Browsing articles tagged with "New Issue Pipeline Archives - Mischler Financial Group"
Rate Hike Coming..Beige Book Talking Points-Mischler Debt Market Comment
March 2017      Debt Market Commentary   

Quigley’s Corner 03.01.17-Rate Hike IS Coming; Fed Beige Book Talking Points

 

Investment Grade New Issue Re-Cap – Dow Breaks 21,000 – Odds of March Rate Hike Rise From 40% to 80% in 3 Sessions!

IG Primary & Secondary Market Talking Points

Global Market Recap

The Federal Reserve Beige Book Talking Points – All You Need to Know

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

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 February 22nd    

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

7 IG Corporate issuers tapped the dollar DCM today pricing 12 tranches between them totaling $9.275b.  The SSA space hosted 2 issuers across 4 tranches including a $5b 3-part from the Sultanate of Oman that pumped up the all-in IG day totals to 9 issuers, 16 tranches and $14.625b. March has certainly started off on the right foot.
The WTD total is now 52% more than this week’s syndicate midpoint average forecast or $38.825b vs. $25.44b.
The all-in (IG Corporate plus SSA WTD volume total is now $51.425b.

Deregulation, cutting corporate taxes, focusing on American manufacturing and jobs while negotiating with America’s interests first and building a strong national defense equates to GROWTH.  Growth will cause rates to rise, rising rates will swell the stock market and bank stocks should get back to a semblance of their true values among many other things.
IG Primary & Secondary Market Talking Points

 

  • Mercury General Corp. upped its 10-year Senior Notes new issue to $375mm from $350mm at the launch and at the tightest side of guidance.
  • Telus Corp. increased its 10-year Senior Notes new issue to $500mm from $350mm at the launch.
  • Brixmor Operating Partnership LP upsized today’s 10-year Senior Notes new issue to $400mm from $300mm at the launch and at the tightest side of guidance.
  • The average spread from IPTs thru the launch/final pricing of today’s 12 IG Corporate-only new issues was <19.00> bps.
  • BAML’s IG Master Index tightened 1 bp to +121 vs. +122.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 1.15 vs. 1.16 setting yet another new tight since November 3rd, 2014.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +164.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $22.7b on Tuesday versus $15.8b on Monday and $17.8b the previous Tuesday.
  • The 10-DMA stands at $20b.

 

Global Market Recap

 

  • U.S. Treasuries – had a very difficult day thanks to the Fed Speak & President Trump.
  • Overseas Bonds – Europe hit hard with USTs and JGB’s also closed in the red.
  • 3mth Libor – Set at the highest yield (1.09278%) since April 2009.
  • Stocks – Big rally for U.S. stocks as S&P, Dow & NASDAQ traded at all-time highs.
  • Overseas Stocks – Very strong day for Europe & the Nikkei. China & HS with small gains.
  • Economic – Full U.S. calendar with some very good & not so good data.
  • Fed’s Beige Book at odds with the very hawkish Fed Speak this week.
  • Overseas Economic – The data in China, Japan & Europe overall was positive.
  • Currencies – Big rally for USD overnight & gave a little back during NY hours.
  • Commodities – CRB, copper & wheat were higher while crude oil & gold were lower.
  • CDX IG: -2.57 to 60.01 (trade at 59.856 the tightest since 2014)
  • CDX HY: -11.47 to 305.44
  • CDX EM: -7.51 to 213.30

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

-Tony Farren

 The Federal Reserve Beige Book Talking Points – All You Need to Know

 

  • Near-term business optimism eased since the last report.
  • Economy grew at a modest to moderate pace through mid-February.
  • Job market is tight amid little price pressure change.
  • There were a few districts that saw a pickup in wage growth.
  • Businesses expect prices to rise modestly in the months ahead.
  • Most Fed regions say prices were up modestly to moderately.
  • Some districts saw widening labor shortages.
  • Employment expanded moderately in most of the country.
  • Staffing firms saw a “brisk business for this time of year”.
  • Energy, home-building and house sales are all growing moderately.
  • Auto sales were up in most districts; tourism mostly stronger.
  • New York Fed prepared the Beige Book from early January to February 17th.

