Browsing articles tagged with "Mischler Financial Archives - Page 4 of 11 - Mischler Financial Group"
Economic Data Misses Mark; CBS Corp. Upsizes Debt Offering-Mischler Comment
June 2017      Debt Market Commentary   

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

 

Investment Grade New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and June

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

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

Indexes and New Issue Volume

Lipper Report / Fund Flows

IG Credit Spreads by Rating

IG Credit Spreads by Industry

Economic Data Releases

New Issue Pipeline

M&A Pipeline

Rates Trading Lab

Tomorrow’s Calendar

 

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

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

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

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

 

Today’s IG Primary & Secondary Market Talking Points

 

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

 

Global Market Recap

 

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

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
·           N. Korea continues missile tests with improving accuracy in defiance of protests in G-Zero world.
ELEVATED
BREXIT Fallout
·           U.K. PM May is on the hot seat but softer BREXIT talks are expected as a result. Macron-Merkel

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

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

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

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

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

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

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

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

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

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

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

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

MODERATE ·           Venezuelan civil unrest

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

against Russia in 98-2 vote.

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

·           China hard landing?

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

 

Syndicate IG Corporate-only Volume Estimates This Week and June

 

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

 

 

Have a great evening!

Ron Quigley, Managing Director and Head of Fixed Income Syndicate

 

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

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

 

…..and here’s another look at last week’s day-by-day re-cap of key primary market driver averages for IG Corporates only followed by the prior six week’s averages:

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

 

New Issues Priced

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

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

Municipal Debt Offerings Week of June 26-Eye On NYS Dormitory Authority PIT Bonds
June 2017      Muni Market   

Municipal Debt Offerings Week of 06-26-17 via Mischler Muni-bond Market Outlook looks back to last week’s metrics and provides a focused lens on pending muni debt deals scheduled for the upcoming week, with a special on NYS Dormitory Authority PIT Bonds.  As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $10.6 billion. This week volume is expected to be $6.8 billion. The negotiated market is led by $1.72 billion PIT bonds for the Dormitory Authority of the State of New York. The competitive market is led by $255.4 million for the Commonwealth Transportation Board, VA on Wednesday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image below

municipal debt offerings scheduled week 06-026-17

To illustrate our presence within the Debt Capital Markets space: since 2014 alone,  Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE) and a recognized minority broker-dealer. Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

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Investment Grade New Issue Re-Cap 06.13.17 – Mischler Financial
June 2017      Debt Market Commentary   

Quigley’s Corner 06.13.17- Investment Grade New Issue Re-Cap

 

Investment Grade Debt New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

Global Market Re-Cap

Syndicate IG Corporate-only Volume Estimates

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

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

Indexes and New Issue Volume

Lipper Report / Fund Flows

IG Credit Spreads by Rating

IG Credit Spreads by Industry

Economic Data Releases

New Issue Pipeline

M&A Pipeline

Rates Trading Lab

 

 

Investment Grade New Issue Re-Cap – Sessions in Session; S&P & DOW Close at All-Time Highs; Nasdaq Within One Point!

The morning session was subdued with only 4 Corporate issuers tapping our IG dollar DCM pricing 4 tranches for a total of $2.40b.  The SSA space saw 3 issuers print 3 tranches for an additional $2.843b thereby bringing the all-in IG day totals to 7 issuers, 7 tranches and $5.243b.

  • The IG Corporate WTD total is now 51.99% of this week’s syndicate midpoint average forecast or $11.35b vs. $21.83b.
  • MTD we’ve now priced more than 54.51% after just the first two days of June or $49.595b vs. $90.98b.
  • There are now 3 IG Corporate, Yankee and/or SSA new issues in the IG credit pipeline.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • The IADB upsized its 5-year Global FRNs new issue today to $600mm from a minimum $500mm at the launch.
  • Double “BB” rated HY asset class matched a new post credit low of +227.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 3 IG Corporate-only new issues, was <13.08> bps.
  • BAML’s IG Master Index tightened 1 bp to +118 versus +119.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.13.
  • Standard & Poor’s Investment Grade Composite Spread tightened 1 bp to +160 versus +161.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $13.2b on Monday versus $11.1b on Friday and $12.8b the previous Monday.
  • The 10-DMA stands at $15.4b.

 

Global Market Recap

 

  • U.S. Treasuries – closed mixed, little changed & with a flatter curve.
  • Overseas Bonds – JGB’s mixed. Gilts hit hard. Bunds down. Peripherals better bid.
  • 3mth Libor – Set at the highest yield (1.24556%) since March 2009.
  • Stocks – Solid gains for U.S. stocks led by the NASDAQ as of 3:30pm.
  • Overseas Stocks – Asia & Europe rallied except the Nikkei & FTSE (small losses).
  • Economic – PPI YoY 0.1% lower than last while core CPI YoY increased 0.2%.
  • Overseas Economic – Japan data weaker. U.K. CPI higher. EU & Germany ZEWs solid.
  • Currencies – USD mixed vs. the Big 5 & the DXY Index lost ground.
  • Commodities – The CRB hit its lowest level since April 2016. Crude oil improved.
  • CDX IG: -1.0 to 58.99
  • CDX HY: -1.86 to 321.27
  • CDX EM: -3.37 to 191.25

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
·           N. Korea continues missile tests with improving accuracy in defiance of protests in G-Zero world.
ELEVATED
BREXIT Fallout
·           U.K. PM May is on the hot seat but softer BREXIT talks are expected as a result.
CAUTION
“U.S. political gridlock”
Fed Balance Sheet
·           FOMC Rate Decision 2pm Wed. 6./14;  This week BOE, SNB & BOJ all expected to be unchanged.

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

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

·           Trump’s pulling U.S. from Paris Climate Accord perceived as ceding leadership in G-0 world.

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

·           Potential mid-term election loss to Dems in 11/2018 will impede any progress/GOP dissension.

·           U.S. partisan politics/gridlock/media bias against Trump/talk/tweet addiction and perjury.

