 YTD inflow of $237.428m).

 

Economic Data Releases

 

TODAY’S ECONOMIC DATA PERIOD SURVEYED ESTIMATES ACTUAL NUMBER PRIOR NUMBER PRIOR REVISED
Empire Manufacturing January 8.5 6.5 9.0 7.6

 

Rates Trading Lab

 

The week is off to an interesting start. Today we had some unwinding of the Trump trade with Treasuries rallying, stocks selling off and the USD getting whacked. The market is starting to realize Trump plans will have many hurdles to get over before they become a reality. At the 3pm close, benchmark Treasuries were better bid by 3.7 bps (2yr: 1.156%) to 5.8 bps (5yr: 1.826%).

 

Today’s highlights were:

 

  • President-Elect Trump told the WSJ the USD was already too strong and the USD paid a severe price for the comment. The USD was hit hard by all of the Big 5.
  • This morning, U.K. PM Theresa May said she will not pursue membership in the EU single market system. The Pound which had been under heavy pressure last week rallied on the May & Trump comments. It was the best day the Pound has had vs. the USD since 2008.
  • NY Fed President Dudley (voter/very dovish) was very dovish this morning. Dudley said the Fed is unlikely to snuff out the U.S. economic expansion and inflation is not a problem.
  • Conversely, Fed Gov. Brainard (dove) was hawkish in her comments today. Brainard was the 3rd Fed member in the New Year (2017) to mention the Fed balance sheet. Last Thursday St. Louis Fed Pres. Bullard (non-voter) and Dallas Fed Pres. Kaplan (voter) also mentioned the balance sheet. Something to keep your eye on.

 

UST Resistance/Support Table

 

CT3 CT5 CT7 CT10 CT30
RESISTANCE LEVEL 100-272 101-106 101-16 98-04+ 100-16
RESISTANCE LEVEL 99-31+ 101-046 101-07 97-24+ 99-25
RESISTANCE LEVEL 99-30 100-30 100-31 97-13+ 99-16
         
SUPPORT LEVEL 99-27 100-226 100-20 96-30 98-13
SUPPORT LEVEL 99-252 100-196 100-10 96-17 97-26
SUPPORT LEVEL 99-24 100-142 100-03 96-09 97-06

 

Tomorrow’s Calendar

 

  • China Data: Nothing Scheduled
  • Japan Data: Nothing Scheduled
  • Australia: Westpac Consumer Confidence
  • EU Data: German Dec CPI, EU Dec CPI, U.K. Dec Unem/Nov Earns
  • U.S. Data: MBA, Dec CPI, Dec IP/CapU, Jan NAHB, Nov TIC
  • Supply: ECB 7d$, BoC
  • Events: Nouy, Yellen, Kashkari, Kaplan, Olsen

(more…)

The Day’s New Debt Issuance: USD 22.5bil Floated Across 15 Deals
January 2017      Debt Market Commentary   

Quigley’s Corner 01.11.17-$22.5bil in New Debt Issuance Floated / 15 Deals; Led by Broadcom and GM Financial

 

Investment Grade Corporate Bond New Issue Re-Cap 

Global Market Recap

IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates for January 

Rates Trading Lab

General Motors Financial Co. Inc. $2.5b 3-part 5yr FXD/FRN and 10yr Senior Unsecured Notes Deal Dashboard

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 January 4th     

IG Credit Spreads by Rating / Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Tomorrow’s Calendar

It was yet another very busy and high volume day today in our IG dollar DCM that featured 6 IG Corporate issuers across 13 tranches totaling $20.50b led by a $13.55b 4-part from Broadcom and a $2.5b 3-part deal from General Motors Financial Co. Inc.  Additionally, 2 SSA issuers brought 2 tranches adding another $1.75b thereby bringing the all-in IG day totals to 8 issuers, 15 tranches and $22.25b.

The WTD IG Corporate-only total is now $32.05b or 10% more than this week’s $30.13b syndicate midpoint average estimate.
MTD we have now realized $85.283b or 79% of the syndicate forecast for all of January which is $108.41b.
All-in IG Corporate plus SSA MTD issuance currently stands at: $111.533b.

Mischler Financial served as an active Co-Manager on today’s $2.5b 3-part Senior Unsecured Notes new issue for General Motors Financial Co. Inc. and so it is today’s Deal-of-the-Day.  You know the routine, let’s re-cap the day first and then it’s on to the GM Deal Dashboard and drill-down.

 

Global Market Recap

 

  • U.S. Treasuries –  USTs had small gains. Strong 10yr auction. Afternoon selling hit market.
  • Overseas Bonds – Europe traded with a bid. JGB’s mixed. Supply was a factor.
  • 3mth Libor – Set at the highest yield since April 2009 (1.02178%).
  • Stocks – U.S. stocks higher heading into close. Today was a roller coaster ride.
  • Overseas Stocks – FTSE (12) & HS (10) with double digit session winning streaks.
  • Economic – IBD/TIPP economic optimism at a 10-year high.
  • Currencies – USD had a bid until the Trump press conference & then rolled over.
  • Commodities – Crude oil with a strong rally despite bearish inventory data.
  • CDX IG: +0.16 to 66.24
  • CDX HY: +1.40 to 352.25
  • CDX EM: +0.68 to 241.96

*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 13 IG Corporate-only new issues was <21.46> bps.
  • BAML’s IG Master Index was unchanged at +129.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +122.  The “LUACOAS” wide since 2012 is +215. The tight is +122.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +166.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $20.3b on Tuesday versus $16.7b on Monday (the 7th highest day since 2006) and $22.4b the previous Tuesday.

 

Syndicate IG Corporate-only Volume Estimates for January 

 

IG Corporate New Issuance This Week
1/09-1/13
vs. Current
WTD – $32.05b
January 2017
Forecasts
vs. Current
MTD – $85.283b
Low-End Avg. $29.04b 110.37% $107.87b 79.06%
Midpoint Avg. $30.13b 106.37% $108.41b 78.67%
High-End Avg. $31.22b 102.66% $108.96b 78.27%
The Low $20b 160.25% $80b 106.60%
The High $40b 80.13% $145b 58.82%

 

Rates Trading Lab

If you were hoping to hear news on the Trump Administration’s plans for the economy (fiscal policy) in today’s press conference you were sorely disappointed. The mass media proved once again they are pretty close to being worthless. The majority of the questions directed to President-Elect Trump concerned Russia and Putin. Some of the things we did learn from Trump today were his plans to step away from the Trump Organization, he will pick a Supreme Court nominee within 2 weeks of his inauguration, he thinks leaks are coming from the intelligence community and CNN is not high on his list.

UST’s dealt with conflicting items today. The 10yr had a bid heading into the $20b 10yr auction and rallied after the auction results were very strong (details below). It was the 4th very strong Treasury auction in a row. Treasuries came under pressure after the auction bounce and the most likely reason for the selling was the 4-part $13.55b Broadcom deal. The deal was much bigger than expected ($6b). Broadcom was the highlight deal but not the only one today. The new issue markets in the U.S. and Europe remained very active. At the 3pm close  benchmark UST’s were better bid by 0.3 bps (5yr: 1.876%) to 1.4 bps (30yr: 2.957%).
-Tony Farren

 

UST Resistance/Support Table

 

CT3 CT5 CT7 CT10 CT30
RESISTANCE LEVEL 99-29 100-29+ 100-28+ 97-09+ 99-27+
RESISTANCE LEVEL 99-272 100-262 100-25+ 97-04 99-11
RESISTANCE LEVEL 99-26 100-222 100-18+ 96-29 98-26
           
SUPPORT LEVEL 99-22+ 100-156 100-10+ 96-18 97-27
SUPPORT LEVEL 99-20+ 100-12+ 100-05+ 96-11 97-08
SUPPORT LEVEL 99-18+ 100-09 100-00+ 96-04+ 96-17

 

General Motors Financial Co. Inc. $2.5b 3-part 5yr FXD/FRN and 10yr Senior Unsecured Notes Deal Dashboard (more…)

2017 Investment Grade Debt Issuance Outlook: HUGE Start to New Year
January 2017      Debt Market Commentary   

Quigley’s Corner 01.03.17- 2017 Investment Grade Corporate Bond Issuance Off to HUGE Start

11 IG Corporate Issuers priced 25 tranches between them, totaling $19.90 billion; Fortune Co’s Duke Energy, FedEx & John Deere;  Barclays Leads Bank Issuers

 

Investment Grade New Issue Re-Cap – Monumental Day; If Not Quite As Big as The Trojans’ Rose Bowl Win!!

Global Market Recap

IG Primary & Secondary Market Talking Points

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

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

Barclays PLC $1.5b 30yr Senior Unsecured Notes Deal Dashboard

Duke Energy Florida LLC 2-part 3s/10s FMBs Deal Dashboard

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

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending December 28th     

Investment Grade Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

Here’s what I last wrote in my pre-holiday “QC” dated Thursday, December 15th: “Rest up. Spend time with your families.  Enjoy the holidays, however you celebrate them.  Live, love and laugh because it starts all over again in 19 days on Tuesday, January 3rd.  In between that time fall 3 weekends (6 days), as well as Christmas and New Year’s Day.  My wish is that USC topples PSU in the Granddaddy of them all on Monday, January 2 at 5pm ET on ESPN.  That right there will be the most entertaining of all the Bowl games.  Fight On Trojans!”

So, the question is, “how happy is the guy-in-the-corner? USC’s wins 52-49 in what is perhaps the greatest Rose Bowl ever played.  How ‘bout them Trojans?  Chad Helton……Sam Darnold…….the entire Trojan team.  You gotta be kidding me.  Fight On!  They’re back and so am I from my winter hiatus.  So, let’s get to it!

The IG dollar DCM waited for no one.  I woke up at 4:45am this morning to the sounds of the bankers driving down Weaver Street to either ride in early or to catch the Metro North 4:52 a.m. milk train to Manhattan.  It usually always confirms a busy day on the Street.   Sure enough, it was once again very reliable.  I figured, “what the heck,  I have plenty to catch up on at work,” so I got in early and am glad that I did.  11 IG Corporate issuers priced 25 tranches between them totaling $19.90 billion or 18.50% of the syndicate midpoint average estimate for all of January ($108.41b) – which is historically a busy month. Mischler was very proud to have been actively involved in two deals across three tranches – first serving on Barclays PLC’s 30-year Senior Unsecured Notes new issue and then getting an equally great call from the good folks at Duke Energy Florida LLC to serve on its 3- and 10-year FMBs.  In all, it was a very busy day.  But before we get into those deal drill downs let’s first check out Tony Farren’s Global market re-cap, followed by today’s talking points and  then it’s onto the BACR and DUK new issues.

Welcome back everyone and I hope you all enjoyed the break.  Happy New Year!

 

Global Market Recap

 

  • U.S. Treasuries – USTs were red except the 30yr but had an impressive rally during NY hours.
  • Overseas Bonds – Higher inflation & U.K. PMI and supply concerns hammered bonds in the EU.
  • 3mth Libor – Set at its highest yield since May 2009 (0.99872%).
  • Stocks – U.S. stocks higher at 3:30pm but well off the session high levels.
  • Overseas Stocks – Asia higher, EU entered bull market & FTSE record high close.
  • Economic – ISM manufacturing the best in 2 years with prices paid at the highest level since 2011.
  • Overseas Economic – Manufacturing PMI in China & U.K. improved. Higher CPI in Germany, France & Spain.
  • Currencies – DXY Index traded at strongest level since 2002.
  • Commodities – CRB closed down with energy trading poorly but gold & silver rallied.
  • CDX IG: -1.40 to 66.18
  • CDX HY: -6.62 to 348.00
  • CDX EM: -2.17 to 239.91

*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 25 IG Corporate-only new issues was 16.96 bps.
  • BAML’s IG Master Index widened 1 bp to +130 vs. +129.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to +123 vs. 1.22.  The “LUACOAS” wide since 2012 is +215. The tight is +122.
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +169 vs. +168.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $2.5b on Friday versus $4.1b on Thursday and $2.2b the previous Friday.

 

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

 

IG Corporate New Issuance This Week
1/02-1/06
vs. Current
WTD – $19.90b
January 2017
Forecasts
vs. Current
MTD – $19.90b
Low-End Avg. no poll taken N/A $107.87b 18.45%
Midpoint Avg. no poll taken N/A $108.41b 18.36%
High-End Avg. no poll taken N/A $108.96b 18.26%
The Low no poll taken N/A $80b 24.87%
The High no poll taken N/A $145b 13.72%

 

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

 

  • Across the past ten years, all-in dollar-denominated IG Corporate plus SSA January new issuance averaged $135.00b.
  • Over the past five years, all-in IG January new issuance averaged $143.38b.
  • Over the past three years, all-in IG January issuance has averaged $145.46b.
  • The past three January’s saw IG Corporate only issuance average $108.90b.
  • January SSA issuance has averaged $36.56b across the last three years.

 

January
(Year)
All-in IG Issuance (bn) IG Corps
only (bn)
SSA
only (bn)
2016 169.124 126.984 42.14
2015 115.12 96.35 18.77
2014 152.14 103.36 48.78
2013 153.06 119.06 34.00
2012 127.48 81.14 46.34
2011 149.12 111.89 37.23
2010 110.69 74.80 35.89
2009 155.45 69.23 86.22
2008 144.35 75.74 68.61
2007 73.44 51.14 22.30

*Note: includes TARP/TALF & FDIC insured issuance

 

 

Barclays PLC $1.5b 30yr Senior Unsecured Notes Deal Dashboard

 

Mischler served as an active 1.00% Co-Manager on today’s 30-year tranche of Barclays PLC’s goliath $5 billion 4-part, so this serves as the deal dashboard for the 30-year piece. For my relative value study I looked at the outstanding BACR Senior Unsecured Notes due 8/17/2045 that were T+170 pre-announcement pegging NIC on today’s new 30-year as 20 bps.

 

Investor appetite for the 4-part was simply voracious.  The FRN garnered a $1b book while the 6NC5 And 11NC10 books each hovered at around $4bn.  The 30-year was tops at $4.8b. So a great start of the year for BACR and our IG DCM.

Proceeds from today’s 4-part will be used for general corporate purposes.