 

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 and Head of Fixed Income Syndicate (more…)

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…)

Corporate Bond New Issuance Elasticity: Get It While Its Hot
January 2017      Debt Market Commentary   

Quigley’s Corner 01.06.17 Weekend Edition: Investment Grade Corpoate Bond New Issuance & Spread Elasticity: Get It While It’s Hot

 

Investment Grade New Issue Re-Cap 

My Thoughts re: Next Week’s Issuance

IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates for January 

The Best and the Brightest” – Investment Grade New Issuance Forecasts 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

Lipper Report/Fund Flows – Week ending January 4th     

IG Credit Spreads by Rating / Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

 

It was a no-print Friday today and a well-deserved one at that considering yesterday was the 4th busiest ever in our dollar IG DCM. We priced $53.233b in new IG Corporate-only product this week in just three days and $65.233b including SSA issuance!  What a heck of a start to the New Year!  This morning’s NFP number was another very strong one posting a 156k payroll increase versus 175k estimates or 17% better than expected.  You know what that means…….with labor shortages expected throughout 2017, wages will increase and when wages increase people spend more money and when people spend more money the Fed is more likely to raise rates!  But let’s not get ahead of ourselves.  We have a big January 20th inauguration ahead of us that should make for great TV before Trump & Co. institute rapid change with a Republican controlled Beltway. But before that our U.S. six-pack big FIGs release earnings beginning on January 13th thru the 18th which leaves next week open prior to that deluge.  In speaking to the “Best and the Brightest” in the world of syndicate this morning it’s looking like we drop off a lot from this week but then again $30b, $35b, $40b speaks volumes about just how incredible this week was.  Allow me to opine therein and then let’s re-cap things first before I invite you all to join me as we visit with each of the top 23 syndicate desks in our IG dollar DCM to hear their thoughts, numbers and ranges for next week.

 

My Thoughts re: Next Week’s Issuance

Tuesday’s deals were tighter, and Wednesday’s deals were tighter BUT some widened while yesterday’s deals were 48% wider? What’s it mean? It means “get it while it’s hot,” and the hotter it gets, the more they compress spreads and the more they compress spreads the more likely they are to leak out. So, with the U.S. six-pack banks set to release earnings beginning on January 13th thru the 18th, we have a bit before that money center bank deluge happens. In the interim, next week will seem like a drop off in issuance but why wouldn’t it? We priced the 4th busiest day in history for both IG Corporate AND for IG Corporates and SSA yesterday ($53.233b and $65.233b respectively). By those standards any other week will pale in comparison. However, I believe things hold in and we get $40bn-plus of all-in Corp + SSA issuance next week. Call IG Corporates $35b.

 

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 67 deals that printed, 38 tightened versus NIP for a 56.50% improvement rate while 16 widened (24.00%) and 13 were flat (19.50%).
  • For the week ended January 4th, Lipper U.S. Fund Flows reported an inflow of $2.186b into Corporate Investment Grade Funds (2016 YTD net inflow of $2.186b) and a net inflow of $734.107 into High Yield Funds (2016 YTD net inflow of $734.107b).
  • The average spread compression from IPTs thru the launch/final pricing of today’s XX IG Corporate-only new issues was XX.XX bps.
  • BAML’s IG Master Index widened 1 bp to +129 vs. +128.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to +122 vs. +121.  The “LUACOAS” wide since 2012 is +215. The tight is +122.
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +167 vs. +166.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $22b on Thursday (7th highest day since 2006) versus $22.4b on Wednesday (6th highest volume day) and $4.1b the previous Thursday.
  • The 10-DMA stands at $9.6b.