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

·           Italian debt-to-GDP ratio is 133% and threatens EU economic improvements/Five Star movement

setback in municipal election defeats on June 11th. EU skeptic support may have peaked.

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

·           U.K. terror alert lowered to “Severe” vs. “Critical.” Attack “highly likely” vs. “imminent.”

MODERATE ·           Venezuelan civil unrest

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

·           China hard landing?

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

 

Syndicate IG Corporate-only Volume Estimates This Week and June

 

IG Corporate New Issuance This Week
6/12-6/16
vs. Current
WTD – $11.35b
June 2017
Forecasts
vs. Current
MTD – $49.595b
Low-End Avg. $21.00b 54.05% $90.04b 55.08%
Midpoint Avg. $21.83b 51.99% $90.98b 54.51%
High-End Avg. $22.67b 50.07% $91.92b 53.95%
The Low $15b 75.67% $75b 66.13%
The High $41b 27.68% $110b 45.09%

 

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

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Muni Market Eye on $800m American Dream Meadowlands Project-Mischler Municipal Debt Snapshot
June 2017      Muni Market   

Mischler Muni-bond Market Outlook for the week commencing 06.12.17 looks back to last week’s metrics and provides a lens focused on pending municipal debt deals scheduled for the upcoming week, including funding for the American Dream Meadowlands Project.  As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $6.5billion. This week volume is expected to be $6.0 billion. As noted above, the negotiated market is led by $800 million for the American Dream @ Meadowlands Project (NJ) issued by the Public Finance Authority (WI). The competitive market has no bond deals over $100 million with Ventura County, California leading the competitive charge with $150 million TRANs on Monday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image below
municipal-debt-calendar-june-12-2017-mischler

To illustrate our presence within the Debt Capital Markets space: since 2014 alone,  Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE) and a recognized minority broker-dealer. Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

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Municipal Debt Deals Scheduled Week June 5: LA County, Metro Washington Airports
June 2017      Muni Market   

Mischler Muni-bond Market Outlook for the week commencing 06.05.17 looks back to last week’s metrics and provides a lens focused on pending municipal debt deals scheduled for the upcoming week.  Muni bond inflows increased last week, supported by a risk-on view toward intermediate maturities within the municipal debt market. As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $3.3billion. This week volume is expected to be $7.8 billion. The negotiated market is led by $800 million TRANs for the County of Los Angeles, California and $533 million AMT bonds for Metropolitan Washington Airports Authority. The competitive market is led by $624.3 million for Clark County School District, Nevada in 2 bids on Thursday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image below

mischler municipal bond outlook june 05 2017

To illustrate our presence within the Debt Capital Markets space: since 2014 alone,  Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE) and a recognized minority broker-dealer. Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

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Equity Markets Blink, But Remain Resilient-What’s Next? Peruzzi’s Perch Memorial Day Edition
May 2017      Equities Market Commentary   

Peruzzi’s Perch-May 26 2017-Memorial Day Edition: Equity Markets Blink But Remain Resilient In Wake of More Presidential Drama

Just when the markets looked ready to crack, along came President Trump’s first overseas trip. The trip to the Middle East and Europe came at the perfect time as it took market focus off of the administration’s follies and back on the economic fundamentals.

larry-peruzzi-mischler-equitiies

Larry Peruzzi, Managing Director

The FOMC minutes from the May 2-3 meeting on Wednesday showed that the FED seems to be on pace for a June 14 rate hike. The FED dismissed 1Q slower growth and felt that higher broader growth is on the horizon. While the probability a June hike slightly diminished after the release, by week’s end markets had priced in a 92% chance of a 25 bps hike.

The week also saw some retailing firms release earning, and on a whole, traditional retailers continue to lose market share but investors were encouraged by pockets of strength in a few names such as Best Buy (NYSE:BBY),  Home Depot (NYSE:HD), and of course, Amazon (NASDAQ:AMZN).

Crude oil’s 2 week rally rolled over as OPEC’s production cuts were seen as being insufficient. Last Saturday’s news that The United States sealed a multibillion arms deal with Saudi Arabia helped lift defense stocks such as Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD) and Boeing (NYSE:BA) to all-time highs’. On the negative side, ISIS seemed to hit new lows in Manchester England and President Trump gave us some awkward moments at the NATO meeting on Thursday; neither was enough to keep the S&P 500 and NASDAQ from hitting new all-time highs. We continue to see institutional money flow into the market, but we also saw an uptick in retail flows entering the market. Overseas the U.K pond hit monthly low versus the Euro and U.S dollar on uncertain election polling numbers and Brazil’s bribery/ Presidential drama continues to amaze us.

Looking ahead to next week, a fair amount of data will be compressed into 4 days due to Monday’s Memorial Day holiday. April Personal Income and Spending, as well as May Conference Board consumer confidence on Tuesday gives us some insight onto the consumer sentiment and strength, while Dallas Fed manufacturing on Tuesday, Chicago Purchasing on Wednesday and May ISM manufacturing data on Thursday  will shed some light on manufacturing activity and health.

The highlight of the week will be on Friday with the release of May’s employment report. The FED has repeatedly stated that the largest factor in determining future rate hikes is the Payrolls numbers. With the long weekend and the Jobs report on Friday (providing we do not see any major news out of Washington),  trading volume will be skewed to the end of the week.

This week we looked at total U.S exchange volume versus the VIX index. It confirmed our belief that spikes in the VIX (May 15 to May 18) provided more trading opportunities as limits and Stops got triggered, and thus trading volumes spiked. This week however, the VIX has dropped back below 10 and trading volumes dropped by approximately 15%. Fed governors William, Brainard, Kaplin , Powel and Harker speak during the week, but investors seem to be locked in on a June 14th hike so we expect little new data from the Fed until then.

With the mid-month sell off followed by the late moth recovery investors have had to digest a lot of data points in trying to determine if we are under or overvalued. The long weekend will be welcomed, but we should not lose sight as to the meaning of the day as we honor the brave men and women who made the ultimate sacrifice.