 

BACR Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
BACR +210a +195a (+/-5) +190 +190 <20> bps 20 bps 180/178 <10>

 

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

 

BACR  Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
BACR $1.5b $4.8b 3.20x

 

Final Pricing – Barclays PLC
BACR $1.5b 4.95% 30yr due 1/20/2047 @ $99.907 to yield 4.956% or T+190

 

Duke Energy Florida LLC 2-part 3s/10s FMBs Deal Dashboard

 

For relative value, Duke Energy Carolinas (Aa2/A) recently brought a 10-year, the DUK 2.95% due 12/01/2026, this past November 14th.  This higher-rated DUK was quoted T+71bp (G+71), versus its T+75 new issue pricing.  Today’s A1/A rated Duke Energy Florida LLC 10-year new issue landed 4 bps back of that, however, it did correspond with the November Carolinas final pricing level. So, looking at it from that angle, concession was flat.  Accounting for a 20 bps 5s/10s curve gets you to +55. Next, factoring in a 10 bps 3s/5s curve lands us at +45 for 3-year fair value inferring a negative 5 bp concession on today’s Duke Florida 3-year.

 

Proceeds will be used to fund capital expenditures for ongoing construction, capital maintenance, to repay $250mm principal of the 5.80% FMBs due 2017 and for general corporate purposes.

 

DUK Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
DUK +55a +45a (+/-5) +40 +40 <15> bps <5> 39/38 <1>
DUK +90a +80a (+/-5) +75 +75 <15> bps 0 73/71 <2>

 

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

 

DUK  Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
DUK $250mm $750mm 3x
DUK $650mm $1.5b 2.31x

 

Final Pricing – Duke Energy Florida LLC
DUK $250mm 1.85% 3yr FMBs due 1/15/2020 @ $99.886 to yield 1.889% or T+40  MWC +7.5

DUK $650mm 3.20% 10yr FMBs due 1/15/2027 @ $99.940 to yield 3.207% or T+75  MWC +15

 

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

 

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

 

Here’s a day-by-day recap of the five key primary market driver averages for IG Corporates reflecting the last active week of 2016 issuance and the prior six week’s averages:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
12/12
TUES.
12/13
WED.
12/14
TH.
12/15
FR
12/16
AVERAGES
WEEK 12/26
AVERAGES
WEEK 12/19
AVERAGES
WEEK 12/12
AVERAGES
WEEK 12/05
AVERAGES
WEEK 11/28
AVERAGES
WEEK 11/21
New Issue Concessions <1.83> bps N/A N/A 1.50 bps N/A N/A N/A <0.50> bps 4.26 bps 3.53 bps 4.5 bps
Oversubscription Rates 2.15x N/A N/A 2.94x N/A N/A N/A 2.41x 3.68x 3.38x 2.99x
Tenors 6 yrs N/A N/A 20 yrs N/A N/A N/A 10.67 yrs 9.21 yrs 10.84 yrs 12.14 yrs
Tranche Sizes $688mm N/A N/A $750mm N/A N/A N/A $708mm $760mm $711mm $929mm
Avg. Spd. Compression
IPTs to Launch
<15.75> bps N/A N/A <20.00> bps N/A N/A N/A <17.17> bps <22.24> bps <17.60> bps <16.07> bps

 

New Issues Priced

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

For ratings I use the better two of Moody’s, S&P or Fitch.

 

IG

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Barclays PLC Baa2/BBB FRN 6NC5 750 3mL+equiv 3mL+166a (+/-5) 3mL+162.5 3mL+162.5 BARC-sole
Barclays PLC Baa2/BBB 3.684% 6NC5 1,500 +195a +180a (+/-5) +175 +175 BARC-sole
Barclays PLC Baa2/BBB 4.337% 11NC10 1,250 +210a +195a (+/-5) +190 +190 BARC-sole
Barclays PLC Baa2/BBB 4.95% 1/20/2048 1,500 +210a +195a (+/-5) +190 +190 BARC-sole
BNP Paribas A1/A+ 3.80% 1/10/2024 1,750 +170-175 +160 the # +160 +160 BNP-sole
Credit Agricole SA Baa2/A FRN 1/10/2022 300 3mL+equiv 3mL+equiv 3mL+143 3mL+143 CACIB-sole books
JLMs: CITI/DB/SG/TD/UNI
Credit Agricole SA Baa2/A 3.375% 1/10/2022 1,000 +165a +145-150 +145 +145 CACIB-sole books
JLMs: CITI/DB/SG/TD/UNI
Credit Agricole SA Baa2/A 4.125% 1/10/2027 1,000 +195a +175-180 +175 +175 CACIB-sole
JLMs: CITI/DB/SG/TD/UNI
Daimler Finance N.A. LLC A3/A FRN 1/06/2020 400 3mL+requiv 3mL+equiv 3mL+63 3mL+63 BAML/COBA/JPM/MIZ
Daimler Finance N.A. LLC A3/A 2.30% 1/06/2020 1,000 +95a +85a (+/-2) +83 +83 BAML/COBA/JPM/MIZ
Daimler Finance N.A. LLC A3/A 2.85% 1/06/2022 850 +105a +95a (+/-2) +93 +93 BAML/COBA/JPM/MIZ
Daimler Finance N.A. LLC A3/A 3.45% 1/06/2027 750 +120a +105 the # +105 +105 BAML/COBA/JPM/MIZ
Duke Energy Florida LLC A1/A 1.85% 1/15/2020 250 +55a +45a (+/-5) +40 +40 BAML/SCOT/TD/UBS/WFS
Duke Energy Florida LLC A1/A 3.20% 1/15/2027 650 +90a +80a (+/-5) +75 +75 BAML/SCOT/TD/UBS/WFS
FedEx Corporation Baa2/BBB 3.30% 3/15/2027 450 +110-115 +95a (+/-5) +90a +90 RF/SCOT/STRH/WFS
FedEx Corporation Baa2/BBB 4.40% 1/15/2047 750 +160-165 +145a (+/-5) +140a +140 RF/SCOT/STRH/WFS
John Deere Capital Corp. A2/A FRN 10/15/2018 250 3mL+equiv 3mL+equiv 3mL+27 3mL+27 BAML/CITI/GS
John Deere Capital Corp. A2/A 1.65% 10/15/2018 350 +65a +50a +47 +47 BAML/CITI/GS
John Deere Capital Corp. A2/A 2.65% 1/06/2022 400 +85a +75a (+/-3) +72 +72 BAML/CITI/GS
Principal Life Glbl. Fdg. II A1/A+ 2.15% 1/10/2020 500 +low 80s/+82.5 +75a (+/-3) +72 +72 BARC/CS/DB
Rabobank Nederland NY Aa2/A+ FRN 1/10/2022 500 3mL+equiv 3mL+equiv 3mL+83 3mL+83 CS/GS/JPM/RBC
Rabobank Nederland NY Aa2/A+ 2.75% 1/10/2022 1,000 +100a +87.5a (+/-2.5) +85 +85 CS/GS/JPM/RBC
Santander UK Grp. Hldgs. Baa1/A 3.571% 1/10/2023 1,000 +185a +165a (+/-2) +163 +163 BAML/DB/GS/SANT/WFS
Westpac Banking Corp. Aa2/AA- FRN 1/11/2017 500 3mL+equiv 3mL+equiv 3mL+85 3mL+85 BAML/HSBC
Westpac Banking Corp. Aa2/AA- 2.80% 1/11/2017 1,250 +105a +90a (+/-2) +88 +88 BAML/HSBC

           

Indexes and New Issue Volume

 

Index Open Current Change
IG27 67.585 65.669 <1.916>
HV27 144.05 141.03 <3.02>
VIX 14.04 12.85 <1.19>
S&P 2,239 2.258 19
DOW 19,763 19,882 119
 

USD

 

IG Corporates

 

USD

 

Total IG (+SSA)

DAY: $19.90 bn DAY: $19.90 bn
WTD: $19.90 bn WTD: $19.90 bn
MTD: $19.90 bn MTD: $19.90 bn
YTD: $19.90 bn YTD: $19.90 bn

 

Lipper Report/Fund Flows – Week ending December 28th     

     

  • For the week ended December 29th, Lipper U.S. Fund Flows reported an inflow of $80.9m from Corporate Investment Grade Funds (2016 YTD net inflow of $43.710b) and a net inflow of $3.75b into High Yield Funds (2016 YTD net inflow of $10.723b).
  • Over the same period, Lipper reported a net inflow of $1.504b into Loan Participation Funds (2016 YTD net inflow of $3.826b).
  • Emerging Market debt funds reported a net outflow of $776.74m (2016 YTD inflow of $3.961b).

 

IG Credit Spreads by Rating

The 10-day IG spread performance vs. the T10 across the ratings spectrum and how IG compared versus high yield:

Spreads across the four IG asset classes are an average 20.00 bps wider versus their post-Crisis lows!

 

ASSET CLASS 1/03 1/02 12/30 12/29 12/28 12/27 12/23 12/22 12/21 12/20 1-Day Change 10-Day Trend PC
low
IG Avg. 128 130 129 128 128 128 129 129 129 129 <2> <1> 106
“AAA” 70 71 71 70 70 71 71 72 72 72 <1> <2> 50
“AA” 79 80 80 79 79 80 80 80 80 80 <1> <1> 63
“A” 103 104 103 103 103 103 103 103 104 104 <1> <1> 81
“BBB” 164 166 164 163 164 164 164 164 165 165 <2> <1> 142
IG vs. HY 285 292 292 290 287 282 287 288 290 290 <7> <5> 228

IG Credit Spreads by Industry

…….and a snapshot of the major investment grade sector credit spreads for the past ten sessions:

Spreads across the major industry sectors are an average 26.21 bps wider versus their post-Crisis lows!

 

INDUSTRY 1/03 1/02 12/30 12/29 12/28 12/27 12/23 12/22 12/21 12/20 1-Day Change 10-Day Trend PC
low
Automotive 119 121 118 118 118 119 119 119 119 119 <2> 0 67
Banking 120 120 120 120 120 120 120 121 121 121 0 <1> 98
Basic Industry 168 170 167 166 166 165 166 166 166 166 <2> +2 143
Cap Goods 97 98 97 96 96 96 96 96 97 97 <1> 0 84
Cons. Prod. 105 106 106 105 105 106 106 106 106 106 <1> <1> 85
Energy 161 163 160 160 160 160 161 160 161 161 <2> 0 133
Financials 151 152 151 151 150 149 150 150 151 150 <1> +1 97
Healthcare 113 114 114 113 114 114 114 114 115 115 <1> <2> 83
Industrials 130 130 130 129 130 130 130 130 131 131 0 <1> 109
Insurance 141 143 142 141 141 141 141 141 142 141 <2> 0 120
Leisure 134 132 130 129 129 131 132 132 132 134 +2 0 115
Media 153 155 154 154 154 154 155 155 155 156 <2> <3> 113
Real Estate 141 143 141 140 141 141 141 141 141 141 <2> 0 112
Retail 108 109 109 108 109 109 109 109 110 110 <1> <2> 92
Services 123 123 123 123 123 123 123 124 124 123 0 0 120
Technology 102 105 103 102 104 104 104 105 105 106 <3> <4> 76
Telecom 158 159 159 159 159 159 160 160 161 161 <1> <3> 122
Transportation 127 128 128 127 127 127 127 127 128 128 <1> <1> 109
Utility 129 130 130 129 129 129 129 129 129 130 <1> <1> 104

                                  

New Issue Pipeline

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

US Debt Markets Salute 75th Anniversary of Pearl Harbor; Mischler Comments
December 2016      Debt Market Commentary   

Quigley’s Corner 12.07.16 Commemorating 75th Anniversary of Pearl Harbor

 

 75TH Anniversary of Pearl Harbor

Investment Grade Corporate Bond New Issue Re-Cap

Global Market Recap

IG Primary & Secondary Market Talking Points

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

New Issues Priced

Indexes and New Issue Volume

IG Credit Spreads by Rating

IG Credit Spreads by Rating

New Issue Pipeline

M&A Pipeline

Lipper Funds Flow Report

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

Everyone should stop to give more than mere pause to remember or recall Pearl Harbor today, not just the nation’s oldest Service Disabled Veteran broker dealer However, it does resonate with us here at team Mischler that much more since we do own the privilege and honor of that bragging right.

It all began on a quiet, peaceful and unassuming Sunday, December 7th, 1941 at 7:55 a.m. when a fleet of 353 Japanese dive bombers, level bombers and fighters bearing the Rising Sun on their wings first appeared above the blue skies over Oahu island.  At 8:06 a.m. four armor-piercing bombs struck the USS Arizona – one penetrating the ship and exploding three decks below the surface. The detonation ignited one hundred tons of black powder in the interior of the vessel. The resulting explosion broke the battleship in half sending a column of fire and red smoke a thousand feet into the air. Within eight minutes of that first bomb strike, the Arizona lay on the floor of Pearl Harbor. 1,177 officers, sailors and marines including 23 sets of brothers, went down with it making the Day that Will Live in Infamy – the worst single disaster in U.S. naval history. About half of the total number of Americans killed that day were on this ship. In total 2,403 Americans including 63 civilians were killed and 1,178 more were wounded.

Today, the wreckage of the USS Arizona leaks about one quart of oil each day.  Veteran survivors call them tears, believing that the USS Arizona will continue to leak until all survivors have joined their shipmates in the watery grave.

 

remember-pearl-harbor-mischler-veteran-owned-broker-dealer
The USS Arizona, December 7th, 1941 8:05 a.m. (0805)

 

On that fateful day, Pearl Harbor became just as pivotal to our American identity as July 4th 1776.  The United States bounced back in double time as all but three of the ships that were damaged or sunk on December 7th were raised, repaired and sailed again. In fact, by the end of World War II our great nation and its honored veterans of the Greatest Generation chased down and completely destroyed every Japanese aircraft carrier used to launch the attack on Pearl Harbor.  That was a priority – a statement to the world.

 

Many do not realize that on that same day, Japanese air forces also attacked Hong Kong, Guam, the Philippine Islands, Wake Island, Midway Island and American ships were torpedoed on the high seas between San Francisco and Hawaii.

The distance of Hawaii from Japan made it very clear that this was a surprise attack.  As Roosevelt expressed in his famous speech, No matter how long it may take us to overcome this premeditated invasion, the American people in their righteous might will win through to absolute victory. I believe I interpret the will of the Congress and of the people when I assert that we will not only defend ourselves to the uttermost, but will make very certain that this form of treachery shall never endanger us again. Hostilities exist. There is no blinking at the fact that that our people, our territory and our interests are in grave danger.  With confidence in our armed forces – with the unbounding determination of our people – we will gain the inevitable triumph – so help us God.”