 

Syndicate IG Corporate-only Volume Estimates for January 

 

IG Corporate New Issuance January 2017
Forecasts
vs. Current
MTD – $53.233b
Low-End Avg. $107.87b 49.35%
Midpoint Avg. $108.41b 49.10%
High-End Avg. $108.96b 48.86%
The Low $80b 66.54%
The High $145b 36.71%

 

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

I am happy to announce that, once again, the “QC” received unanimous responses from the 23 syndicate desks surveyed in today’s Best & Brightest poll.  22 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 23 participants finished in the top 25 of last year’s final IG Corporate Bloomberg league table.  The 2016 League table can be found on your terminals at “LEAG” + [GO] after which you select #201 (US Investment Grade Corporates).  The participating desks represent 81.59% 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 the third consecutive year! That’s 2014, 2015 and 2016 !!   

To best frame our weekly poll i.e.  projected new issue activity, we posed the following to our  Best & Brightest”respondents:

This week’s $53.233b of IG Corporate only new issue volume ranks as the 4th largest of all-time.

  • This week’s $65.233b of all-in (IG Corporate and SSA) issuance also ranks as the 4th highest of all-time. 
  • This week’s IG Corporate only volume total ($53.233b) represents just over 49% of the syndicate midpoint average forecast for all of January ($108.41) after only 3 sessions!  

Here are this week’s five IG Corporate-only key primary market driver averages after the close of yesterday’s: 

o   NICS:  2.25 bps

o   Oversubscription Rates: 2.45x

o   Tenors:  6.52 years

o   Tranche Sizes: $859mm

o   Spread Compression from IPTs to the Launch: <15.27> bps


Here’s the performance data comparing this week’s averages versus those of the week ending December 15th:

 

  • NICs widened 1.75 bps to 2.25 bps vs. <0.50> bps..
  • Over subscription or bid-to-cover rates increased marginally by 0.04x to 2.45x vs. 2.41x. 
  • Average tenors shortened dramatically by 4.15 years to 6.52 years vs. 10.67 years.
  • Tranche sizes increased noticeably by $151mm to $859mm vs. $708mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s 62 IG Corporate new issues widened by <1.90> bps to <15.27> vs. <17.17>.
  • Standard and Poor’s Investment Grade Composite Spreads tightened 2 bps to +167 vs. +169.
  • Week-on-week, BAML’s IG Master Index tightened 1 bp to +129 versus +130 on Thursday, December 15th
  • Spreads across the four IG asset classes tightened by 0.75 bps to 20.00 vs. 22.00 bps on Thursday, December 15th and as measured against their post-Crisis lows. 
  • Looking at the 19 major industry sectors, spreads tightened 1.57 bps to 26.32 vs. 27.89 on Thursday, December 15th, also against their post-Crisis lows.

 

……and now for the first time of 2017, I’d like to know your thoughts and your numbers for next week’s IG Corporate new issue volume. You all know that I greatly appreciate your participation week in and week out.
Thanks very much, Ron!

 

The “Best and the Brightest” in Their Own Words

 

……..……and here are their formidable responses: (more…)

Fed NOT Raising Rates-Mischler Debt Market Comment
September 2016      Debt Market Commentary   

Quigley’s Corner 09.15.16 Fed Not Raising Rates

 

Investment Grade Corporate Debt New Issue Re-Cap – IG Lotto:Corporate Volume Tops Weekly Syndicate Estimates

 Global Market Recap

All You Need to Know About Today’s Bank of England Meeting

IG Primary & Secondary Market Talking Points

Fixed Income Syndicate IG Corporate-only Volume Estimates for September

New Issues Priced

Lipper Report/Fund Flows

IG Corporate Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

 

Today’s winning lotto numbers are 11-16-945 as in 11 IG Corporate issuers, priced 16 tranches totaling $9.45b.  With that amount we have officially broken through this week’s syndicate midpoint average forecasts by over 7% or $39.745b vs. $36.91b. Notable today was that 4 issuers upsized their transactions from initial morning announcement sizes.