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Ph:   1-617-420-8472 | Cell: 1-617-997-6318

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans.  Larry’s experience  and best execution perspective stems from his sitting on ‘both sides of the aisle.’  For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Mischler End of Week Equities Market Commentary via Peruzzi’s Perch March 09 2017 end-of-week edition is distributed via email to institutional investment managers and Fortune Treasury clients of veteran-owned broker-dealer Mischler Financial Group, the investment industry’s oldest  minority broker-dealer owned and operated by Service-Disabled Veterans.

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group

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Mischler Investment Grade Debt Market Commentary-Memorial Day 2017 Edition
May 2017      Debt Market Commentary   

“Quigley’s Corner” – Memorial Day 2017 Edition; Best & Brightest Sound Off re: Investment Grade Corporate Debt Forecast

mischler financial veteran-owned broker-dealer-memorial-day-2017

Investment Grade Debt New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and May

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

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

About Memorial Day

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

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

Indexes and New Issue Volume

Lipper Report / Fund Flows

IG Credit Spreads by Rating

IG Credit Spreads by Industry

Economic Data Releases

New Issue Pipeline

M&A Pipeline

Rates Trading Lab

 

A “thank you” goes out to all the 24 syndicate desk operatives who I polled this morning in the “QC” and who truly are the “Best and the Brightest” in our world of fixed income syndicate.  You see, SIFMA has declared today an early close ahead of Monday’s Memorial Day and as such we’re all looking to get out a bit ahead of the crowd so-to-speak.  They all complied and I have for your reading pleasure all 24 of those syndicate gurus patiently waiting below with their IG corporate new issue thoughts and forecasts not only for next week’s supply but for all of June as well.  So, sit back, relax and before your long weekend begins, get the data download as to what we expect for next week and month. After that enjoy this weekend with your families and please remember those sacrifices made by our nation’s men and women in uniform.  Please also take the time to read the Memorial Day piece above that says it all and the scroll below for General John A. Logan’s Memorial Day Order known as General Order No.11 May 5th, 1868 issued to honor our nation’s dead in the Civil War. It is the foundational starting point to our nation’s honoring our veterans on Memorial Day this Monday.

Thank you all! -RQ

 

Today’s IG Primary & Secondary Market Talking Points

 

  • BAML’s IG Master Index was unchanged at +118.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.13.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +161.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $17.2b on Thursday versus $19.7b on Wednesday and $15.2b the previous Thursday.
  • The 10-DMA stands at $16.9b.

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
·     ISIS attack in Manchester, U.K. kills 22 wounds 59/U.K. on highest terror alert – “CRITICAL”

·     N. Korea “deployment and mass production” of ballistic missiles that could reach Japan & Guam.

·     Increasing tensions between North Korea (pop: 24mm) & South Korea (pop: 44mm).

·     Dictator Kim Jong-Un increasingly belligerent./Political disruption in Pacific Rim.

ELEVATED
BREXIT Fallout
·     Pres. Trump labels terrorists “Losers”; urges unity of all faiths to destroy radical factions.

·     Contentious U.K./EU negotiations over BREXIT. U.K. threatens to abandon talks.

·     2nd Scottish independence referendum Fall 2018 or Spring 2019. Also support for a vote in Ireland.

CAUTION
“Trump Factor”
Fed Balance Sheet
·     Trump tax reform challenges & consensus GOP support to pass legislation questioned.

·     FBI Controversy over firing of Comey & Russia scandal.

·     Potential mid-term election loss to Dems in 11/2018 will impede any progress/GOP dissension.

·     U.S. partisan politics/gridlock/media war against Trump

·     China hard landing?/L-T Moody’s downgrade to A1 vs. Aa3; outlook to “stable” from “negative.”

·     Shrinking Fed balance sheet/weaker technicals/wider spreads/higher volatility 2H17.

MODERATE ·     Syria/Terrorism/Venezuelan civil unrest/Brazil’s scandal & new recession.

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

MARGINAL
2018 U.S. Recession
“QUITALY”
·    Highly fractious Italian political landscape. 64 governments in 72 Post WWII years.

·    Italy’s 5 Star Movement & EU skeptic parties have more influence than in other EU elections.

·    As Italian elections approach, EU risks increase significantly/Italian debt-to-GDP ratio is 133%.

·    A “QUITALY” referendum vote?

·    Chance of a 2018 U.S. recession.

 

Syndicate IG Corporate-only Volume Estimates This Week and May

 

IG Corporate New Issuance This Week
5/22-5/26
vs. Current
WTD – $39.20b
May 2017
Forecasts
vs. Current
MTD – $148.138b
Low-End Avg. $29.69b 132.03% $122.27b 121.16%
Midpoint Avg. $30.48b 128.61% $123.42b 120.03%
High-End Avg. $31.27b 125.36% $124.56b 118.93%
The Low $20b 196.00% $100b 148.138%
The High $40b 98.00% $150b 98.76

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

I am happy to announce that the “QC” once again received 100% unanimous participation from all 24 syndicate desks surveyed for today’s “Best & Brightest” edition!  19 of those participants are among 2017’s YTD top 21 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  23 are in the top 27 of that same table. The 2017 League table can be found on your terminals at “LEAG” + [GO] after which you select (US Investment Grade Corporates).  The participating desks represent 81.39% of all IG dollar-denominated new issue underwriting as of today’s table share percentage which simply means they’re the ones with visibility.   It’s a great look at the week ahead.

*Please note that these are Investment Grade Corporates only. They do not include SSA issuance unless otherwise noted. As always “thank you” to all the syndicate desks that participated in today’s survey. My weekly technical data re-cap and question posed to the “Best and the Brightest” early this morning was as follows:

To frame this week’s survey question, here are this week’s IG new issue volume talking points:

  • The IG Corporate WTD total finished over 128% above this week’s syndicate midpoint average forecast or $39.200b vs. $30.48b.
  • MTD we’ve now priced just over 120% of the syndicate projection for May or $148.138b vs. $123.42b.
  • The all-in MTD total (IG Corporates plus SSA) currently stands at $171.038b ranking this May as the 7th highest volume month of all-time and second largest of 2017 behind January’s #1 overall ranking at $227.283b.
  • As of today, the YTD IG Corporate-only volume is $624.514b vs. $602.869 on May 25th, 2016 or 3.59% more than a year ago.
  • The all-in or IG Corporate plus SSA YTD volume is $778.656b vs $791.618 on May 25th, 2016 or <1.64%> less than last the year ago total.