The man, our military and we as a people kept that promise. It was our entrance into World War II the end of which left our great country the beacon of hope to the rest of the free world forever.

pearl-harbor-anniversary-mischler-veteran-owned-broker-dealer

Cover of The New York Times 75 years ago today.

 

Famous Leadership Quotes Born out of Pearl Harbor onto Victory in World War II

 

“Yesterday, December 7, 1941 – a date that will live in infamy – the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan.”

-Franklin D. Roosevelt

 

“You ask what is our aim? I can answer in one word: Victory. Victory at all costs. Victory in spite of all terror. Victory however long and hard the road may be. For without victory there is no survival.”

-Winston Churchill

“May God have mercy upon my enemies, because I won’t.”

-George S. Patton           

 

“Soldiers, Sailors and Airmen of the Allied Expeditionary Force! You are about to embark upon a great crusade, toward which we have striven these many months. The eyes of the world are upon you. The hopes and prayers of liberty loving people everywhere march with you.”

-Dwight Eisenhower


75th Anniversary: Pearl Harbor Veteran Remembrance Day

 

It is our responsibility and our duty to remember and pay tribute to our veterans and especially today to those of the Greatest Generation who took part in World War II, the global war that was the most widespread in global history directly involving over 100 million people across 30 nations.  The result – 3% of the world’s population were killed or 80 million people. The collective memory of what happened 75 years ago today is fading as our veterans grow older. To this very day many of those surviving veterans make journeys to Hawaii annually to pay their respects to their fellow sailors and marines and to remember and reflect upon the day that changed their lives forever. The challenge for all of us is to keep their remembrance alive.

 

I’d like to share with you all an e-mail I received from the Senior Funding Manager at one the top 15 U.S. corporations so, it’s one that you all bank.

The person wrote:

Ron,

  • I get a lot of these newsletters/e-mails and most are the same…good, but the same.  Yours is different and I have been reading them (and forwarding parts to family members who may also enjoy your “editorial” pieces).
  • I appreciate having a true veteran-owned firm on my team. My Dad was a Korean vet and my father-in-law actually fought in the Army in Korea.

 

I can’t tell you how much it means to me personally, given the time and effort put into the “QC” each and every day to receive a note like this. However, it means that much more to team Mischler Financial when critically important clients of and relationships with our great nation’s oldest Service Disabled veteran broker dealer take the time to share their own personal veteran stories with us.  It makes all this worthwhile.  Team Mischler and I thank the person in question for sharing that.  You know who you are and it is very much appreciated.

mischler-pearl-harbor-anniversary-veteran-salute

Today’s Ceremony at the USS Arizona Memorial

 

The names of all the sailors who perished aboard the Arizona are inscribed on the wall inside the USS Arizona Memorial.

The names of all of our U.S. Marines who were killed is to the right.

 

The inscription reads:
“To the memory of the gallant men here entombed and their shipmates who gave their lives in action on December 7, 1941 on the U.S.S. Arizona.”

 

  • There were 16,112,566 members of the United States Armed Forces during World War II.
  • There were 291,557 battle deaths.
  • 113,842 other deaths in service (non-theater).
  • …..and 670,846 non-mortal woundings.
  • According to the Department of Veterans Affairs, around 620,000 (3.85%) American veterans from the war are estimated to still be alive as of 2016.
  • During the World War II conflict 464 United States military personnel received the Medal of Honor, 266 of them posthumously.
  • There are currently six living World War II Medal of Honor recipients.
  • The Department of Veterans Affairs estimates that 372 American World War II veterans die every day.

It took all of one day 75 years ago today for the United States of America to become the world’s defender of humanity, democracy, liberty and of all the value systems cherished by free people everywhere. America and Americans turned our national tragedy into the birth of our becoming the leader of the Free World.  The war to end all wars is the very thing that bound our country and our people together.  Decades later Vietnam ripped us apart.  Today with prevailing divides it’s time to learn once again that a nation under duress and divide can come together to realize its full potential.  To once again have the world endear themselves to us knowing we will always do the right thing.  We will always be a beacon of hope and the land of opportunity and dreams.

“America will forever remain the land of the free, only so long as it is the home of the brave.” –Elmer Davis

 

pearl-harbor-survivor-us-military-veterans

Pearl Harbor Survivor of Hickam Field that was bombed and strafed resulting in 139 killed and 303 wounded.

 

Have a great evening and God Bless our Veterans!
Ron Quigley

 

Investment Grade New Issue Re-Cap 

 

Yesterday seemed very slow despite that some issuers tapped.  Today was a similarly slow day although 3 IG Corporate issuers priced 4 tranches between them totaling $2.70b.  The SSA space featured a small $200mm KBN tap of an outstanding FRN due 2020 bringing the all-in IG day total to $2.90b. Many agreed the holiday lull has officially begun to manifest itself in our IG DCM.  Sure there is a bit more to get done -opportunistic issuers, Roper Industries – but for the most part, heavy issuance days may be in hibernation until January.

Our WTD total is now over 93% of this week’s estimates $16.675b vs. $17.87b and the MTD tally is at 76% of forecasts or $31.605b vs. $41.52b.

 

Global Market Recap

 

Today is the 75th Anniversary of Pearl Harbor: God Bless! -TF

 

  • S. Treasuries – USTs, Bunds, Gilts & Peripherals rallied despite a sizable stock rally.
  • Stocks – Global stock rally. S&P’s and Dow at all-time highs. EU banks on fire.
  • Economic – U.S. non-event today. China foreign reserves down. Weak U.K. data.
  • Currencies – USD was weaker vs. 4 of the Big 5.
  • Commodities – CRB, crude oil & copper down while gold & silver (+2.8%) rallied.
  • CDX IG: -1.57 to 67.97
  • CDX HY: -10.80 to 363.0
  • CDX EM: -9.02 to 247.22

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

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

  • EPR Properties upsized today’s 10-year Senior Notes new issue to $450mm from $300m at the launch and at the tightest side of guidance.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 4 IG Corporate-only new issues, including today’s KeyCorp Pfd., was <27.19> bps.
  • BAML’s IG Master Index tightened 1 bp to +134 vs. +135.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +128.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +175.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $20.1b on Tuesday versus $14.0b on Monday and $18.4b the previous Tuesday.
  • The 10-DMA stands at $16.2b.

 

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

 

IG Corporate New Issuance This Week
12/05-12/09
vs. Current
WTD – $16.675b
December 2016
Forecasts
vs. Current
MTD – $31.605b
Low-End Avg. $16.78b 99.37% $40.87b 77.33%
Midpoint Avg. $17.87b 93.31% $41.52b 76.12%
High-End Avg. $18.96b 87.95% $42.17b 74.95%
The Low $10b 166.75% $30b 105.35%
The High $25b 66.70% $60b 52.67%

 

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 Tuesday’s session followed by the averages over the prior four weeks:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
12/05
TUES.
12/06
AVERAGES
WEEK 11/28
AVERAGES
WEEK 11/21
AVERAGES
WEEK 11/14
AVERAGES
WEEK 11/07
New Issue Concessions <1.05> bps 17.43 bps 3.53 bps 4.5 bps 3.62 bps <3.60> bps
Oversubscription Rates 4.16x 3.43 bps 3.38x 2.99x 2.78x 4.26x
Tenors 15.09 yrs 5.68 bps 10.84 yrs 12.14 yrs 11.28 yrs 13.31 yrs
Tranche Sizes $575mm $1,093m $711mm $929mm $1,039mm $692mm
Avg. Spd. Compression
IPTs to Launch
<19.43> bps <29.32> bps <17.60> bps <16.07> bps <17.69> bps <22.96> bps

 

New Issues Priced

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

For ratings I use the better two of Moody’s, S&P or Fitch.

 

IG

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Bank of Montreal Aa3/AA- FRN 12/12/2019 250 3mL+equiv 3mL+equiv 3mL+60 3mL=60 BAML/BMO/CITI/GS/WFS
Bank of Montreal Aa3/AA- 2.10% 12/12/2019 1,250 +high 80s/+87.5a +77a (+/-2) +75 +75 BAML/BMO/CITI/GS/WFS
BNP Paribas BBB-/BBB- 6.75% 3/14/2022 750 7.25%-7.375%
7.3125%a
6.875%a (+/-12.5) 6.75% $100.00 BNPP-sole
EPR Properties Baa2/BBB- 4.75% 12/15/2026 450 +high 200s
+287.5a
+265a (+/-5) +260 +260 CITI/JPM/RBC

           

SSA

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Kommunalbanken
(tap) New Total: $1bn
Aaa/AAA FRN 6/16/2020 200 N/A 3mL+27a 3mL+27 3mL+27 BAML/JPM/NATW

 

Indexes and New Issue Volume

 

Index Open Current Change
LUACOAS 1.28 1.28 0
IG27 69.54 68.035 <1.505>
HV27 143.40 138.77 <4.63>
VIX 11.79 12.22 0.43
S&P 2,212 2,241 29
DOW 19,251 19,549 298
 

USD

 

IG Corporates

 

USD

 

Total IG (+SSA)

DAY: $2.70 bn DAY: $2.90 bn
WTD: $16.675 bn WTD: $16.875 bn
MTD: $31.605 bn MTD: $37.555 bn
YTD: $1,276.367 bn YTD: $1,616.301 bn

 

Lipper Report/Fund Flows – Week ending November 30th    

     

  • For the week ended November 30th, Lipper U.S. Fund Flows reported an outflow of $1.302b from Corporate Investment Grade Funds (2016 YTD net inflow of $41.464b) and a net inflow of $341.7m into High Yield Funds (2016 YTD net inflow of $4.939b).
  • Over the same period, Lipper reported a net inflow of $339.2b into Loan Participation Funds (2016 YTD net inflow of $561.5m).
  • Emerging Market debt funds reported a net outflow of $188.9m (2016 YTD inflow of $5.743b).

 

IG Credit Spreads by Rating

The 10-day IG spread performance vs. the T10 across the ratings spectrum and how IG compared versus high yield:

Spreads across the four IG asset classes are an average 25.00 bps wider versus their post-Crisis lows!

 

ASSET CLASS 12/06 12/05 12/02 12/01 11/30 11/29 11/28 11/25 11/24 11/23 1-Day Change 10-Day Trend PC
low
IG Avg. 134 135 135 135 136 136 136 136 136 136 <1> <2> 106
“AAA” 75 75 75 75 75 75 75 75 75 75 0 0 50
“AA” 82 82 83 83 84 84 83 84 84 84 0 <2> 63
“A” 107 107 107 107 108 108 108 108 108 108 0 <1> 81
“BBB” 172 173 174 174 175 177 177 177 177 177 <1> <5> 142
IG vs. HY 316 323 329 327 331 333 330 328 330 330 <7> <14> 228

 

IG Credit Spreads by Industry

…….and a snapshot of the major investment grade sector credit spreads for the past ten sessions:

Spreads across the major industry sectors are an average 31.53 bps wider versus their post-Crisis lows!

                                    

INDUSTRY 12/06 12/05 12/02 12/01 11/30 11/29 11/28 11/25 11/24 11/23 1-Day Change 10-Day Trend PC
low
Automotive 121 121 122 122 123 123 123 124 124 124 0 <3> 67
Banking 125 125 126 125 125 126 126 126 126 126 0 <1> 98
Basic Industry 174 175 176 175 177 175 175 175 175 175 <1> <1> 143
Cap Goods 100 100 101 101 102 101 101 102 101 101 0 <1> 84
Cons. Prod. 109 109 110 109 110 110 110 111 111 111 0 <2> 85
Energy 174 175 177 177 180 181 180 181 180 180 <1> <6> 133
Financials 154 155 155 154 155 157 157 157 157 157 <1> <3> 97
Healthcare 117 118 118 118 119 118 118 119 119 119 <1> <2> 83
Industrials 136 137 137 137 139 139 139 139 140 140 <1> <4> 109
Insurance 146 146 147 146 147 147 147 147 147 147 0 <1> 120
Leisure 134 135 135 135 135 135 134 135 135 135 <1> <1> 115
Media 159 159 160 159 161 161 160 161 161 161 0 <2> 113
Real Estate 143 144 144 144 144 142 142 143 143 143 <1> 0 112
Retail 116 116 116 116 117 117 117 118 119 119 0 <3> 92
Services 128 128 128 128 128 127 127 128 128 128 0 0 120
Technology 110 110 110 110 112 112 113 113 113 113 0 <3> 76
Telecom 165 165 166 165 166 167 167 168 169 169 0 <4> 122
Transportation 135 135 135 135 136 135 135 136 135 135 0 0 109
Utility 135 135 136 135 135 135 135 136 135 135 0 0 104

 

New Issue Pipeline

Please note that for ratings I use the better two of Moody’s, S&P or Fitch.

 

  • The Republic of South Africa (Baa2/BBB-) mandated HSBC, J.P. Morgan and Nedbank to arrange fixed income investor meetings in the U.S., Europe, Middle East and Asia that began on Sunday, November 6th in Dubai.  Meetings took place thru Friday, November 11th.
  • Korea Hydro and Nuclear Power Co. Ltd. (Aa2/AA) mandated BNP Paribas and Citigroup to arrange fixed income investor meetings in the U.S. that began Tuesday, October 18th in New York, continued on the 19th in Boston and wrapped up in Chicago on the 20th.
  • Hyundai Capital Services (Baa1/A-) mandated Citigroup, HSBC and Nomura as joint book runners to arrange investor meetings that began on Monday, October 17th in preparation for a dollar-denominated 144a/REGS new issue.
  • Nacional Financiera SNC (A3/BBB+) mandated Bank of America/Merrill Lynch and HSBC as joint leads to arrange fixed income meetings that took place Wednesday, September 27th thru Thursday the 28th in London, New York, Boston and Los Angeles in preparation for a possible dollar-denominated new issue that could soon follow their conclusion.
  • Banco Inbursa (BBB+/BBB+) mandated Bank of America/Merrill Lynch, Citigroup and Credit Suisse as joint book runners to arrange fixed income investor meetings in the U.S., Mexico and Europe that began on Wednesday, September 7th and continued through the 12th making stops in Mexico, London, Boston, New York and L.A. Fitch recently assigned an expected long-term rating of “BBB+” to Banco Inbursa’s proposed $1.5b 10-year Senior Notes.
  • Industrial Bank of Korea (Aa2/AA-) mandated HSBC and Nomura to arrange fixed income investor meetings in Hong Kong and Singapore that began on Monday, August 22nd in preparation for a 144a/REGS dollar-denominated offering that could soon follow its conclusion.