Remember what I wrote this past Monday folks (Check your “QC” dated 9/12/2016.  – “Look folks, the Fed is not raising rates this year.  Many sight December as the next hike but it’s not happening.” The world can barely stand on two feet let alone get economic engines back to growth mode.  Today’s numbers confirm that. With that, read my lips, or read my commentary, but the take-away is the same: Fed NOT Raising Rates (at least not anytime soon, nor with any degree of significance that would upend the current global financial market environment).

Global Market Recap

 

  • S. Treasuries – USTs closed mixed with steeper curve. 5/30’s has steepened 10 days in a row.
  • 3mth Libor – Set at its highest yield (0.85656%) since May 2009.
  • Stocks – US stocks with a strong rally. FTSE leads Europe higher. Nikkei had a bad day.
  • Economic – Very disappointing day on the U.S. economic front.
  • Currencies – USD mixed & little changed vs. Euro & PND but lost ground vs. Yen/CAD/AUD.
  • Commodities – Crude eked out a gain, heating oil higher & gold lost ground.
  • CDX IG: -3.0 to 74.31
  • CDX HY: -11.76 to 405.92
  • CDX EM: -5.58 to 255.94

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

-Tony Farren

 

All You Need to Know About Today’s Bank of England Meeting

 

  • BOE Sees chance of another rate cut this year but holds today at 0.25%; Vote 9-0.
  • BOE keeps gilt purchase plan at £435b; Vote 9-0.
  • Holds corporate bond plan at £10b; Vote 9-0.
  • Monetary Policy Committee Majority expect rate cut “if” August outlook is confirmed.
  • Initial impact of August stimulus is “encouraging.”
  • Some near-term indicators are “better than expected.”
  • Inflation reaching 2% target in first half of 2017.
  • Lower bound is close to but a bit above, zero.
  • Second half slowdown may be less severe than previously forecast.
  • Cannot infer from near-term about 2017 or 2018 projections.
  • MPC view of “contours of economic outlook” are unchanged.
  • Hawkish BOE members Forbes, McCafferty say extra gilt purchases still not warranted.

 

IG Primary & Secondary Market Talking Points

 

  • Kite Realty Group LP upsized today’s 10-year Senior Notes new issue to $300mm from $250mm at the launch and at the tightest side of guidance.
  • CCL Industries Inc. increased today’s 10-year Senior Notes new issue to $500mm from $400mm at the launch and at the tightest side of guidance.
  • Dairy Farmers of America Inc. bumped up its new $1,000 par PerpNC10 cumulative preferred securities, Series “C” new issue to $150mm from $100mm at the launch and at the tightest side of guidance.
  • Pitney Bowes Inc. boosted its 5-year Senior Notes new issue to $600mm from $400mm at the launch.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 16 IG Corporate-only new issues was 23.34 bps.
  • BAML’s IG Master Index widened 1 bp to +143 versus +142.  +106 represents the post-Crisis low dating back to July 2007.
  • Standard & Poor’s Global Fixed Income Research was unchanged at +191.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $17b on Wednesday versus $15.8b Tuesday and $16.5b the previous Wednesday.
  • The 10-DMA stands at $14b.

(more…)

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

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

 

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

Global Market Recap

IG Primary & Secondary Market Talking Points

New Issues Priced

Lipper Report/Fund Flows – Week ending September 7th

IG Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

 broken-record-ig-debt-mischler

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

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

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

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

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


Here’s how it looked:

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

 

Here’s a look at some other records:

 

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

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

 

Global Market Recap

 

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

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

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

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

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

o   CDX IG: +3.70 to 76.96

o   CDX HY: +16.91 to 413.84

o   CDX EM: +12.92 to 254.60

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

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

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

 

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

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

IG Corporate Debt Market Outlook In Advance of Labor Day
August 2016      Debt Market Commentary   

Quigley’s Corner 08.18.16-In Advance of Labor Day: IG Corporate Debt Issuers Should Err to the Upside

 

Investment Grade New Issue Re-Cap – It Ain’t Over ‘Til It’s Over!  Guess what?  It’s O-V-E-R!