Here are this week’s five key primary market driver averages from the 48 IG Corporate-only deals that priced:

  • NICS:  <5.45> bps
  • Oversubscription Rates: 3.74x
  • Tenors:  11.37 years
  • Tranche Sizes: $817mm
  • Spread Compression from IPTs to the Launch: <20.05> bps

Here’s how this week’s performance data compares against last week’s:

  • Average NICs tightened dramatically by <6.69> bps to <5.45> bps vs. 1.24 bps.
  • Over subscription or bid-to-cover rates, the measure of demand, increased 0.54x to 3.74x vs. 3.20x. 
  • Average tenors extended by 2.68 years to 11.37 vs. 8.69 years.
  • Tranche sizes decreased by $114mm to $817mm vs. $931mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s 48 IG Corporate-only new issues tightened <2.24> bps to <20.05> bps vs. <17.81> bps.
  • Standard and Poor’s Investment Grade Composite Spreads tightened 1 bp to +161 vs. +162.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning was unchanged at 1.13. 
  • Week-on-week, BAML’s IG Master Index tightened 1 bp to +118 vs. +119. 
  • Spreads across the four IG asset classes widened 0.25 bps to 13.25 bps vs. 13.00 as measured against their post-Crisis lows. 
  • The 19 major industry sectors also tightened 0.68 bps to 16.58 vs. 17.26.
  • For the week ended May 24h, Lipper U.S. Fund Flows reported an inflow of $2.089b into Corporate Investment Grade Funds (2017 YTD net inflow of $57.067b) and a net outflow of $567.960m from High Yield Funds (2017 YTD net outflow of $6.008b).
  • The OIS forward market – the best measure of implied probability for a June rate hike – is 80%.
  • Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 54 deals that printed, 43 tightened versus NIP for a 79.50% improvement rate while 6 widened (11.00%) and 5 were flat (9.50%).

Entering today’s Friday’s session here’s how much we issued this week:

  • IG Corps: $39.20b
  • All-in IG (Corps + SSA): $49.70b

This week lived up to expectations and to within 3.50% of the highest estimate which was $40b.  The headliner was of course this week’s terrible suicide bombing in Manchester, U.K. targeting children at a concert leaving 22 killed, 59 wounded and the U.K. on its highest national terror alert – “CRITICAL.” Trump controversies (FBI/Russia) remained backstage as his first foreign tour took center stage. The takeaways were the Middle East trip with net positives in Saudi Arabia and Israel. Trump also challenged European leadership to pay their fair share as NATO members.  He was vocal about the war on terror, labeling terrorists “LOSERS” and emphasized the unity of all faiths particularly Christians, Jews and Muslims to “eradicate terrorists from our planet.” The OIS forward market – the best measure of implied probability for a June rate hike – is 80%. North Korea continued test firing missiles; China was downgraded to “A1” from Aa3” by Moody’s though placed on outlook “stable” from “negative”; Italian elections are the next big event coming to Europe with a possible “QUITALY” on tap as myriad political factions share one commonality – leaving the EU in a nation that has seen 72 post WWII governments in 72 years!; Italian debt to GDP is a staggering 133%; There are 5 IG Corporate or Yankee new issues in the pipeline that we know about.

Along those lines today’s once a month TWO-PART question is, “what are your thoughts and numbers for BOTH NEXT WEEK and JUNE IG Corporate new issue volume? Thank you in advance for your time and contribution! 

I hope my daily “QC” and these Friday data downloads are helpful and informative to you.  Without your input this “QC” survey can’t get done.  I truly appreciate your meaningful sound bites that bring your numbers and ranges to life. A LOT of issuers that your firm banks read this every day and they love it!  I consistently receive positive feedback about the “QC” from them directly.  So, you should know that you are personally contributing to a much bigger picture while also helping the nation’s oldest Service Disabled Veteran broker-dealer build in a more meaningful and sustainable way especially during this – our Memorial Day Monthly Pledge Drive in which we donate 10% of our firm’s profits to veteran and other worthy causes.

Thank you very much and have a great Memorial Day weekend! -Ron

 

The “Best and the Brightest” in Their Own Words

Responses from fixed income syndicate desks and bookrunners canvassed in this week’s poll is available exclusively to QC email distribution list members. To receive the QC, please contact Rob Karr, Managing Director, Head of Capital Markets via rkarr@mischlerfinancial.com

 

 

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

 

  • Across the past ten years, all-in dollar-denominated IG Corporate plus SSA June new issuance averaged $84.61b.
  • Over the past five years, all-in IG June new issuance averaged $93.03b.
  • Over the past three years, all-in IG June issuance has averaged $113.65b.
  • The past three years, June IG Corporate only issuance averaged $98.37b.
  • June SSA issuance has averaged $15.27b across the last three years.

 

June
(Year)
All-in IG Issuance ($bn) IG Corps
only ($bn)
SSA
only ($bn)
2016 98.422 87.922 10.50
2015 111.906 97.156 14.75
2014 130.61 110.04 20.57
2013 42.19 40.24 1.95
2012 82.01 67.95 14.06
2011 51.24 31.33 19.91
2010 67.13 43.52 23.61
2009 119.77 64.29 55.48
2008 59.88 42.43 17.45
2007 83.00 63.07 19.93

*Note: includes TARP/TALF & FDIC insured issuance

 

About Memorial Day
mischler financial service-disabled veteran-owned broker-dealer
Memorial Day was the result of the Civil War with a strong desire to honor our nation’s dead. It was proclaimed by General John Logan commander of our U.S. National Army on May 30th, 1868.  New York was the first state to recognize Memorial Day in 1873. By 1890, all northern states recognized the Day.  The South refused to do so until after World War I when it was not solely to commemorate those lost in the Civil War. Memorial Day officially became a national holiday in 1971 thru an Act of Congress.