 

M&A Pipeline – $303.84 Billion in Cumulative Enterprise Value!

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

Quigley’s Corner Veterans Day: Good Day for Green Bonds & Diversity
November 2016      Debt Market Commentary   

Quigley’s Corner 11.10.16  Veterans Day Edition; Investment Grade Debt Market Pulses: Green Bonds + Diversity


Honoring Veterans Day

Investment Grade New Issue Re-Cap 

Reviewing This Week’s IG Primary Market Driver Averages by the Numbers

IG Primary & Secondary Market Talking Points

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

The Goldman Sachs Group, Inc. $2.75b 10NC9 Deal Dashboard

Southern Power Co. $1.3b 3-part 3s/5s/30s

J.P. Morgan Chase & Co. $1.10b 11NC10 Deal Dashboard

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

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 November 9th  

Investment Grade Credit Spreads

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

mischler-veterans-day-debt-market-green-bonds-diversity

I have a lot for you here today – a tribute to our Vets on Veterans Day, the Global Market Recap, a Review of this Week’s Primary Market Driver Averages, IG Primary and Secondary Market Talking Points, The WTD and MTD Volume Tables and then Deal Dashboards for the three deals that Mischler was involved in today namely Goldman Sachs, Southern Power and J.P. Morgan Chase. Following that are today’s “Thank yous”, a drill down into the EEI’s Green panel discussion and of course the “Best and Brightest” numbers and thoughts for next week’s IG new issue volume.

Why is the “QC” so late tonight?  Because it was a VERY busy day today for your humble corner correspondent.  But rather than leave for the long weekend, I read the below and thought, “the veterans we celebrate tomorrow (today actually) are the ones who had it tough.”  Ours is a cakewalk compared to what the men and women in uniform do day in and day out – for all of us.  That was about all I needed to read to realize, the “QC” gets out in its entirety tonight with nothing missing.  No short cuts, no skipping sections. If people read it great. If they don’t, well at least I left it on the floor and finished the job the way you all expect it be finished – complete.

It’s more than the trade, it’s more than the new investor, it’s more than the coverage and the capital.  This firm is owned by Service Disabled Veterans.  Metal joints, limps, shrapnel stuck in their bodies, scars where you know something near fatal happened.  All humble all dedicated and all fiercely patriotic.  It makes decisions like sticking around to finish this job pretty damned easy and I do it because they earned the certification that gives all of us here at team Mischler the opportunity to do what we do.    It’s a no brainer.  1:00AM on Veterans Day.  That’s my small give back and tribute to the great team of veterans who run the nation’s oldest SDVBE.  Thank each and every one of you from the top, down.

Investment Grade New Issue Re-Cap 

 

6 IG Corporate issuers priced 11 tranches between them totaling $8.05b and taking the WTD total to 91% of this week’s syndicate midpoint average forecast or $8.995b vs. $9.83b.

Global Market Recap

  • S. Treasuries – JGB’s, Bunds, Gilts, etc., are having a rough go with President-elect Trump.
  • 3mth Libor – Set at the highest yield (0.90206%) since May 2009.
  • Stocks – Big rally for the Dow & a new all-time high. NASDAQ was red.
  • Economic – U.S. claims data was solid. Weaker data in France & Italy.
  • Currencies – USD outperformed 4 of the Big 5 but the Pound was the star today.
  • Commodities – Copper with another strong bid. Crude oil & gold closed red.
  • CDX IG: -0.28 to 74.18
  • CDX HY: +6.34 to 411.11
  • CDX EM: +29.47 to 272.20

CDX spreads mover wider after 3pm

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

-Tony Farren

 

Reviewing This Week’s IG Primary Market Driver Averages by the Numbers

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

 

  • NICS:  <3.60> bps
  • Oversubscription Rates: 4.26x
  • Tenors:  13.31 years
  • Tranche Sizes: $692mm
  • Spread Compression from IPTs to the Launch: <22.96> bps

 

Versus last Friday’s key primary market driver averages, NICs tightened a hefty <2.68 bps> to an average <3.60> bps vs. <0.92> bps while over subscription or bid-to-cover rates grew 0.93x to 4.26x vs. 3.33x last week.  Average tenors pushed way out 1.98 years to 13.31 yrs vs. 11.33 yrs while tranche sizes grew by $223mm to $692mm vs. $469mm..

Standard and Poor’s Investment Grade Composite Spreads tightened 2 bps to +184 versus last Friday’s +186.

For the week ended November 9th, Lipper U.S. Fund Flows reported an inflow of $675.4m into Corporate Investment Grade Funds (2016 YTD net inflow of $40.967b) and a net outflow of $668.6m from High Yield Funds (2016 YTD net inflow of $6.285b).

Week-on-week, BAML’s IG Master Index tightened a dramatic 5 bps to +136 vs. last Friday’s +141 close.  Spreads across the four IG asset classes also tightened a dramatic 5.25 bps to  bps to 26.75 vs. 32 as measured against their post-Crisis lows.  Looking at the 19 major industry sectors, spreads tightened 4.05 bps to 33.37 vs. 37.42 also against their post-Crisis lows.

IG Primary & Secondary Market Talking Points

 

  • Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 13 deals that printed, 11 tightened versus NIP for a 50% improvement rate while with 2 trading flat (15.50%).
  • For the week ended November 9th, Lipper U.S. Fund Flows reported an inflow of $675.4m into Corporate Investment Grade Funds (2016 YTD net inflow of $40.967b) and a net outflow of $668.6m from High Yield Funds (2016 YTD net inflow of $6.285b).
  • BAML’s IG Master Index tightened 1 bp to +136 vs. +137.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 2 bps to 1.30 vs. 1.32.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +184.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $20.2b on Wednesday versus $15b Tuesday and $17.5b the previous Wednesday.
  • The 10-DMA stands at $16.6b.

 

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

 

IG Corporate New Issuance This Week
11/07-11/11
vs. Current
WTD – 8.995b
November 2016 vs. Current
MTD – $16.461b
Low-End Avg. $8.09b 111.19% $90.70b 18.15%
Midpoint Avg. $9.83b 91.51% $92.11b 17.87%
High-End Avg. $11.57b 77.74% $93.52b 17.60%
The Low $0.1b 8995.00% $71b 23.18%
The High $20b 44.97% $110b 14.96%

 

The Goldman Sachs Group, Inc. (NYSE:GS) $2.75b 10NC9 Deal Dashboard

 

GS Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
10NC9 +150a +140a (+/-2.5) +137.5 +137.5 <12.5>  bps N/A 134/132 <3.5>

 

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

 

GS  Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
10NC9 $2.75b $7.5b 2.73x

 

Final Pricing – The Goldman Sachs Group, Inc.
GS $2.75b 3.50% due 10yr 11/16/2026 NC9 @ $99.741 or T+137.5

Southern Power Co. (NYSE:SO) $1.3b 3-part 3s/5s/30s

 

SO Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
1.95% 2019 +95-100 +85a (+/-5) +80 +80 <17.5> bps 0 80/78 flat
2.50% 2021 +110-115 +105a (+/-5) +100 +100 <12.5> bps 0 100/98 flat
4.95% 2046 +235a +215a (+/-5) +210 +210 <25> bps <1> 209/207 <1>

 

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

 

SO  Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
3yr $600mm $1.2b 2x
5yr $300mm $700mm 2.33x
30yr $400mm $1.2b 3x

 

Final Pricing – Southern Power Co.

SO $600mm 1.95% due 12/15/2019 @ $99.975 to yield 1.958% or T+80  MW+12.5
SO $300mm 2.50% due 12/15/2021 @ $99.781 to yield 2.546% or T+100  MW+15
SO $400mm 4.95% due 12/15/2046 @ $98.562 to yield 5.043% or T+120  MS +35

J.P. Morgan Chase & Co. (NYSE:JPM) $1.10b 11NC10 Deal Dashboard

 

JPM Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
11NC10 +170a +155a (+/-3) +152 +152 <18> bps N/A 151/148 <1>

 

Final Pricing – J.P. Morgan Chase & Co.

JPM $1.1b 3.625% due 12/01/2027 @ $99.827 to yield 3.644% or T+152


Team Mischler thanks today’s three issuers who rewarded the nation’s oldest Service Disabled Veteran certified broker dealer with Co-Manager roles  –
The Goldman Sachs Group, Inc., J.P. Morgan Chase & Co. and Southern Power Co.

There are a lot of people on the issuance side as well as syndicate to thank.  The day has been relentlessly busy – which is always a good thing –

Next up was Southern Company and today’s $1.3B three-part 3s/5s/30s transaction that will use 3- and 5-year proceeds to fund eligible “Green” projects including solar and wind facilities located in the U.S. As I have written here many times before, the social responsibility overlay between Green initiatives and Diversity and Inclusion procurement initiatives are clear.  Why not turn to one of the power sector’s top financial minds none other than Southern Company’s Executive Vice President and Chief Financial Officer, Art Beattie who participated in a very meaningful panel discussion titled, Financing the Clean Energy Future at this week’s 51st Annual EEI Financial Conference in Phoenix that ran Sunday thru Wednesday.  The panel discussed Sustainability Reporting, Environmental, Social, Governance (ESG) Assessment, and of course Green Bonds.  The new buzzwords in the burgeoning field of socially and environmentally conscious investing.  The panel discussion also focused on current challenges that investment restrictions present, how they may grow in the future, and the potential path forward for old and new technologies.  Capturing new investment opportunities were also explored.

Today Southern Power Company illustrated what I mean when I say mandates and initiatives start from the top/down.  Quite literally, “SO’s” own CFO introduced new initiatives, he talked about them in front of the most seasoned power professionals in Phoenix replete with industry CEO’s other CFOs and movers and shakers. Sure enough, today Southern Power bridged Green bonds with D&I to create a wonderful opportunity that helped capture new high quality investors to the transaction.  Mischler is proud to say that we were active co-managers on Southern Company’s earlier green bond as well as today’s along with Apple’s and MTA green issuances.  Considering that Green bonds represent less than one half of one percent of the $20 trillion bond market we feel we’re in privileged company.  It’s not about where we are today, rather it’s about tomorrow and green is good as is social responsibility.  We see this mandate extending into asset backed issuance.

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 22 syndicate desks surveyed in today’s Best & Brightest poll.  21 of those participants are among 2016’s top 24 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 22 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).  The participating desks represent 79.82% of all IG dollar-denominated new issue underwriting as of today’s table share percentage 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.

Syndicate IG Corporate-only Volume Estimates for Next Week

 

IG Corporate New Issuance Next Week
11/14-11/18
Low-End Avg. $28.32b
Midpoint Avg. $29.45b
High-End Avg. $30.59b
The Low $20b
The High $40b

 

A Look at How the Voting Brackets Broke-Out for Next Week

 

Next Week
11/14-11/18
1: 20b
1: 20-25b
3: 25b
6: 25-30b
4: 30b
2: 30-35b
3: 35b
1: 35-40b
1:38b

 

 

Enjoy a safe and happy Veteran’s Day weekend!
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

 

Here is this week’s day-by-day re-cap of the five key primary market driver averages for IG Corporates followed by this week’s and the prior three week’s averages:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
11/07
TUES.
11/08
WED.
11/09
THUR.
11/10
FRI.
11/11
AVERAGES
WEEK 11/07
AVERAGES
WEEK 10/31
AVERAGES
WEEK 10/24
AVERAGES
WEEK 10/17
New Issue Concessions <3> bps N/A N/A <3.67> bps Holiday <3.60> bps <0.87> bps <0.51> bps 3.31 bps
Oversubscription Rates 2.50x N/A N/A 4.44x Holiday 4.26x 3.32x 2.61x 3.05x
Tenors 4.50 yrs N/A N/A 14.91 yrs Holiday 13.31 yrs 11.33 yrs 7.77 yrs 9.16 yrs
Tranche Sizes $472mm N/A N/A $732mm Holiday $692mm $491mm $818mm $1,137mm
Avg. Spd. Compression
IPTs to Launch
<16.5> bps N/A N/A <24.14> bps Holiday <22.96> bps <17.87> yrs <17.42> bps

 

New Issues Priced

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

For ratings I use the better two of Moody’s, S&P or Fitch.

 

IG

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
CF Industries Inc. Baa3/BBB 3.40% 12/01/2021 500 <50> curve +195a (+/-5) +190 +190 GS/MS
CF Industries Inc. Baa3/BBB 4.50% 12/01/2026 750 +high 200s/+287.5 +250a (+/-5) +245 +245 GS/MS
Con Edison Co. of NY Inc. A2/A- 2.90% 12/01/2026 250 +100a +85a (+/-5) +80 +80 CITI/JPM/MIZ/MUFG
Con Edison Co. of NY Inc. A2/A- 4.30% 12/01/2056 500 +165a +145a (+/-5) +140 +140 CITI/JPM/MIZ/MUFG
Goldman Sachs Group, Inc. A3/A 3.50% 11/16/2029 2,750 +150a +140a (+/-2.5) +137.50 +137.5 GS-sole
J.P. Morgan Chase & Co. Baa1/BBB+ 3.625% 12/01/2027 1,100 +170a +155a (+/-3) +152 +152 JPM-sole`
Southern Power Co. Baa1/BBB+ 1.95% 12/15/2019 600 +95-100 +85a (+/-5) +80 +80 BAML/BNPP/BARC/MIZ/SCOT/USB
Southern Power Co. Baa1/BBB+ 2.50% 12/15/2021 300 +110-115 +105a (+/-5) +100 +100 BAML/BNPP/BARC/MIZ/SCOT/USB
Southern Power Co. Baa1/BBB+ 4.95% 12/15/2046 400 +235a +215a (+/-5) +210 +210 BAML/BNPP/BARC/MIZ/SCOT/USB
Virginia Electric & Power A2/A 2.95% 11/15/2026 400 +105a +90a (+/-5) +85 +85 BNPP/MUFG/SCOT/STRH/USB
Virginia Electric & Power A2/A 4.00% 11/15/2046 500 +135a +115a (+/-5) +110 +110 BNPP/MUFG/SCOT/STRH/USB

 

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

Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 13 deals that printed, 11 tightened versus NIP for a 84.50% improvement rate while with 2 trading flat (15.50%).