IG Primary & Secondary Market Talking Points

“The Best and the Brightest”- Fixed Income Syndicate Outlook (Beyond Labor Day)

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

From Quig-litz to Stiglitz: Is There A Solution?  A Northern and Southern Euro!

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

Lipper Report/Fund Flows

Investment Grade Credit Spreads

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

 

Nothing…..zero..de nada!…Hasta la vista! The market is now officially in summer vacation mode folks.  Sure we might get some opportunistic issuers looking to get in ahead of the September rush, however, I was able to speak with all the major syndicate desks today.  My survey/poll was two-fold – to gauge volume forecasts for the remainder of August ($5.44b) and separately, for September issuance projections ($116.02b).  Several commented that the September tally is fluid because issuers are discussing pulling forward their issuance, so take it from me when I tell you to “err to the upside!”

September is traditionally a busy month (scroll down to my “Knowing the Past for the Future” section) as I take a look back at a decade’s worth of September IG issuance for each of IG Corporate, SSA and all-in volume.  The Fed mentioned the Italian banking crisis twice in their minutes yesterday.  The EU is coming undone. Vlad-the-Terrible Putin has a green card to annex Crimea and he will take full advantage of the fact that the EU cannot focus on him in their rearview mirror.  Putin knows this and he’ll take full advantage of it. The EU has too many troubles of its own.  We have a Presidential election on Tuesday, November 8th that could very well compress issuance from the standard stretch run to Thanksgiving (November 24th) by 12 days as a result.  When you err, err to the upside. 

IG Primary & Secondary Market Talking Points

 

  • Taking a look at the secondary trading performance of this week’s IG Corporate and SSA issues, of the 15 deals that printed, 12 tightened versus NIP for a 00% improvement rate while only 2 widened (13.33%) and 1 were trading flat (6.67%).
  • BAML’s IG Master Index tightened 1 bp to +142 versus +143.  +106 represents the post-Crisis low dating back to July 2007.
  • Standard & Poor’s Global Fixed Income Research tightened 1 bp to +191 versus  +192.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $16.9b on Wednesday versus $15.7b Tuesday and $15.6b the previous Wednesday.
  • The 10-DMA stands at $14.2b.

 

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

 

IG Corporate New Issuance This Week
8/15-8/19
vs. Current
WTD – $8.448b
August 2016 vs. Current
MTD – $95.45b
Low-End Avg. $12.78b 66.10% $60.48b 157.82%
Midpoint Avg. $14.09b 59.96% $61.13b 156.14%
High-End Avg. $15.39b 54.89% $61.78b 154.50%
The Low $5b 168.96% $45b 212.11%
The High $20b 42.24% $75b 127.27%

 

“The Best and the Brightest” –  Syndicate Forecasts and Sound Bites for the Remainder of August and September 

 

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.  20 of those participants are among 2016’s top 22 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  In fact, all of today’s 20 participants finished in the top 25 of last year’s final IG Corporate Bloomberg league table.  The 2016 League table can be found on your terminals at “LEAG” + [GO] after which you select #201 (US Investment Grade Corporates).  Today’s cumulative underwriting percentage of the participating desks was 80.29% 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.

 

Syndicate IG Corporate-only Volume Estimates for the Remainder of August & September

 

IG Corporate New Issuance Remainder of August
8/19-8/31
September 2016
Low-End Avg. $4.45b $115.45b
Midpoint Avg. $5.44b $116.02b
High-End Avg. $6.43b $116.59b
The Low $0b $80b
The High $15b $150b

 

A Look at How the Voting Brackets Broke-Out for the Remainder of August & September

Remainder of August September
1: 0b 1:80-85b
1: 1-2b 2: 100b
1: 2b 1: 105b
1: 2-3b 1: 100-110b
3: 0-5b 3: 110b
1: 3b 3: 115b
4: 5b 1: 110-120b
2: 5-7b 2: 120b
1: 5-7.5b 6: 125b
2: 5-10b 1: 130b
4: 10b 1:150b
1: 5-15b  

 

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

 

  • Across the past ten years, all-in dollar-denominated IG Corporate plus SSA September new issuance averaged $117.55b.
  • Over the past five years, all-in IG September new issuance averaged $138.49b.
  • Over the past three years, all-in IG September issuance has averaged $157.58b.
  • The past three years of September saw IG Corporate only issuance average $127.88b.
  • September SSA issuance has averaged $29.71b across the last three years.