Here is how it all got started:

HEADQUARTERS GRAND ARMY OF THE REPUBLIC

General Orders No.11, WASHINGTON, D.C., May 5, 1868

 

  1. The 30th day of May, 1868, is designated for the purpose of strewing with flowers or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion, and whose bodies now lie in almost every city, village, and hamlet church-yard in the land. In this observance no form of ceremony is prescribed, but posts and comrades will in their own way arrange such fitting services and testimonials of respect as circumstances may permit.

We are organized, comrades, as our regulations tell us, for the purpose among other things, “of preserving and strengthening those kind and fraternal feelings which have bound together the soldiers, sailors, and marines who united to suppress the late rebellion.” What can aid more to assure this result than cherishing tenderly the memory of our heroic dead, who made their breasts a barricade between our country and its foes? Their soldier lives were the reveille of freedom to a race in chains, and their deaths the tattoo of rebellious tyranny in arms. We should guard their graves with sacred vigilance. All that the consecrated wealth and taste of the nation can add to their adornment and security is but a fitting tribute to the memory of her slain defenders. Let no wanton foot tread rudely on such hallowed grounds. Let pleasant paths invite the coming and going of reverent visitors and fond mourners. Let no vandalism of avarice or neglect, no ravages of time testify to the present or to the coming generations that we have forgotten as a people the cost of a free and undivided republic.

If other eyes grow dull, other hands slack, and other hearts cold in the solemn trust, ours shall keep it well as long as the light and warmth of life remain to us.

Let us, then, at the time appointed gather around their sacred remains and garland the passionless mounds above them with the choicest flowers of spring-time; let us raise above them the dear old flag they saved from hishonor; let us in this solemn presence renew our pledges to aid and assist those whom they have left among us a sacred charge upon a nation’s gratitude, the soldier’s and sailor’s widow and orphan.

  1. It is the purpose of the Commander-in-Chief to inaugurate this observance with the hope that it will be kept up from year to year, while a survivor of the war remains to honor the memory of his departed comrades. He earnestly desires the public press to lend its friendly aid in bringing to the notice of comrades in all parts of the country in time for simultaneous compliance therewith.
  2. Department commanders will use efforts to make this order effective.

By order of

JOHN A. LOGAN,
Commander-in-Chief

N.P. CHIPMAN,
Adjutant General

Official:
WM. T. COLLINS, A.A.G.

Remember our Veterans

mischler financial veteran-owned broker-dealer-memorial-day-2017

Never forget those who made the ultimate sacrifice so that we can all do what we do every day.

God Bless our nation’s veterans and their families; God Bless you and your families and God Bless America!

Have a safe and wonderful Memorial Day weekend everyone!
Ron Quigley

 

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

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

(more…)

A Tribute to Roger Moore’s AAA-Rated Bond; Mischler Debt Market Comment
May 2017      Debt Market Commentary   

Quigley’s Corner 05.23.17- Tribute to Roger Moore’s AAA-Rated Bond

Below is the opening extract from Quigley’s Corner aka “QC” Tuesday May 23, 2017  edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans.

Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, the QC is one of three distinctive market comment pieces produced by Mischler Financial Group. The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our fixed income trading and debt capital markets desk. The QC includes a comprehensive “deep dive” with optics on the day’s investment grade corporate debt new issuance and secondary market data encompassing among other items, comparables, investment grade credit spreads, new issue activity, secondary market most active issues, and upcoming pipeline. To receive Quigley’s Corner, please email: rkarr@mischlerfinancial.com or via phone 203.276.6646

Investment Grade New Issue Re-Cap:  Bonds, Bonds and Roger Moore’s AAA Rated Bond

Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

Syndicate IG Corporate-only Volume Estimates

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 May 17th         

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline – $216.2 Billion in Cumulative Enterprise Value

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

The vibrant IG primary DCM continued along its trajectory today with 9 IG Corporate issuers pricing 18 tranches between them totaling $13.325b.  The SSA space saw KfW boost the volume totals with a $5b 3-year for an all-in IG day total of 10 issuers, 19 tranches and $18.325b.

 

  • The IG Corporate WTD total is over 109% of this week’s syndicate midpoint average forecast or $33.40b vs. $30.48b.
  • MTD we’ve now priced more than 115% just above the IG Corporate mid-range syndicate projection for May or $142.338b vs. $123.42b.
  • There are now 6 IG Corporate, Yankee and/or SSA new issues in the IG credit pipeline.
  • The all-in IG Corporate plus SSA MTD total is now $159.738b.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • Great-West Lifeco upped its 30-year Senior Notes new issue to $700mm from $500mm at the launch and at the tightest side of guidance.
  • Public Storage increased its $25 PerpNC5 preferred new issue today to $250mm from $100mm.
  • Activision Blizzard Inc. its $1.2b 3-part 5-, 10- and 30-year Senior Notes new issue launch 5 bps tighter than the tightest side of guidance today on each of the three tranches.  A rarity among rarities and worth posting here..
  • DDR Corp. increased its 10-year Senior Notes new issue to $450mm from $300mm.
  • Ascension Health upsized the tap of its 3(a)(4) exempt 3.945% Senior Unsecured Notes due 11/15/2046 to $225mm vs. $220mm bringing the new total to $925mm.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 15 IG Corporate-only new issues, that displayed price evolution and excluding today’s $25 Perp NC5 Preferred was <21.73> bps.
  • The average spread compression including today’s $25 PerpNC5 Preferred was <21.00>.
  • BAML’s IG Master Index was unchanged at +118.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp +112 versus +113.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +161.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $16.4b on Monday versus $11.3b on Friday and $15.4b the previous Monday.
  • The 10-DMA stands at $17.1b.