Issues are listed from the most recent pricings at the top working back to Monday at the bottom.  Thanks! –RQ

 

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
CF Industries Inc. Baa3/BBB 3.40% 12/01/2021 500 <50> curve +195a (+/-5) +190 +190 177/174
CF Industries Inc. Baa3/BBB 4.50% 12/01/2026 750 +high 200s/+287.5 +250a (+/-5) +245 +245 231/228
Con Edison Co. of NY Inc. A2/A- 2.90% 12/01/2026 250 +100a +85a (+/-5) +80 +80 79/77
Con Edison Co. of NY Inc. A2/A- 4.30% 12/01/2056 500 +165a +145a (+/-5) +140 +140 137/135
Goldman Sachs Group, Inc. A3/A 3.50% 11/16/2029 2,750 +150a +140a (+/-2.5) +137.50 +137.5 134/132
J.P. Morgan Chase & Co. Baa1/BBB+ 3.625% 12/01/2027 1,100 +170a +155a (+/-3) +152 +152 151/148
Southern Power Co. Baa1/BBB+ 1.95% 12/15/2019 600 +95-100 +85a (+/-5) +80 +80 80/78
Southern Power Co. Baa1/BBB+ 2.50% 12/15/2021 300 +110-115 +105a (+/-5) +100 +100 100/98
Southern Power Co. Baa1/BBB+ 4.95% 12/15/2046 400 +235a +215a (+/-5) +210 +210 209/207
Virginia Electric & Power A2/A 2.95% 11/15/2026 400 +105a +90a (+/-5) +85 +85 84/82
Virginia Electric & Power A2/A 4.00% 11/15/2046 500 +135a +115a (+/-5) +110 +110 109/107
Kellogg Co. Baa2/BBB 2.65% 12/01/2023 600 +120-125 +110a (+/-3) +107 +107 105/103
Stanley Black & Decker A-/BBB+ 1.622% 11/17/2018 345 +95-100 N/A +80 +80 75/73

 

Indexes and New Issue Volume

 

Index Open Current Change
LUACOAS 1.32 1.30 <2>
IG27 74.467 75.447 0.98
HV27 168.795 163.29 <5.505>
VIX 14.38 14.74 0.36
S&P 2,163 2,167 4
DOW 18,589 18,807 218
 

USD

 

IG Corporates

 

USD

 

Total IG (+SSA)

DAY: $8.05 bn DAY: $8.05 bn
WTD: $8.995 bn WTD: $8.995 bn
MTD: $16.461 bn MTD: $16.461 bn
YTD: $1,185.242 bn YTD: $1,515.126 bn

 

Lipper Report/Fund Flows – Week ending November 9th   

     

  • For the week ended November 9th, Lipper U.S. Fund Flows reported an inflow of $675.4m into Corporate Investment Grade Funds (2016 YTD net inflow of $40.967b) and a net outflow of $668.6m from High Yield Funds (2016 YTD net inflow of $6.285b).
  • Over the same period, Lipper reported a net outflow of $45.4m from Loan Participation Funds (2016 YTD net outflow of $1.563b).
  • Emerging Market debt funds reported a net inflow of $345.7m (2016 YTD inflow of $7.522b).

 

IG Credit Spreads by Rating

The 10-day IG spread performance vs. the T10 across the ratings spectrum and how IG compared versus high yield:

Spreads across the four IG asset classes are an average 26.75 bps wider versus their post-Crisis lows!

 

ASSET CLASS 11/10 11/09 11/08 11/07 11/04 11/03 11/02 11/01 10/31 10/28 1-Day Change 10-Day Trend PC
low
IG Avg. 136 137 139 140 141 141 140 139 138 137 <1> <1> 106
“AAA” 76 80 82 82 83 83 83 82 82 80 <4> <4> 50
“AA” 83 85 85 86 87 87 87 86 86 85 <2> <2> 63
“A” 107 109 110 111 112 112 112 111 111 110 <2> <3> 81
“BBB” 177 178 180 181 183 182 181 180 178 176 <1> +1 142
IG vs. HY 361 357 359 361 379 374 375 366 353 339 +4 +22 228

 

IG Credit Spreads by Industry

…….and a snapshot of the major investment grade sector credit spreads for the past ten sessions:

Spreads across the major industry sectors are an average 33.37 bps wider versus their post-Crisis lows!

                                    

INDUSTRY 11/10 11/09 11/08 11/07 11/04 11/03 11/02 11/01 10/31 10/28 1-Day Change 10-Day Trend PC
low
Automotive 119 121 121 122 122 120 122 121 120 119 <2> 0 67
Banking 124 127 128  129 130 130 130 129 129 128 <3> <4> 98
Basic Industry 176 177 179 180 182 181 181 180 179 179 <1> <3> 143
Cap Goods 102 103 105 105 107 106 106 105 105 103 <1> <1> 84
Cons. Prod. 108 109 110 111 112 112 112 111 110 109 <1> <1> 85
Energy 179 179 180 182 184 183 183 180 179 177 0 +2 133
Financials 161 162 163 164 167 166 165 164 162 160 <1> +1 97
Healthcare 118 121 124 124 126 124 123 122 120 118 <3> 0 83
Industrials 138 140 141 142 144 143 143 141 140 139 <2> <1> 109
Insurance 148 150 152 153 154 154 153 153 153 153 <2> <5> 120
Leisure 138 139 138 138 139 138 138 138 138 138 <1> 0 115
Media 161 163 164 165 167 166 165 164 162 160 <2> +1 113
Real Estate 146 147 145 146 146 146 146 146 146 146 <1> 0 112
Retail 118 121 122 122 123 123 122 121 120 118 <3> 0 92
Services 130 130 130 130 130 130 130 129 129 129 0 +1 120
Technology 112 115 117 118 120 120 120 119 117 115 <3> <3> 76
Telecom 165 168 170 171 173 172 172 170 168 167 <3> <2> 122
Transportation 136 137 138 139 140 140 139 138 137 137 <1> <1> 109
Utility 137 137 138 138 139 139 138 138 138 137 0 0 104

 

New Issue Pipeline

Please note that for ratings I use the better two of Moody’s, S&P or Fitch.

 

  • HollyFrontier Corp. (Baa3/BBB-) asked Bank of America/Merrill Lynch, Citigroup, Goldman Sachs, MUFG and Toronto Dominion to arrange fixed income investor calls are scheduled for Monday and Tuesday, November 14th and 15th.  Citigroup coordinated.
  • Bank Nederlandse Gemeenten (Aaa/AAA) the Dutch bank and Local Government Funding Agency mandated BNP Paribas, HSBC and Toronto Dominion to arrange fixed income investor calls in preparation for its inaugural 144a/REGS Sustainability Bond transaction that could soon follow their conclusion.
  • The Republic of South Africa (Baa2/BBB-) mandated HSBC, J.P. Morgan and Nedbank to arrange fixed income investor meetings in the U.S., Europe, Middle East and Asia that began on Sunday, November 6th in Dubai.  Meetings took place thru Friday, November 11th.
  • Korea Hydro and Nuclear Power Co. Ltd. (Aa2/AA) mandated BNP Paribas and Citigroup to arrange fixed income investor meetings in the U.S. that began Tuesday, October 18th in New York, continued on the 19th in Boston and wrapped up in Chicago on the 20th.
  • Hyundai Capital Services (Baa1/A-) mandated Citigroup, HSBC and Nomura as joint book runners to arrange investor meetings that began on Monday, October 17th in preparation for a dollar-denominated 144a/REGS new issue.
  • Nacional Financiera SNC (A3/BBB+) mandated Bank of America/Merrill Lynch and HSBC as joint leads to arrange fixed income meetings that took place Wednesday, September 27th thru Thursday the 28th in London, New York, Boston and Los Angeles in preparation for a possible dollar-denominated new issue that could soon follow their conclusion.
  • Banco Inbursa (BBB+/BBB+) mandated Bank of America/Merrill Lynch, Citigroup and Credit Suisse as joint book runners to arrange fixed income investor meetings in the U.S., Mexico and Europe that began on Wednesday, September 7th and continued through the 12th making stops in Mexico, London, Boston, New York and L.A. Fitch recently assigned an expected long-term rating of “BBB+” to Banco Inbursa’s proposed $1.5b 10-year Senior Notes.
  • Industrial Bank of Korea (Aa2/AA-) mandated HSBC and Nomura to arrange fixed income investor meetings in Hong Kong and Singapore that began on Monday, August 22nd in preparation for a 144a/REGS dollar-denominated offering that could soon follow its conclusion.

 

M&A Pipeline – $330.60 Billion in Cumulative Enterprise Value!

Please note that for ratings I use the better two of Moody’s, S&P or Fitch.

 

  • General Electric Co. (A3/A), a primarily equipment manufacturer, announced on November 1st that it will partner with Baker Hughes Inc. (A/A-), which is essentially a drilling and hydraulic fracturing company in what is being billed as the first “full stream” oil services company including upstream exploration and production, midstream transportation and downstream refining and marketing. Together the GE-controlled entity will represent the world’s second largest oi-field services company with projected revenues of $34bn in 2020. GE will be a 62.5% owner. GE is expected to borrow $7.4b to fund the deal.
  • Qualcomm Inc. (A1/A+) agreed to acquire NXP Semiconductors NV (Ba2/BB+) for $39b in what is the largest semiconductor purchase in history. It’s also the second largest tech merger behind Dell’s purchase of EMC.  Qualcomm will pay a 34% premium and including debt the deal is worth $47b. The deal will be financed with offshore cash and new debt. Goldman Sachs and Evercore advised Qualcomm.  Goldman Sachs and J.P. Morgan are providing debt financing for the deal.
  • AT&T (A-/BBB+) agreed to buy Time Warner (Baa2/BBB+) for $85.4b.  This follows Comcast’s purchase of NBCUniversal and Verizon’s acquisition of Yahoo. Both AT&T and Time Warner boards approved the deal that now has to confront regulatory hurdles. It hopes to complete the transaction by the end of 2017.  To finance the half cash, half stock deal will involves AT&T taking on $40b in bridge loans.
  • American Electric Power (“AEP) (Baa1/BBB+) today agreed to sell four power plants in the Midwest for a total of $2.17b to a private equity firm created by Blackstone Group and ArcLight Capital Partners. AEP is divesting of many wholesale power markets focusing instead more on its regulated utility businesses.  The closing of the transaction is expected sometime in Q1 2017.
  • Bayer AG (Baa3/BBB+) agreed to buy Monsanto Co. (A3/A-) in a deal valued at $66 billion. Bayer agreed to pay $128 per share in cash – a 21% premium to Monsanto’s closing price on 9/13.  It represents the year’s largest deal and the single largest takeover by a German company.
  • NextEra Energy Inc. (Baa1/A-) agreed to purchase Dallas-based, Oncor Electric Delivery Co. LLC (Baa1/A) for $18.4b. Oncor is the largest electric transmission operator in Texas serving approximately 10 million customers in the Lone Star state.  This not only gives NextEra a dominant position in Texas’ electric sector but is critical in taking Energy Future Holdings out of chapter 11 bankruptcy.
  • Zimmer Biomet (Baa3/BBB) completed its offer to purchase all outstanding shares of LDR stock on Wednesday, July 13th.  Zimmer announced on June 7th that it agreed to purchase medical device maker LDR Holding Corp. for $37 per share in cash for a total transaction value of $1b. Zimmer expects to maintain its IG rating and to issue $750mm in Senior Unsecured Notes in order to repay the credit facility. Goldman Sachs is acting as advisor to Zimmer Biomet.
  • This past February, Algonquin Power & Utilities Corp. (NR/BBB) announced it will acquire The Empire District Electric Company (N/A) in a $3.4b CAD or $2.4b USD equivalent all cash transaction and today, Thursday, June 16th, Empire’s shareholders overwhelmingly voted in support of the merger to the tune of 95%.  Regulatory approvals are the next step before finalizing the sale expected sometime in Q1 2017. The merger assumes $900mm in USD debt.
  • Symantec (Baa3/BBB-) announced on June 13th that it entered into an agreement to purchase Blue Coat (Caa2/CCC) for $4.56b in cash. The deal will close sometime in Q3 2016.  Both company boards approved the deal. The transaction will be funded with available cash and $2.8b of new debt. J.P. Morgan is the lead adviser to Symantec.  Bank of America/Merrill Lynch, Barclays and Wells Fargo are also advisers.
  • On Friday, April 29th the Alere Inc. (Caa1/CCC+) Board of Directors rejected a request by Abbott Labs (A2/A+) to terminate their merger agreement in return for around $40mm for transaction expenses. Abbott cited concerns about various Alere representations in their merger agreement including a delayed 2015 Form 10-K filing as well as government investigations. Abbott Labs (A2/A+) had announced on Monday, February Baa1/BBB+1st, that it would acquire Alere Inc. (Caa1/CCC+) for $5.8b in which “ABT” would pay $56 per share of ”ALR.”  The deal was to be financed with debt.  ABT expects a strong IG rating despite the new debt. The deal is subject to “ALR” shareholder as well as regulatory approvals.
  • Abbott Labs (A2/A+) announced on Thursday, April 28th that it will buy St. Jude’s Medical Inc. (Baa2/A-) in a cash-stock deal valued at $25b to reinforce the medical devices maker’s stake in cardiovascular care. Abbott will fund the cash portion of the transaction with new medium- and long-term debt. Bank of America/Merrill Lynch and Evercore are acting as advisors to Abbott. The deal is expected to close by Q4 2016.
  • Sherwin Williams (A2/A-) announced on Monday, March 21st that it will purchase Valspar Corp. (Baa2/BBB) for $9.3b or $113 per share.  The acquisition will help Sherwin-Williams gain access to big-box retailers like Lowe’s where Velspar has access. It will also provide overseas expansion opportunities.  Sherwin Williams will finance the merger with available cash, existing credit facilities and new debt.  The deal should close sometime before the end of Q1 2017.
  • TE Connectivity (A-/A-) announced it will buy medical device maker Creganna Medical for $895mm in cash.  The deal will be funded with available cash and debt.
  • Anthem Inc. (Baa2/A) in July 2015, proposed to purchase Cigna Corp. (Baa1/A) for $54b or $188 per share furthering the consolidation in the healthcare sector. The deal is expected to close sometime during the second half of 2016. The merger would involve 53mm members and will include $22b in new debt and loans.
  • Amphenol Corporation (Baa1/BBB+) announced on June 29th 2015 that it made a binding offer to acquire 100% of FCI Asia
TODAY’S ECONOMIC DATA PERIOD SURVEYED ESTIMATES ACTUAL NUMBER PRIOR NUMBER PRIOR REVISED
Initial Jobless Claims Nov. 5 260k 254k 265k —-
Continuing Claims Oct. 29 2025k 2041k 2026k 2023k
Bloomberg Consumer Comfort Nov. 6 —- 45.1 44.6 —-
Mortgage Delinquencies Q3 —- 4.52% 4.66% —-
MBA Mortgage Foreclosures Q3 —- 1.55% 1.64% —-
Monthly Budget Statement October <$70.0b> <$44.2b> <$136.6b> —-

 

Rates Trading Lab

 

U.S. Treasuries had another poor performance today but not even close to the disaster that occurred yesterday. Today the benchmarks lost between 1.3 bps (2yr: 0.907%) to 6.1 bps (7yr: 1.890%). It has been a brutal week for the Treasury market. Overseas bond markets were also taken to the woodshed today (JGB’s, Bunds, Gilts, etc…). Supply was a factor today ($15 bn 30yr auction / details below) but the Trump victory on Tuesday night is 99% of the reason for the extremely heavy pressure on the Treasury market. Today the Trump camp was talking about rolling back Dodd-Frank and that type of talk leads to risk on and rates selling. I think the Treasury sell off is overdone but who wants to step in front of a freight train heading down hill with no breaks? USTs need a catalyst to offset the Trump sell off and at this point I am not sure what that catalyst will be. The Dow closed up over 200 points and traded at a new all-time high today. On the flip side the NASDAQ was in the loss column. It has been a volatile and wild two days since Trump won the Presidential election. What will the next four years bring?