 

August
(Year)
All-in IG Issuance (bn) IG Corps
only (bn)
SSA
only (bn)
2015 119.65 106.06 13.59
2014 160.96 124.25 36.71
2013 192.14 153.32 38.82
2012 143.74 124.62 19.12
2011 75.98 52.51 23.47
2010 130.14 112.41 17.73
2009 136.89 78.90 57.99
2008 29.89 17.58 12.31
2007 107.39 85.36 22.03
2006 78.73 61.41 17.32

Note: includes TARP/TALF & FDIC insured issuance

 

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

“Good morning and Happy Thursday is Friday for me! I will be taking my annual block leave beginning tomorrow morning and returning to my corner desk on Tuesday, September 6th.  It would seem summer vacations are now on the docket for the remainder of the month. August all-in IG Corporate plus SSA issuance managed to break thru the $100b mark for the first time in history.  We currently stand at $104.75b.  WTD issuance has dropped off measurably to $8.44b thus far for IG Corporate only prints. Before I leave there are over 3,000 readers of the “QC” interested in knowing your thoughts and numbers for the remainder of August as well as your projections for September issuance.


This week we priced $8.698b of all-in IG Corporate and SSA issuance. IG Corps were $8.448b or only 60% of this week’s syndicate midpoint average forecast calling for $14.09b.

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

 

  • NICS:  <4.27> bps
  • Oversubscription Rates: 4.26x
  • Tenors:  11.73 years
  • Tranche Sizes: $603mm

 

Week-on-week demand for IG corporate credit primary paper strengthened versus last week posting an average bid-to-cover rate of 4.26x vs. 3.56x.  Average NICs tightened 6.10 bps to an average negative <4.27> bps vs. last week’s +1.83 bps.  Average tranche sizes decreased to $603mm per issue vs. $735mm. Average tenors extended by an average 2.56 years to 11.73 years against last week’s 9.17 years.

Week-on-week, BAML’s IG Master Index is 3 bps tighter or +142 vs. last Friday’s +145 close.  Spreads across the four IG asset classes tightened 2.50 bps to 30.75 vs. 33.25. Looking at the 19 major industry sectors, spreads tightened 1.53 bps to an average 39.42 bps off their post-Crisis lows versus last Friday’s 40.95 bps close.               

Finally, what are YOUR thoughts and number for the remainder of August and separately for September IG issuance?

Thank you as always in advance.  Let’s give the readership a nice read to close out the summer and to prepare for the stretch run.
Best wishes to you and yours thru Labor Day! –Ron”

 

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

(Remainder of this section exclusive to distribution list recipients)

 

From Quig-litz to Stiglitz

This morning Bloomberg TV featured an interview with Columbia University economist and professor as well as Nobel laureate Joseph Stiglitz, who expressed his opinion that if the Euro Zone continues on its current dysfunctional path, it should split up! It’s gotten lots of air time, coverage and traction.  He referred to such a split as an “amicable divorce” with “two or three different currency zones.”  I watched it and had two comments to make.  The first was that Mr. Stiglitz looks like guitarist Joe Walsh might look when the latter turns 75 with a beard.  Then I found out that Stiglitz is 73 while Joe Walsh is 65.  I guess all those lost years kept Joe W. young at heart and with age.  Anyway, the other comment  I made was “hey I wrote about the EU splitting into two zones with two currencies a long time ago.”  I then went searching thru prior “QC’s to find it.  Here it is in its entirety written and distributed to you, if you were onboard the “QC” on January 27th, 2015 you’ll have on your desktops. (more…)