 

Global Market Recap

 

  • U.S. Treasuries – 4th losing session in a row for the UST market.
  • Overseas Bonds – JGB’s better except the 5yr. Europe closed mixed.
  • Stocks – 4th winning session in a row for U.S. stocks
  • Overseas Stocks – Asia closed down while Europe rallied.
  • Economic – U.S. data was a mixed bag. FOMC Minutes tomorrow.
  • Overseas Economic – Japan data was mixed. Solid data in Europe except the U.K.
  • Currencies – USD traded very well during NY hours.
  • Commodities – CRB, natural gas, gold & wheat closed red while crude oil moved higher.
  • CDX IG: -0.29 to 61.91
  • CDX HY: -0.74 to 327.04
  • CDX EM: -3.89 to 193.37

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
·           N. Korea “deployment and mass production” of ballistic missiles that could reach Japan & Guam.

·           Increasing tensions between North Korea (pop: 24mm) & South Korea (pop: 44mm).

·           Dictator Kim Jong-Un increasingly belligerent and irreverent to international community.

·           Disruption of political landscape in the Pacific Rim.

ELEVATED
BREXIT Fallout/
Terror Event in U.K.
·           Suicide bombing in Manchester kills 22 wounding over 50. ISIS claimed responsibility.

·           Pres. Trump lashes out at terrorists; urges unity of people of all faiths to destroy radical factions.

·           Contentious U.K./EU negotiations over BREXIT. U.K. threatens to abandon talks.

·           2nd Scottish independence referendum Fall 2018 or Spring 2019. Also support for a vote in Ireland.

CAUTION
“Trump Factor”
·          Trump tax reform challenges & consensus GOP support to pass legislation questioned.

·          FBI Controversy over firing of Comey/Russia scandal?

·          Potential mid-term election loss to Dems in 11/2018 will impede any progress/GOP dissension.

·          U.S. partisan politics reach zenith combined with media war against Trump

·          Will the Donald be able to fulfill campaign promises & how long before his tax reform plan?

MODERATE
“Dysfunction Junction”
·          Syria/Terrorism/Venezuelan civil unrest/Brazil’s scandal & new recession.

·          Russia meddling in international elections/Russia in expansion mode

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

·         Highly fractious Italian political landscape. 64 governments in 72 Post WWII years.

·         Italy’s 5 Star Movement & EU skeptic parties have more influence than in other EU elections.

·         As Italian elections approach, EU risks increase significantly/Italian debt-to-GDP ratio is 133%.

·         A referendum vote could result in a “QUITALY”/Also, China hard landing

 

Syndicate IG Corporate-only Volume Estimates This Week and May

 

IG Corporate New Issuance This Week
5/22-5/26
vs. Current
WTD – $33.40b
May 2017
Forecasts
vs. Current
MTD – $142.338b
Low-End Avg. $29.69b 112.50% $122.27b 116.41%
Midpoint Avg. $30.48b 109.58% $123.42b 115.33%
High-End Avg. $31.27b 106.81% $124.56b 114.27%
The Low $20b 167.00% $100b 142.338%
The High $40b 83.50% $150b 94.89%

 

……….and Roger Moore,  the AAA Rated Bond

bond tribute roger moore AAA rated

 

 

The 25 Bond films have grossed a total of $7.1 billion in global box office receipts. It is estimated that half of the world’s population has seen a James Bond film. Ian Fleming’s 14 Bond books have sold over 100 million copies.  (I have read all them……twice!) So, it’s no wonder this USC film school graduate, long ago TV commercial film producer and film buff was bummed out this morning upon hearing of the passing of Sir Roger Moore at the age of 89 in Switzerland.  A private funeral will be held in Monaco so Roger will be going out in true Bond style.

It was another act of violence, this time in Manchester, England last evening that kept many viewers transfixed to their televisions. Thoughts and prayers extended for the 22 killed, the 59 injured and their respective families, relatives and friends. What makes it so difficult to fathom such an act in our civilized society is that yesterday’s suicide bombing took the lives of so many young children who had just enjoyed a concert. Tragic. So, tragic.  What also gripped me last night was that as I watched, it became immediately noticeable how objective the news reporting was as I switched cable news channels during commercial breaks. The journalists and anchors did their job as live feeds came in and the story developed before our eyes.  It was a tragedy that took the lives of innocent people to get the media industry to report objectively (FINALLY!) and they each did a highly commendable job.  But it left me wanting more from them and not just in covering last evening’s story but in covering news – generally speaking – as it should be every single day.

Segue to this morning’s coverage of Israeli Prime Minister Benjamin Netanyahu’s speech and introduction of President Trump who then spoke eloquently about history, religion, and the war on terror.  The message was clear – Christians, Jews and Muslims alike should unite to aggressively confront threats to our civilization and to each of our religions so we can all enjoy living together in our increasingly diverse world.

 

In light of the harsh realities of our new world order and common fight against terror it’s no surprise then to realize that for 55 years dating back to Dr. No in 1962, people have found and embraced a universal James Bond, the super spy character created by Ian Fleming. We all need a ruthless hero in the form of a good guy who at times has to execute bad things for the greater good. When he empties a full revolver into his first onscreen kill in Doctor No, he quips, “That’s a Smith & Wesson, and you’ve had your six.”  In film we can appeal to our primordial instincts and Bond exits as hero each time the world traveler tracks down and kills society’s evil thugs.  One can get away with that in film.  Like relative value studies, it’s part art part science.  It’s film, but it’s portrayed by real living performers.  Bond is decisive and gets his job down each and every time. He kills people who deserve to die and, viewers all agree, they need to go.  Just like terrorists in today’s world. Roger Moore starred in a total of seven Bond epics and endeared himself throughout the world audience through his refreshing portrayal of the daring character he played.  Following on the heels of Sean Connery, Moore knew from his first Bond adventure, Live and Let Die, that he couldn’t be the former so he added amusing humor to the character in a very deadpan, witty and raffish way admired the around the world.