-Tony Farren

 

UST Resistance/Support Table

 

CT3 CT5 CT7 CT10 CT30
RESISTANCE LEVEL 99-23+ 99-00+ 98-28+ 99-11+ 89-01+
RESISTANCE LEVEL 99-21+ 98-26+ 98-17+ 99-03+ 88-03+
RESISTANCE LEVEL 99-19 98-20+ 98-11+ 98-29 87-08+
         
SUPPORT LEVEL 99-166 98-176 97-30 98-22 85-27+
SUPPORT LEVEL 99-146 98-12 97-23 98-13+ 85-11
SUPPORT LEVEL 99-116 98-08 97-18 98-01 84-24+

 

Tomorrow’s Calendar

 

  • China Data: Nothing Scheduled
  • Japan Data: Loans & Discounts Corp, PPI, Tertiary Industry Index MoM
  • Australia: Nothing Scheduled
  • EU Data: German Oct CPI U.K. Sep Const Output
  • S. Data: Nov U Mich
  • Supply: Italy 3, 7, 24, 31y (€5.25-7.25bn), Spain/France details
  • Events: Ratings reviews, U.S. closed
  • Speeches: Fischer, Debelle, Poloz, Lane

(more…)

IG Corporate Debt: PepsiCo-Good AND Better For You; Mischler Comment
October 2016      Debt Market Commentary, Recent Deals   

Quigley’s Corner 10.03.16- PepsiCo: Good and Better For You

 

Investment Grade New Issue Re-Cap – New Records, Negative Rates and a Blockbuster from Pepsi

Global Market Recap

IG Primary & Secondary Market Talking Points

The PepsiCo Inc. $4.5b 6-part Deal Dashboard

A Look at Socially-Responsible PepsiCo Inc.: Good and Better For You.

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending September 28th

IG Credit Spreads (by Rating & Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

In the limited time I had today to thumb through a very interesting Q3 report from friends and financial news reporters John Balassi and Michael Gambale of Thomson Reuters fame, the multi-billion dollar multinational mass media and information firm, I was taken by a couple talking points about Global New Issuance that you should find noteworthy:

o   Global Debt Capital Markets activity is up 27% to $5.5 trillion through Q3.

o   Q3 U.S. Investment Grade Corporate Debt is 9%

o   Global High Yield is down 21%

o   Government and Agency offerings rose 76%

o   Emerging Markets Debt is down 23%

o   Overall Debt Underwriting fees declined 9%

However, what’s more incredible is that we are witnessing an unprecedented surge in bonds the world over that are guaranteed to lose investors’ money if held to maturity given their negative yields.  In an article written by Bloomberg Editorial’s Phil Kuntz, the total face value of negative yielding corporate and sovereign debt in the “Bloomberg Barclays Global Aggregate Index of investment grade bonds jumped to $11.6 trillion as of September 30th, up 6.1% from the prior month……….less than one seventh of the world’s negative yielding debt is owed by businesses. Finance companies issued……almost 80% ….totaling $1.3 trillion!” The number includes debt one year and out.  Corporations account for 15% of the world’s negative debt while 85% is derived from governments.  That’s not good news folks.

This pie chart displays the drama in those numbers:

mischler corporate debt comment

 

So, what’s this got to with new issuance?  Everything because the place investors go to fill their portfolios is the safe haven of better rated IG corporate debt right here is our U.S. dollar-denominated primary markets.  In what continues to be a historically low rate environment, corporations have a wonderful window of opportunity before them to secure favorable funding for M&A, expansions, lower refi levels, you name.  What’s more, investors are attracted to the relative safe haven of these credits that do, in fact offer the best balance in our world in better managing risk exposure while securing a decent return, comparatively speaking.

 

That’s our segue into this evening’s IG DCM that owned the new issues leaderboards as 3 corporate issuers priced 11 tranches between them totaling $7.15b.  But the biggest deal of the day belonged to PepsiCo’s (NYSE:PEP) $4.5b 6-part Senior Notes transaction comprised of 3- and 5-year FXD/FRNs, 10s and 30s.  It also happens to be the Deal-of-the-Day as Mischler Financial, our nation’s oldest Service Disabled veteran broker dealer was more than honored to be named an active 1.00% Co-Manager and was showcased as one of two diversity co’s on today’s deal.  So, I invite you to join me in the relative value story of this deal and PepsiCo’s Diversity & Inclusion initiatives.

But first, here’s the global re-cap and a look at all today’s primary market talking points and issuance!

 

Global Market Recap

 

o   U.S. Treasuries – Better than expected ISM manufacturing hits the front end.

o   Stocks – U.S. stocks red (3:30pm). FTSE, Nikkei & HS rallied. Europe mostly red.

o   Economic – ISM manufacturing moved back over 50. Good news for hawks on the FOMC.

o   Currencies – USD outperformed the Euro, Pound & Yen. Pound had a very bad day.

o   Commodities – Crude oil closed higher while gold, copper, silver & wheat lost.

o   CDX IG: +0.50 to 75.63

o   CDX HY: +2.30 to 403.45

o   CDX EM: -0.65 to 233.06

*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 11 IG Corporate-only new issues was 18.18 bps.
  • BAML’s IG Master Index was unchanged at +143.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +138.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Global Fixed Income Research was unchanged at +189.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $15.3b on Friday versus $15.8b Thursday and $13.3b the previous Thursday.
  • The 10-DMA stands at $16.2b.

 

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

 

IG Corporate New Issuance This Week
10/03-10/07
vs. Current
WTD – $7.15b
October 2016 vs. Current
MTD – $7.15b
Low-End Avg. $17.35b 41.21% $87.83b 8.14%
Midpoint Avg. $18.54b 38.57% $88.59b 8.07%
High-End Avg. $19.74b 36.22% $89.35b 8.00%
The Low $15b 47.67% $75b 9.53%
The High $26b 27.50% $125b 5.72%

 

The PepsiCo Inc. $4.5b 6-part Deal Dashboard

 

PEPSI Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
Comparable Bid
Pre-Announcement
NICs
(bps)
Trading at
the Break
+/-
(bps)
3yr FXD +55-60 +50a (+/-5) +45 +45 <12.5> PEP 1.50% ’19 T+35 (G+42)
Curve adjusted = flat
0 44/43 <1>
3yr FRN 3mL+equiv 3mL+equiv 3mL+27 3mL+27 <12.5> PEP 1.50% ’19 T+35 (G+42)
Curve adjusted = flat
0 3mL+26/24 <1>
5yr FXD +65-70 +60a (+/-5) +55 +55 <12.5> PEP 3.00% ’21 T+54 (G+55) 0 54/53 <1>
5yr FRN 3mL+equiv 3mL+equiv 3mL+53 3mL+53 <12.5> PEP 3.00% ’21 T+54 (G+55) 0 3mL+52/51 <1>
10yr +90-95 +80a (+/-5) +75 +75 <17.5> PEP 2.85% ’26 (T+67/G+71) +4 74/73 <1>
30yr +130-135 +120a (+/-5) +115 +115 <17.5> PEP 4.45% ’46 (T+112) +3 114/ <1>

 

………and here’s a look at final book sizes and over-subscription rates:

 

ETR Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
3yr FXD 250mm 450m 1.8x
3yr FRN 750mm 1,950m 2.6x
5yr FXD 250mm 600mm 2.4x
5yr FRN 750mm 2,200m 2.93x
10yr 1,000m 3,250m 3.25x
30yr 1,500m 4mm 2.67x

 

Thank You’s Galore

 

Let’s see if you’ve been reading the “QC” with a simple test question – “Where does D&I start in corporate America?”  Correct good job!  The answer is it starts from the top down.  At PepsiCo, the world’s second largest food and beverage business that means India-born and naturalized American Chairperson and Chief Executive Officer Indra Nooyi.  It is from her office that Pepsi’s D&I initiative is carried, embraced and filtered through what is among the best-in-class Diversity and Inclusion mandates that we saw in action today, as evidenced by Mischler’s opportunity to demonstrate our capital markets capabilities and to work with PepsiCo’s Treasury/Funding Department.

Mischler sends off its five-star salute this evening to all of you with thanks not only for the privilege to be involved in your transaction, but for the active roll you enabled and supported us to participate with.  As a 1.00% active Co-Manager we were able to introduce nearly one quarter of a billion dollars in volume and 80 individual orders to Pepsi’s six-part order books.  By allocating Team Mischler we then see return business from our middle markets distribution network that executes Corporate, Agency, ABS/MBS, Rates and Municipal business among others.  The sustainable growth trajectory we are on, in turn, helps fund our “giving back and pay forward set asides”  so that we can apply our shared ethos to give back to our Veteran community.  This is a circular process, and it’s how we grow our business while giving back to veteran and service disabled veteran organizations – the root of our diversity certification.  So, thank you all at Team Pepsi from all of us here at Team Mischler for being great stewards for D&I and Veteran causes.

PepsiCo Inc debtA Look at Socially Responsible PepsiCo Inc.: Good and Better For You

But let me tell you a bit more about Pepsi D&I leadership roles. Pepsi’s Supplier Diversity mandate began over 30 years ago at the company and its annual spend is approximately $1.3 billion!  Also, internally, PepsiCo recognizes individuals within the company who are active supporters of diversity and inclusion in the workplace.  Two such honors are the Harvey C. Russell Inclusion Award to honor employees for their outstanding achievements in diversity and inclusion.  Most recently, 76 associates from Pepsi’s Global business were awarded.  Additionally, Pepsi offers the Global Steve Reinemund Diversity and Inclusion Leadership Award recognizing senior Pepsi staff members who model exemplary leadership and a commitment to diversity and inclusion.

Which brings me to PepsiCo’s incredible commitment to hire U.S. military veterans, an initiative that earned it a top 25 ranking for the second consecutive year in the G.I. Jobs ranking of Top 100 Military Friendly Employers in 2013.  Pepsi is the lone food and beverage company in the top 50 companies in that category.  Also in 2013, Pepsi’s online jobs clearinghouse named, Bright.com, secured the top ranking for Pepsi among Fortune 50 companies in “most veterans hired” as a percentage of its workforce.  How awesome is that folks?  For four consecutive years Pepsi’s recycling program provided $1.5million to support Entrepreneurship Bootcamp for Veterans or “EBV” that helps veterans build their own businesses to pursue their dreams. Those are just some of the ways Pepsi is giving back.

They gave the nation’s oldest SDVBE a chance again today to prove our muster and so, it’s our job and expectation to deliver the goods and in addition to extol the virtues and tell the stories of what Pepsi does to make this world a better, more socially responsible place; Pepsi is Good and Better For You!

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

 

NICs, Bid-to-Covers, Tenors and Sizes

 

…..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 four week’s averages:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
9/26
TUES.
9/27
WED.
9/28
TH.
9/29
FRI.
9.30
AVERAGES
WEEK 9/26
AVERAGES
WEEK 9/19
AVERAGES
WEEK 9/12
AVERAGES
WEEK 9/05
New Issue Concessions 2.50 bps N/A 5.69 bps 0 bps/flat N/A 2.71 bps 0.69 bps 4.66 bps 1.30 bps
Oversubscription Rates 3.71x N/.A 2.66x 4.12x N/A 3.52x 3.23x 3.47x 3.23x
Tenors 13.12 yrs 30 yrs 7.71 yrs 7.29 yrs N/A 10.51 yrs 9.36 yrs 11.28 yrs 9.42 yrs
Tranche Sizes $509mm $150mm $862mm $681mm N/A $646mm $964mm $710mm $719mm

 

New Issues Priced

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

For ratings I use the better two of Moody’s, S&P or Fitch.