Corporate Debt Issuance Thermometer: Patients’ Resting; Mischler Comments
August 2016      Debt Market Commentary   

Quigley’s Corner 08.15.16 : Corporate Debt Issuance Thermometer

 

Investment Grade Corporate Bond New Issue Re-Cap

Global Market Recap

IG Primary & Secondary Market Talking Points

New Issues Priced

New Issue Volume

Lipper Report/Fund Flows – Week ending August 10th     

Economic Data Release

Rates Trading Lab

Investment Grade Credit Spreads (by Rating/Industry)

New Issue Pipeline

M&A Pipeline

Front-loaded!  FRONT-LOADED? The call was for a top heavy week to digest the bulk of light $14.09b in new supply.  Today however, as Bloomberg’s Bob Elson shared with me this morning, “in case you’re wondering, if it was a prime vacation period, here we are near 7:45 and 40% of the usual suspects are not signed on……..(to Bloomberg).”  Followed by “Big Drop in Issuance Is Expected.”  And so it was.

4 IG Corporate issuers priced 5 tranches between them totaling a mere $1.825b or just shy of 13% of this week’s syndicate midpoint average forecasts.  For that matter though, this month has gone down in the record books as the highest volume August for both IG Corporates and all-in (Corp + SSA) supply.

I am hearing a potentially record breaking stretch run from Post Labor Day thru Thanksgiving with the caveat that due to this year’s corporate-debt-issuance thermometer-Presidential Election on Tuesday, November 8th, we could potentially compress supply that would typically print into Thanksgiving week.  Issuers might pull issuance forward due to election uncertainties making for a very active and high volume period from September 6th thru November 8th.

Global Market Recap

o   U.S. Treasuries – USTs traded poorly as risk assets rallied.

o   Stocks – All-time highs reached for S&P’s, Dow & NASDAQ and Russia too.

o   Overseas Stocks – Europe mostly green, Nikkei red & China had a big rally.

o   Economic – U.S. data was mixed. U.K. data was weaker. Japan GDP was weaker.

o   Currencies – USD outperformed the Pound but lost vs. the Euro, Yen, CAD & AUD.

o   Commodities – Crude oil with another good day. Weaker USD helped commodities.

o   CDX IG: -1.03 to 70.57

o   CDX HY: -6.20 to 382.41

o   CDX EM: -4.74 to 236.38

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

-Tony Farren


IG Primary & Secondary Market Talking Points

 

  • Brixmor Operating Partnership LP upsized today’s 7-year Senior notes new issue to $500mm from $300mm at the launch and at the tightest side of guidance.
  • The average spread compression through price evolution of today’s 5 IG Corporate new issue was 25.80 bps.  It was a split-rated Murphy Oil. Evolution reflects to guidance only.
  • BAML’s IG Master Index was unchanged at +145.  +106 represents the post-Crisis low dating back to July 2007.
  • Standard & Poor’s Global Fixed Income Research was unchanged at +199.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $10.3b on Wednesday versus $14.6b Tuesday and $12.6b the previous Wednesday.
  • The 10-DMA stands at $14.6b.

 

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

 

IG Corporate New Issuance This Week
8/15-8/19
vs. Current
WTD – $1.825b
August 2016 vs. Current
MTD – $88.83b
Low-End Avg. $12.78b 14.28% $60.48b 146.87%
Midpoint Avg. $14.09b 12.95% $61.13b 145.31%
High-End Avg. $15.39b 11.86% $61.78b 143.78%
The Low $5b 36.50% $45b 197.40%
The High $20b 9.125% $75b 118.44%

 

 

Have a great evening!
Ron

 

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

This Week’s Investment Grade Corporate Debt Tone: Firm & Tight; Mischler Comment
August 2016      Debt Market Commentary   

Quigley’s Corner 08.05.16: Investment Grade Corporate Debt Tighter on The Bid Side

 

Investment Grade New Issue Re-Cap

IG Primary & Secondary Market Talking Points – Market Tone Very Firm; 86% of Week’s 50 New Issues Tighter on the Bid Side.