Bond does it with class, adventure, luxury and with the most gorgeous people by his side in the world’s most exotic locations.  He has taste, style, sophistication and oh that sense of humor. A good guy killer wrapped in a tuxedo. With his mission accomplished Bond always takes a sabbatical from work as a reward for saving society from domineering bad guys and terrorists. So, last night’s tragic evening segued into a somber and seriously Presidential speech this morning that then turned into the sad news of the passing of Sir Roger Moore who in his own right did so much in his retirement as UNICEF’s world Ambassador – which he always said was his life’s greatest achievement.  Even Bond gives back to society! We need Bond. We like when the good guy wins.  When we get the bad guy and do it with  style, with panache and in a raffish way, it’s feels even better.  That’s Illusion vs. reality unfortunately.  A lot of things coming together here at once.  The tragedy in Manchester, a President serious about eradicating terrorism and the wish that we had some savior to execute the mission, like James Bond – a fictitious character who was perhaps best portrayed by Roger Moore, who sadly passed away today.

Last Scene From The Spy Who Loved Me

Bond (Roger Moore) and Asamova (Barbara Bach) are discovered by their respective bosses making love in a life boat capsule at sea:

M: 007?
Russian General Gogol: Triple X!!
Minister of Defense: Bond! What do you think you’re doing?
Bond: Keeping the British end up, sir.

Have a great evening!
Ron Quigley

 

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

(more…)

Investment Grade Debt Commentary–Credit Tightening, Investor Appetite Voracious
May 2017      Debt Market Commentary   

Quigley’s Corner 05.12.17 – Credit Tightening, Investor Appetite Voracious

 

Investment Grade New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates This Week and May

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

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

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

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending May 10th         

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

 

What to do on a no-print Friday in the IG dollar DCM?  Well, how about speaking with the top 24 syndicate desks who underwrite over 80% of all debt issued in our market for starters?  I did just that as is done here in the “QC” each and every Friday.  Next week looks like a very robust one with sizeable upside potential. One syndicate guru noted we could see $40b next week and $150b for the month.  What your corner seer can tell you is that I wrote the following here in the “QC” on Friday April 28th, 2017:

“It’s a weary world folks! However, the good news is that U.S. Corporations are an anomaly. They’re doing just fine and foreign investment into the safe haven of” yieldier” investment grade rated products is immense and growing.  I expect a very robust May of $150-ish of all-in (IG Corporate plus SSA issuance).  Credit is grinding tighter and ……investor appetite is voracious……especially coming off such a noticeably slow April that ended on a high note. So, issuers line up!  Bankers man your stations and syndicate managers get ready because the best story in our world is Corporate America.”

The IG Corporate-only total for May is currently $72.638b and the all-in Corporate plus SSA total is $80.083b.  We have two solid weeks to go in May and if we repeat what we’ve done thus far – along with next week’s upside potential – I do think we hit $150b.  Now wouldn’t that be something…..AGAIN! But why listen to little ‘ole me when all those prestigious professionals manning their respective syndicate desks at the world’s biggest investment banks are patiently waiting for you to run through my recaps and move on to their numbers and thoughts for next week’s IG corporate issuance? They’re all there.  Hurry up and get to it because it’s Friday and people have places to go and people to see.

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

Ron Quigley, Managing Director and Head of Fixed Income Syndicate

 

Today’s IG Primary & Secondary Market Talking Points

 

  • BAML’s IG Master Index tightened 1 bp to +118 vs. +119.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 1.12 versus 1.13.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +161.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $17.9b on Thursday versus $19.8b on Wednesday and $17b the previous Thursday.
  • The 10-DMA stands at $16.9b.

 

Syndicate IG Corporate-only Volume Estimates This Week and May

 

IG Corporate New Issuance This Week
5/08-5/12
vs. Current
WTD – $33.67b
May 2017
Forecasts
vs. Current
MTD – $72.638b
Low-End Avg. $30.54b 110.25% $122.27b 59.41%
Midpoint Avg. $31.37b 107.33% $123.42b 58.85%
High-End Avg. $32.21b 104.53% $124.56b 58.32%
The Low $25b 134.68% $100b 72.63%
The High $41b 82.12% $150b 48.43%

 

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

I am happy to announce that the “QC” once again received 100% unanimous participation from all 24 syndicate desks surveyed for today’s “Best & Brightest” edition!  19 of those participants are among 2017’s YTD top 20 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  22 are in the top 25 of that same table. The 2017 League table can be found on your terminals at “LEAG” + [GO] after which you select (US Investment Grade Corporates).  The participating desks represent 81.91% 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.

*Please note that these are Investment Grade Corporates only. They do not include SSA issuance unless otherwise noted.

 As always “thank you” to all the syndicate desks that participated in today’s survey.  I greatly appreciate your time to contribute and for making this edition of the “QC” among the most widely read! You are helping to promote Mischler’s value-added DCM proposition while adding readership to the “QC” that won Wall Street Letter’s Award as Best Broker Dealer Research in our financial services industry for three consecutive years! That’s 2014, 2015 and 2016…

My weekly technical data re-cap and question posed to the “Best and the Brightest” early this morning was framed as follows:

 
Here are this week’s IG new issue volume talking points:

 

  • The IG Corporate WTD total is now over 10% above this week’s syndicate midpoint average forecast or $33.67b vs. $31.37b.
  • MTD we’ve priced more than 58% of the syndicate projection for May or $72.63b vs. $123.42b.
  • The all-in MTD total (IG Corporates plus SSA) currently stands at $80.038b.
  • This week we breached the half trillion dollar mark for YTD IG Corporate-only issuance.
  • The YTD IG Corporate only volume is now $515.42b which is 7.22% more than a year ago to date.
  • YTD we priced $687.656b of all-in IG Corporate and SSA issuance which is 2.84% more than last year’s total at this point.