 

IG

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
General Motors Finc’l. Co. BBB-/BBB- FRN 10/04/2019 250 3mL+equiv 3mL+equiv 3mL+127 3mL+127 BAML/BNPP/CITI/LLOY/MIZ
General Motors Finc’l. Co. BBB-/BBB- 2.35% 10/04/2019 750 +155a +145 the # +145 +145 BAML/BNPP/CITI/LLOY/MIZ
General Motors Finc’l. Co. BBB-/BBB- 4.00% 10/06/2026 750 +260a +245a (+/-5) +240 +240 BAML/BNPP/CITI/LLOY/MIZ
PepsiCo. Inc. A1/A FRN 10/04/2019 250 3mL+equiv 3mL+equiv 3mL+27 3mL+27 BAML/CITI/GS/MIZ
PepsiCo. Inc. A1/A 1.35% 10/04/2019 750 +55-60 +50a (+/-5) +45 +45 BAML/CITI/GS/MIZ
PepsiCo. Inc. A1/A FRN 10/06/2021 250 3mL+equiv 3mL+equiv 3mL+53 3mL+53 BAML/CITI/GS/MIZ
PepsiCo. Inc. A1/A 1.70% 10/06/2021 750 +65-70 +60a (+/-5) +55 +55 BAML/CITI/GS/MIZ
PepsiCo. Inc. A1/A 2.375% 10/06/2026 1,000 +90-95 +80a (+/-5) +75 +75 BAML/CITI/GS/MIZ
PepsiCo. Inc. A1/A 3.45% 10/06/2046 1,500 +130-135 +120a (+/-5) +115 +115 BAML/CITI/GS/MIZ
Xylem Inc. Baa2/BBB 3.25% 11/01/2026 500 +200a +170a (+/-5) +165 +165 CITI/WFS(a) JPM (p)
Xylem Inc. Baa2/BBB 4.375% 11/01/2046 400 +250a +215a (+/-5) +210 +210 CITI/WFS(a) JPM (p)

 

Indexes and New Issue Volume

 

Index Open Current Change
LUACOAS 1.38 1.38 0
IG27 75.132 75.232 0.10
HV27 176.145 175.005 <1.14>
VIX 13.29 13.57 0.28
S&P 2,168 2,161 <7>
DOW 18,308 18,253 <55>
 

USD

 

IG Corporates

 

USD

 

Total IG (+ SSA)

DAY: $7.15 bn DAY: $7.15 bn
WTD: $7.15 bn WTD: $7.15 bn
MTD: $7.15 bn MTD: $7.15 bn
YTD: $1,081.886 bn YTD: $1,366.37 bn

 

Lipper Report/Fund Flows – Week ending September 28th

     

  • For the week ended September 28th, Lipper U.S. Fund Flows reported an inflow of $2.334b into Corporate Investment Grade Funds (2016 YTD net inflow of $37.925b) and a net inflow of $2.011b into High Yield Funds (2016 YTD net inflow of $9.444b).
  • Over the same period, Lipper reported a net inflow of $480.7m into Loan Participation Funds (2016 YTD net outflow of $3.319b).
  • Emerging Market debt funds reported a net inflow of $209.7m (2016 YTD inflow of $6.549b).

 

IG Credit Spreads by Rating

The 10-day IG spread performance vs. the T10 across the ratings spectrum and how IG compared versus high yield:

Spreads across the four IG asset classes are an average 33.25 bps wider versus their post-Crisis lows!

 

ASSET CLASS 9/30 9/29 9/28 9/27 9/26 9/23 9/22 9/21 9/20 9/19 1-Day Change 10-Day Trend PC
low
IG Avg. 143 143 143 143 142 141 141 142 142 142 0 +1 106
“AAA” 84 84 84 84 83 82 82 83 83 83 0 +1 50
“AA” 87 87 87 86 86 85 85 86 85 85 0 +2 63
“A” 113 114 114 114 113 112 112 113 113 113 <1> 0 81
“BBB” 185 185 185 185 184 183 183 185 184 185 0 0 142
IG vs. HY 354 366 371 375 374 369 368 380 382 383 <12> <29> 228

IG Credit Spreads by Industry

…….and a snapshot of the major investment grade sector credit spreads for the past ten sessions:

Spreads across the major industry sectors are an average 38.95 bps wider versus their post-Crisis lows!

                                    

INDUSTRY 9/30 9/29 9/28 9/27 9/26 9/23 9/22 9/21 9/20 9/19 1-Day Change 10-Day Trend PC
low
Automotive 122 121 121 121 119 119 119 121 120 120 +1 +2 67
Banking 133 136 134 134 131 131 131 133 132 133 <3> 0 98
Basic Industry 186 187 187 187 187 186 186 188 189 189 <1> <3> 143
Cap Goods 106 107 105 106 105 104 104 104 104 104 <1> +2 84
Cons. Prod. 111 111 111 112 110 110 110 111 111 111 0 0 85
Energy 191 191 192 193 193 191 191 192 192 192 0 <1> 133
Financials 169 167 167 167 166 165 165 167 167 167 +2 +2 97
Healthcare 120 119 119 119 118 118 118 119 118 118 +1 +2 83
Industrials 144 144 144 145 143 143 143 144 144 144 0 0 109
Insurance 162 163 163 163 163 162 162 163 162 163 <1> <1> 120
Leisure 140 141 140 141 141 141 142 142 142 142 <1> <2> 115
Media 165 164 165 165 164 164 164 166 165 165 +1 0 113
Real Estate 153 151 151 151 151 151 151 151 151 150 +2 +3 112
Retail 119 119 119 119 118 118 119 120 119 120 0 <1> 92
Services 133 136 135 135 134 134 135 135 135 135 <3> <2> 120
Technology 121 124 124 124 123 123 123 124 124 124 <3> <3> 76
Telecom 163 165 165 165 162 162 162 164 164 164 <2> <1> 122
Transportation 141 138 138 139 139 138 139 139 139 139 +3 +2 109
Utility 141 142 141 141 140 140 140 141 140 141 <1> 0 104

  (more…)

GOOGL: The ABC’s of Successful Corporate Debt Issuance; Mischler Comment
August 2016      Debt Market Commentary, Recent Deals   

Quigley’s Corner 08.02.16- Alphabet Inc: ABC’s of a Successful Corporate Debt Issuance

 

Investment Grade Corporate Debt New Issue Re-Cap

Global Market Recap

IG Primary Market Talking Points: 

New Debt Issues Priced- Alphabet Inc (NASDAQ:GOOGL); Hershey Co (NYSE:HSY); Intl Paper (NYSE:IP); Mattel Inc (NASDAQ: MAT)

Lipper Report/Fund Flows

IG Secondary Trading Lab

Economic Data Releases
Rates Trading Lab

Investment Grade Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

 

9 IG Corporate issuers priced 12 tranches between them totaling $9b.  One AFDB tap for $250mm in the SSA space brought today’s all-in IG day totals to 10 issuers, 13 tranches and $9.25b.  What’s more astonishing, however, is that the first two days of August have already priced 53% of syndicate desk’s midpoint average forecast for IG Corporate new issuance for the entire month or $32.40b vs. $61.13bWTD we priced 23% above this week’s syndicate average estimate or $32.40b versus $26.22b.

             

Global Market Recap

 

  • JGB’s: 3 very poor days in a row.
  • S. Treasuries – USTs, Bunds & Gilts were led down by JGB’s (again).
  • 3mth Libor – Set at highest yield since May 2009 (0.76760%).
  • Stocks – Dow headed for 7th losing session in a row (3:30pm).
  • Overseas Stocks – Banks lead Europe lower. Nikkei down & Shanghai higher.
  • Economic – U.S. inflation data was low. EU PPI remained negative but improved.
  • Currencies – Bad day for the USD & DXY Index. Strong day for Yen & Pound.
  • Commodities – CRB & crude oil down (lows since April), gold well bid & wheat low since 2006.
  • CDX IG: +1.75 to 76.98
  • CDX HY: +7.95 to 418.20
  • CDX EM: +1.76 to 265.02

*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 12 IG Corporate new issues only was 16.17 bps.

 

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

 

IG Corporate New Issuance This Week
8/01-8/05
vs. Current
WTD – $32.40b
August 2016 vs. Current
MTD – $32.40b
Low-End Avg. $25.13b 128.93% $60.48b 53.57%
Midpoint Avg. $26.22b 123.57% $61.13b 53.00%
High-End Avg. $27.30b 118.68% $61.78b 52.44%
The Low $15b 216.00% $45b 72.00%
The High $45b 72.00% $75b 43.20%

alphabet-google-debt-issuance

Mischler Financial was happy to have been named an active Co-Manager for Alphabet Inc. today, parent company of Google among others.  The Aa2/AA issuer priced a new $2b 10-year Senior Notes offering that started price evolution with IPTs in the +80 “area” before tightening 10 bps into +70a (+/-2) guidance after which it launched and priced at the tightest side orT+68.  For fair value I looked at the outstanding GOOGL 3.375% due 2/25/2024 that was G+61.  Applying 10 bps for the 8s/10s curve gets you to T+71 fair value versus today’s T+68 final pricing inferring a new issue concession of negative 3 bps.   The final order book was $3.5b for a bid-to-cover or oversubscription rate of 1.75-times. Bonds were seen T+67 bid or 1 bp tighter closing the session.

What’s more today’s new Alphabet 10-year represents the fourth lowest ever IG-rated Corporate coupon in debt capital markets history!

Here’s a look at the top 4 low “A”-rated coupons:

 

  • Walt Disney 1.85% due 7/30/2026
  • IBM Credit $1bn 1.875% due 8/01/2022
  • Colgate $500mm 1.95% due 2/01/2023
  • Alphabet Inc. $2bn 1.998% due 8/15/2026

 

Thank yous go out to Alphabet’s Treasury/Funding team and for today’s achievement and opportunity.
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.

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 over the prior four weeks:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
8/01
AVERAGES
WEEK 7/25
AVERAGES
WEEK 7/18
AVERAGES
WEEK 7/11
AVERAGES
WEEK 7/04
New Issue Concessions 1.16 bps 1.23 bps 3.95 bps 0.82 bps 0.73 bps
Oversubscription Rates 2.48x 3.63x 3.42x 4.73x 3.82x
Tenors 15.70 yrs 13.45 yrs 7.95 yrs 9.58 yrs 9.72 yrs
Tranche Sizes $1,671mm $875mm $1,482mm $887mm $770mm

 

New Issues Priced

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

For ratings I use the better two of Moody’s, S&P or Fitch.

 

IG

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Alphabet Inc. Aa2/AA 1.998% 8/15/2026 2,000 +80a +70a (+/-2) +68 +68 JPM/MS(a) + 4 (p)
ENAP Baa3/BBB- 3.75% 8/05/2026 700 +high 200s
(+287.5)
+250a (+/-10) +240 +240 CITI/JPM
Hershey Company A1/A 2.30% 8/15/2026 500 +90a +85a (+/-5) +80 +80 BAML/CITI/JPM/RBC
Hershey Company A1/A 3.375% 8/15/2046 300 +120a +110a (+/-5) +110 +110 BAML/CITI/JPM/RBC
International Paper Baa2/BBB 3.00% 2/15/2027 1,100 +175a +155a (+/-5) +150 +150 DB/JPM (a) + 8 (p)
International Paper Baa2/BBB 4.40% 8/15/2047 1,200 +235a +215a (+/-5) +210 +210 DB/JPM (a) + 8 (p)
Mattel Inc. Baa1/BBB+ 2.35% 8/15/2021 350 +mid-100s
(+150a)
+135a (+/-5) +130 +130 BAML/CITI/MS/WFS
National Grid
Keyspan Gas East Corp.
A2/A- 2.742% 8/15/2026 700 +125a +120 the # +120 +120 BNY/CITI/HSBC/MUFG/TD
National Grid
Massachusetts Electric Co.
A3/A- 2.304% 8/15/2046 500 +160a +175a (+/-5) +170 +170 BNY/CITI/HSBC/MUFG/TD
Rabobank UA/NY Aa2/A+ FRN 8/09/2019 400 3mL+equiv 3mL+equiv 3mL+51 3mL51 BAML/BARC/MS/UBS
Rabobank UA/NY Aa2/A+ 1.375% 8/09/2019 1,000 +80a +72a (+/-2) +70 +70 BAML/BARC/MS/UBS
Weingarten Realty Inv. Baa1/BBB 3.25% 8/15/2026 250 +212.5 +185a (+/-2) +183 +183 BAML/JPM/REG/USB

 

SSA

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
African Development Bank
(tap) New total: $1,250mm
Aaa/AAA 1.00% 5/19/2019 250 MS+2a MS+2 MS+2 +19.3 BNPP/RBC

 

Lipper Report/Fund Flows – Week ending July 27th     

 

  • 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).
  • Over the same period, Lipper reported a net outflow of $15.422m from Loan Participation Funds (2016 YTD net outflow of $5.389b).
  • Emerging Market debt funds reported a net inflow of $1.382b (2016 YTD inflow of $3.717b).

 

IG Secondary Trading Lab

 

  • BAML’s IG Master Index was unchanged at +150.  +106 represents the post-Crisis low dating back to July 2007.
  • Standard & Poor’s Global Fixed Income Research widened 6 bps to +202 versus +196.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $13.9b on Friday versus $14.5b Thursday and $11.5b the previous Friday.

 

New Issue Volume

 

Index Open Current Change
IG26 75.231 76.833 1.602
HV26 202.90 206.915 4.015
VIX 12.44 13.37 0.93
S&P 2,170 2,157 <13>
DOW 18,404 18,313 <91>
 

USD

 

IG Corporates

 

USD

 

Total IG (+ SSA)

DAY: $9.00 bn DAY: $9.25 bn
WTD: $32.40 bn WTD: $32.65 bn
MTD: $32.40 bn MTD: $32.65 bn
YTD: $843.591 bn YTD: $1,077.377 bn

 

Economic Data Releases

 

TODAY’S ECONOMIC DATA PERIOD SURVEYED ESTIMATES ACTUAL NUMBER PRIOR NUMBER PRIOR REVISED
Personal Income June 0.3% 0.2% 0.2% —-
Personal Spending June 0.3% 0.4% 0.4% —-
Real Personal Spending June 0.2% 0.3% 0.3% 0.2%
PCE Deflator MoM June 0.2% 0.1% 0.2% —-
PCE Deflator YoY June 0.9% 0.9% 0.9% —-
PCE Core MoM June 0.1% 0.1% 0.2% —-
PCE Core YoY June 1.6% 1.6% 1.6% —-
ISM New York July —- 60.7 45.4 —-
Wards Domestic Vehicle Sales July 13.06m 13.77m 12.76m —-
Wards Total Vehicle Sales July 17.30m 17.77m 16.61m —-

 

Rates Trading Lab

 

Neutral day for TYU6s Monday with the flat Value Area.  Larger technicals remain constructive (see the chart in MP package and the Bull Trend Channel ) — note though,  this situation is highly dependent on the major 132-17 Support remaining intact.   The 132-17 level was Friday’s GDP launch level that started a huge 9-tic Buying Tail, it also sits near the lower boundary of the just mentioned Bull Trend Channel; a break here would do technical damage, and it would signify a loss of upside momentum.

-Steven Muchnikoff

 

UST Resistance/Support Table

 

CT3 CT5 CT7 CT10 CT30
RESISTANCE LEVEL 100-00+ 100-182 99-24 101-15 106-30
RESISTANCE LEVEL 99-31 100-16 99-21 101-10+ 106-08
RESISTANCE LEVEL 99-296 100-102 99-13+ 101-00 105-12
         
SUPPORT LEVEL 99-26 100-04 99-05 100-20+ 104-01
SUPPORT LEVEL 99-246 99-306 98-29+ 100-10+ 103-20
SUPPORT LEVEL 99-222 99-266 98-24+ 100-03 102-31

 

Tomorrow’s Calendar

 

  • S. Data: Jun PI/PS/PCE, Jul NY ISM, Aug IBD-TIPP, Jul Vehicles
  • Supply: Nothing Scheduled
  • Events: Nothing Scheduled
  • Speeches: Nothing Scheduled

(more…)

Corporate Debt Issuance: A Day of Optics
March 2016      Debt Market Commentary   

Quigley’s Corner 03.07.16- DCM Optics Indicate Underlying Strength…For Now

 

Investment Grade Corporate Debt New Issue Re-Cap

IG Primary Market Talking Points – Some Strong Optics from Today’s Deals

New Issues Priced

Lipper Report/Fund Flows

IG Secondary Trading Lab

Economic Data Releases

Rates Trading Lab

Investment Grade Credit Spreads (by Industry/Rating)

New Issue Pipeline

M&A Pipeline

 

9 IG Corporate issuers priced 13 tranches between them totaling $6.77b.  Assists came in the form of 2 SSA prints that added another $3.75b bringing the all-in IG day total to 11 issuers, 15 tranches and $10.52b.

IG Primary Market Talking Points – Some Strong Optics from Today’s Deals.

Today’s HY-rated Bank of America fixed-to-floating rate non-cumulative PerpNC10 Preferred Series “DD” was increased to $1b from $750mm.  The deal launched without guidance at 6.30% or 32.5 bps tighter than 6.625% “area” IPTs. Mischler Financial is proud to announce that it was named a Jr. Co-Manager on today’s Bank of America PerpNC10 fixed-to-floating rate $1,000 par non-cumulative preferred stock offering series “DD”.  We thank the entire crew up, down and sideways at Bank of America/ Merrill Lynch.  Thanks everyone! We greatly appreciate your patronage.

Perrigo Finance Unlimited Co. launched tighter than the tightest side of guidance which is a rarity.  The 5yr went from the +220a (+/-3) to launch at +210 while the 30yr went from +260a (+/-3) to +250.

Entergy Louisiana LLC upsized today’s tap of its 4.95% Secured Bonds due 1/15/2045 to $200mm from $100mm and launched it at the tightest side of guidance. The new deal total is now $450mm.

For the week ended March 2nd, Lipper U.S. Fund Flows reported an outflow of $761.406m from corporate investment grade funds (2016 YTD net outflow of $6.137bn) and a net inflow of $4.97bn from high yield funds (2016 YTD net inflow of $2.607bn).

The average spread compression from IPTs thru the launch/final pricing of today’s 13 IG Corporate-only new issues and one IG-rated Preferred was 20.85 bps.

 

Syndicate IG Corporate-only Volume Estimates for March

 

IG Corporate New Issuance March 2016 vs. Current
MTD – $40.445b
Low-End Avg. $115.59b 34.99%
Midpoint Avg. $116.13b 34.83%
High-End Avg. $116.67b 34.67%
The Low $100b 40.445%
The High $150b 26.96%

 

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…)

High Yield Debt Issuance Rules The Day-Mischler
February 2016      Debt Market Commentary   

Quigley’s Corner 02.04.16- High Yield Bond Issuance: Biggest Daily Volume in 3 Months

 

Investment Grade Corporate Debt New Issue Re-Cap –Praxair is Lone IG Corporate Issuer

Global Macro- Turkish-Syrian War Means War on the Doorstep for the EU

IG Primary Market Talking Points

New Issues Priced

Lipper Report/Fund Flows

IG Secondary Market Trade Lab

Rates Trading Lab

New Issue Pipeline

M&A Pipeline

Investment Grade Credit Spreads (by Industry/Rating)

 

The IG dollar primary markets suffered from further global market volatility with Praxair, the largest industrial gases company in North and South America the lone, issuer to price a deal.  The tally was meager with I deal totaling $250mm.  3 SSA prints contributed another $1.5b between them bringing the all0-in day total to 4 issuers, 4 tranches and $1.75b.  We have senior seasoned professionals here in our Mischler Stamford office, each with over 25 years of experience or more.  All say the same thing and mirror what you’re probably hearing as well – “I have never seen markets like this……EVER!” Another said, “2008 was pretty bad but this market is right there.” Still a third quipped, “I have never seen a market with more people having less conviction than now.  People just don’t know what to do.” Those are comments from a senior rates trader, a guy who spent most of his life covering Central Banks and a Structured Products wiz.  I spoke with a reporter this morning who wrote, “What can I say? I walk in with stocks +70 and 90 minutes later they’re down 50.  I thought we’d have a solid day of issuance but now, I’m not sure of anything.”

Of course, we are sure of one thing, the world is a confused mess.  This morning BOE Governor Mark Carney announced that the U.K.’s Monetary Policy Committee voted unanimously to hold rates at 0.50% citing an “unforgiving global environment and sustained financial market turbulence.” The BOE Governor cut forecasts yet again saying inflation will average 0.8% in 2016 crawling to 2.00% sometime in 2018.

After the BOE announcement, I spoke at length about our current market environment with a very reputable European account that I cover.  This person has been in the markets for over 30 years. Here’s what he shared – “I haven’t experienced markets like this and I’ve been in the business since 1981.  The biggest issues are that there are no longer buyers of last resort, cost of capital at banks is prohibitive, risk and compliance run today’s firms and regulators have made it impossible for anyone to make money.  There aren’t many prop desks around anymore either.  Bottom line is today’s markets have no stops; no one to say this has gone too far.”

 

Turkish-Syrian War Means War on the Doorstep for the EU

 

Days like these also pull other global event risks into focus. For example, in today’s early session Russia’s Defense Ministry spokesman Igor Konashenkov said, “We have reason to believe that Turkey is actively preparing for a military invasion of a sovereign state – the Syrian Arab Republic.  We’re detecting more and more signs of Turkish armed forces being engaged in covert preparations for direct military actions in Syria.”  Now THAT is something Europe does not want.  There is a reason why Turkey never gained EU membership.  Politicos can say what they will but Europeans do not want Turkey in the EU, which is already showing signs of coming undone. The EU in and of itself is a clash of different cultures, languages and histories let alone welcoming the gateway to Islam.  I know that may sound harsh at first read but it is true.  Turkey is the gateway to Islam; the bridge connecting Asia with Europe; the doorway through which a lot of trouble can manifest itself.  Simply put, the headline for a war between Turkey and Syria would read, “EU – War on the Doorstep.”  Of course this is all tempered by the fact that the Russian Defense Ministry is yet just another mouthpiece for former FSB agent Vlad-the-Terrible Putin.  Still, it’s more bad news the world doesn’t need.

 

Recap

 

USTs – Treasuries closed with small gains heading into the Employment Report.

Stocks – U.S. higher, Europe mixed, Nikkei red and China & Hang Seng rallied.

Economic – U.S. data continues to disappoint. U.S. Employment Report tomorrow.

Currencies – USD & DXY Index hit hard for the 2nd day in a row.

Commodities – Crude oil started bid but rolled over. Gold in rally mode.

CDX IG: +1.67 to 109.37

CDX HY: +7.12 to 529.43

CDX EM: -1.33 to 374.22

o   Swaps: 5yr thru 30yr spreads had a delayed reaction to the Tsy coupon cuts from yesterday

-Tony Farren

 

IG Primary Market Talking Points

 

Word to the wise – today was the highest volume day for High Yield new issuance in two months with three transactions printing a total of $2.49b.

Praxair Inc. (NYSE:PX) upsized a tap of today’s Senior Notes new issue to $275mm from $250mm which also launched and priced at the tightest side of guidance.

The average spread compression across today’s 1 IG Corporate-only new issues was 12 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 – $6.025b
February 2016 vs. Current
MTD – $6.025b
Low-End Avg. $23.75b $25.37% $90.9375b $6.63%
Midpoint Avg. $24.375b $24.72% $92.1875b $6.54%
High-End Avg. $25.00b $24.10% $93.4375b $6.45%
The Low $15b $40.17% $60b $10.04%
The High $35b $17.21% $110b $5.48%

 

 

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 Thursday’s session followed by the averages for the prior four weeks:

 

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
2/01
TUES.
2/02
WED.
2/03
TH.
2/04
LAST WEEK’S
AVERAGES
AVERAGES
Week 1/18
AVERAGES
Week 1/11
AVERAGES
Week 1/04
New Issue Concessions 10.5 bps 4.5 bps 7.67 bps 3 bps 21.77 bps 14.25 bps 12.66 bps 7.62 bps
Oversubscription Rates 4.35x 3x 2.74x 2x 2.71x 1.96x 2.39x 3.09x
Tenors 5 yrs 5 yrs 9.29 yrs 10 yrs 7.43 yrs 5.33 yrs 7.41 yrs 6.76 yrs
Tranche Sizes $500mm $400mm $621mm $275mm $940mm $1,235mm $1,901mm $866mm

 

New Issues Priced

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

Please note that for ratings I use the better two of Moody’s, S&P or Fitch.

 

IG

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Praxair Inc. (tap) A2/A 3.20% 1/30/2026 275 +120a +110a (+/-2) +108 +108 JPM/MIZ/WFS

                                                               

SSA

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
IBRD Aaa/AAA FRN 2/11/2021 500 3mL +28 3mL+28 3mL+28 3mL+28 BAML-sole
JFM A1/A+ 2.125% 2/12/2021 500 MS +95a MS +95a MS+95 +92 BARC/CITI/NOM

 

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 widened 2 bps to +208 versus +206.  +106 represents the post-Crisis low dating back to July 2007.

Standard & Poor’s Global Fixed Income Research widened 1 bp to +252 versus +251.  The +140 reached on July 30th 2014 represents the post-Crisis low.

Investment grade corporate bond trading posted a final Trace count of $18.3b on Wednesday versus $19.1b Tuesday and $17.9b the previous Wednesday.

The 10-DMA stands at $18.4b.

The top three most actively traded IG-rated issues were led by ABIBB 4.90% due 2/01/2046 that saw evenly weighted client flows account for 88% of the volume.

ABIBB 2.65% due 2/01/2021 finished second with two-way client and affiliate flows representing for 87% of the volume.

AIG 4.875% due 6/01/2022 placed third displaying 100% client flows and with sales outweighing purchases by a 3:2 margin.

 

New Issue Volume

 

Index Open Current Change  
IG25 107.695 109.574 1.879
HV25 360.50 356.175 4.325
VIX 21.65 21.84 0.19  
S&P 1,912 1,915 3
DOW 16,336 16,416 80  

 

USD IG Corporates USD Total IG (+ SSA)
DAY: $0.275 bn DAY: $1.275 bn
WTD: $6.025 bn WTD: $13.409 bn
MTD: $6.025 bn MTD: $13.409 bn
YTD: $133.009 bn YTD: $183.533 bn

 

Economic Data Releases

 

TODAY’S ECONOMIC DATA PERIOD SURVEYED ESTIMATES ACTUAL NUMBER PRIOR NUMBER PRIOR REVISED
Challenger Job Cuts YoY January —- 41.6% <27.6%> —-
Nonfarm Productivity Q4 <2.0%> <3.0%> 2.2% 2.1%
Unit Labor Costs Q4 4.3% 4.5% 1.8% 1.9%
Initial Jobless Claims Jan. 30 278k 285k 278k 277k
Continuing Claims Jan. 23 2240k 2255k 2268k 2273k
Bloomberg Consumer Comfort Jan. 31 —- 44.2 44.6 —-
Factory Orders December <2.8%> <2.9%> <0.2%> <0.7%>
Factory Orders Ex Trans December —- <0.8%> <0.3%> <0.7%>
Durable Goods Orders December <4.5%> <5.0%> <5.1%> —-
Durables Ex Transportation December —- <1.0%> <1.2%> —-
Cap Goods Orders Nondef Ex Air December —- <4.3%> <4.3%> —-
Cap Goods Ship Nondef Ex Air December —- 0.2% <0.2%> —-

 

Rates Trading Lab

 

Treasuries seem to have a bid on every back-up. Of course tomorrow’s number matters, but it will take a VERY strong number to get rates to rise significantly, and even if they do, there will likely be buyers. A weak number will only continue the trend we have seen and take tightening out of the picture altogether. That doesn’t mean we cannot correct, however. There have been lots of whispers pointing out the risks to weaker payroll numbers tomorrow. These include the weaker ISM Manufacturing employment component, claims data, Challenger job cuts, and the difference between “Jobs-Hard-to-Get” and “Jobs Plentiful,” which decreased to -0.6 in January vs. -0.3 December. I can’t tell you what’s going to happen, only that tomorrow will be a tough trading day. 10yr support comes in at 1.89, 1.95 and 1.98. 1.64 is the ultimate target for the bulls at the moment, but I’d be sure we will do a lot of work around 1.75 first. Interestingly, 1.88 is the 23.6% Fibonacci correction from 1.64 to 2.55 (see attached chart). We have also been holding true to technical levels in TY on an intra-day basis, so I will update those in the AM.

-Jim Levenson

 

UST Resistance/Support Table

 

CT3 CT5 CT7 CT10 CT30
RESISTANCE LEVEL 100-262 100-276 101-12 104-03 107-06
RESISTANCE LEVEL 100-24+ 100-24 101-07 103-25 106-30
RESISTANCE LEVEL 100-23+ 100-22 101-03+ 103-18+ 106-16
           
SUPPORT LEVEL 100-192 100-166 100-30 103-01 105-15+
SUPPORT LEVEL 100-17 100-13 100-26 102-23+ 104-16
SUPPORT LEVEL 100-15+ 100-102 100-22 102-16+ 104-01+

 

Tomorrow’s Calendar

 

China Data: Nothing Scheduled

Japan Data: Official Reserve Assets, Leading Index CI, Coincident Index

Australia: AiG Perf of Construction Index, Retail Sales,Foreign Reserves

EU Data: GE-Dec Man Ords

S. Data: Jan NFP, Dec Trade, Dec Cons Cred

Supply: Nothing Scheduled

Events: RBA Statement on Monetary Policy

Speeches: Mester tonight in NYC, Constancio, Nouy (more…)