Here are this week’s five key primary market driver averages from the 42 IG Corporate-only deals that priced: 

o   NICS:  <0.20> bps

o   Oversubscription Rates: 2.72x

o   Tenors:  8.66 years

o   Tranche Sizes: $802mm

o   Spread Compression from IPTs to the Launch: <19.51> bps


Here’s how this week’s performance data compares against last week’s: 

  • Average NICs widened 0.20 bps this week to <0.2). vs. <0.40>.
  • Over subscription or bid-to-cover rates, the measure of demand, decreased 1.07x to 2.72x vs. 3.79x. 
  • Average tenors dramatically contracted by 3.28 years to 8.66 years vs. 11.94 years.
  • Tranche sizes decreased by $16mm to $802mm vs. $818mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s 42 IG Corporate-only new issues tightened <1.87> bps to <19.51> bps vs. <17.64> bps.
  • Standard and Poor’s Investment Grade Composite Spreads tightened 1 bp to +161 vs. +162.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning tightened 3 bps to 1.12 vs. 1.15. 
  • Week-on-week, BAML’s IG Master Index tightened by 3 bps to +118 vs. +121. 
  • Spreads across the four IG asset classes tightened 3.00 bps to 12.25 vs. 15.25 bps as measured against their post-Crisis lows. 
  • The 19 major industry sectors also tightened by 2.53 bps to 16.79 bps vs. 19.32 bps against their post-Crisis lows.
  • For the week ended May 10th, Lipper U.S. Fund Flows reported an inflow of $2.701b into Corporate Investment Grade Funds (2017 YTD net inflow of $51.877b) and a net outflow of $1.725m from High Yield Funds (2017 YTD net outflow of $6.091b).
  • Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 46 deals that printed, 34 tightened versus NIP for a 74.00% improvement rate while 8 widened (17.50%) and 4 were flat (8.50%).

Entering today’s Friday’s session here’s how much we issued this week:

  • IG Corps: $33.67b
  • All-in IG (Corps + SSA): $39.42b

 

We’re in the midst of a Trump Slump. Former-FBI Chief Comey was fired by Trump despite the ongoing “From Russia With Love” investigation.  Russian Foreign Minister Lavrov is then invited into the Oval Office the next day while U.S. press is barred from the room. (Who will be sweeping the office for bugs and other devices?) You can’t make this stuff up folks.  There is a 100% chance of a June rate hike. North Korea continues to threaten its sixth nuclear test.  The French election is now behind us, but the new young President of Gaul has his hands full while Le Pen rebuilds, renames and rebrands her National Front Party with an eye on 2022.  The best story going, however, continues to be very strong U.S. corporate earnings as IG credit spreads grind tighter and tighter offering issuers great opportunities to print NOW!
 

The “Best and the Brightest” in Their Own Words

 

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

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Equities Market Commentary-A Goldilocks Market or a Teflon Market?; Peruzzi’s Perch
May 2017      Equities Market Commentary   

Peruzzi’s Perch Equities Market Commentary May 05 2017- VIX Messaging Goldilocks Market, Or a Teflon Market?

U.S markets close out a low volatility week with an important April jobs report on Friday. We seem to be in a Teflon market where both good and bad news alike just slide off the market. This either a Goldilocks market or a Teflon market.

larry-peruzzi-mischler-equitiies

Larry Peruzzi, Managing Director

The VIX index (good indication of volatility) hit a 10 year low on Monday at 10.11. In fact many have noted that the VIX trading curve looks very similar to 2007. In another indication of the low volatility the S&P 500 has not had a move of more than 20 bps over the last 7 sessions. Not that there has been a lack of new, quite the contrary between French elections, possible affordable health care plan overturned, North Korea, Apple hitting an all-time high, the Fed’s non actions and earnings investors have had plenty to digest. Q1 earning season is nearing an end with 78% of earnings reports beating forecast and 63% beating sales forecast. Wednesday the Fed decided not to raise rates and the statement was slightly more hawkish than we were expecting with the Fed suggesting it could still raise interest rates at its next meeting on June 14th.  Market expectations for a rate hike next month jumped to 75% from 60%, but much of this is contingent on a rebound in employment growth in April and May. Thursday was a great example of sector movements canceling each other out as financial stocks gained offsetting losses in telecom and energy shares as the price of crude oil fell below $45 a barrel. The question we all have is how long can this keep going?

Looking ahead to next week fist on the docket will be follow through to Friday’s job report and reaction both in Europe and the U.S to France’s presidential elections on Sunday. Polls indicate Emmanuel Macron has a 20 point lead on Marie LePen, but U.S and U.K voters are both well aware of how inaccurate polls can be lately. A Le Pen victory certainly would create some volatility, while Macron would be viewed as more of a status quo.

Cheap oil is coming back, with WTI crude at its lowest level in 13 months. We could see some continued pressure in the energy sector next week.  Keep an eye on Venezuela, a country that is nearly 100% dependent on oil revenue. Crude’s 2-year slide, as well as disastrous political decisions, has the country on the verge of collapse. This week’s EIA number added further importance. Japan will also return to work after three days of holidays.

Economic data is back loaded next week, with April PPI reading and jobless claims on Thursday and April CPI, April retail sales, Business inventories and Michigan sentiment closing out the week on Friday. Fed wise governors Bullard, Mester, Kashkari, Rosengren, Dudley, Evans, and Harker, all give speeches, but make no mistake about it; The Fed is looking at just 2 things: Jobs and inflation. Recently, both of those have not shown to be either hawkish or dovish. Washington will not be lacking any drama as the Senate GOP looks ready to overlook the House Obamacare repeal bill and write its own. If they find sometime a budget is needed to avoid another government shutdown later this year.  So call it a Goldilocks market or a Teflon market but until volatility returns brokers will continue to see low trading volumes. This will certainly result in lower earnings for the brokers in Q2.

 

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans.  Larry’s experience  and best execution perspective stems from his sitting on ‘both sides of the aisle.’  For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Mischler End of Week Equities Market Commentary via Peruzzi’s Perch March 09 2017 end-of-week edition is distributed via email to institutional investment managers and Fortune Treasury clients of veteran-owned broker-dealer Mischler Financial Group, the investment industry’s oldest  minority broker-dealer owned and operated by Service-Disabled Veterans.

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group (more…)