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

 New Issues Priced

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

Lipper Report/Fund Flows – Week ending August 3rd     

Investment Grade Credit Spreads (by Rating/Issuer)

IG Secondary Market Trade Lab

Economic Data Releases

Rates Trading Lab

New Issue Pipeline

M&A Pipeline

We wrap up a resounding week for IG new issuance.  The climate is ripe for continued success for companies looking to print now.  Sure, we’ll have the late August vacations to slow things down a bit before the ramp up to what should be a VERY busy run from September through Thanksgiving but August is NOT yet over.  This week we saw a total of 47 IG Corporate and 3 SSA issues price.  86% of them trended tighter versus their final pricing spread levels in this afternoon’s secondary trading market. That is what syndicate desks mean when they say, “the market is firm!” The syndicate midpoint average forecast for next week’s IG Corporate supply is $22.80b.  They ARE the best.  However, I will say that the trend in here is – without a doubt – to the upside. So would I be surprised to see $30b price?…..Not at all.  But what the heck, when I give YOU access every Friday to those 23 professionals who price your deals and who sit in the most highly pressurized job on Wall Street, why listen to just little ole me?  The Best & Brightest have spoken.  See their projections and read their words in their below weekly section.  And thank you to all 23 of them for accommodating my request for early responses.  At 54 years of age I am wrapping up a tough 66 hour work week are tough BUT it was well worth it.  The Quigley family thanks all 23 syndicate participants for letting me out a bit early today to travel with my family up to Vermont. The guy in the corner needs some R&R in the Green Mountain State this weekend.  We appreciate the patronage of all the issuers who offered us such meaningful roles in the past couple of weeks and ditto that to those lead managers who really gave new meaning to getting us involved on the distribution front. You all know who you are. Thanks to each and every one of you.

……………..I tell ya, the oldest Service Disabled Veteran broker-dealer keeps breaking new ground.  When you give us a chance  to prove our capital market capabilities, we are the Little Engine That Could.  Thanks for entrusting Mischler Financial, the financial industry’s oldest minority broker-dealer owned/operated by Service-Disabled Veterans on your deals.


IG Primary & Secondary Market Talking Points – Market Tone Very Firm with 86% of This Week’s 50 New Issues Tighter on the Bid Side.

firm-tight-tone-investment-grade-debt

 

  • The average spread compression from IPTs thru the launch/final pricing of today’s 1 IG Corporate new issue was 15.00 bps.
  • BAML’s IG Master Index was unchanged at +151.  +106 represents the post-Crisis low dating back to July 2007.
  • Standard & Poor’s Global Fixed Income Research widened 4 bps to +203 versus +199.  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 Wednesday versus $17.8b Thursday and $14.5b the previous Thursday.
  • Taking a look at the secondary trading performance of this week’s IG Corporate and SSA issues, of the 50 deals that printed, 43 tightened versus NIP for a 00% improvement rate while only 6 widened (12.00%) and 1 was not available or N/A (2.00%).
  • For the week ended August 3rd, Lipper U.S. Fund Flows reported an inflow of $2.472b into Corporate Investment Grade Funds (2016 YTD net inflow of $23.27b) and a net outflow of $2.464b into High Yield Funds (2016 YTD net inflow of $7.232b).

 

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

 

IG Corporate New Issuance This Week
8/01-8/05
vs. Current
WTD – $48.95b
August 2016 vs. Current
MTD – $48.95b
Low-End Avg. $25.13b 194.79% $60.48b 80.94%
Midpoint Avg. $26.22b 186.69% $61.13b 80.07%
High-End Avg. $27.30b 179.30% $61.78b 79.23%
The Low $15b 326.33% $45b 108.78%
The High $45b 108.78% $75b 65.27%

 

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

 

I am happy to announce that, once again, the “QC” received unanimous responses from the 23 syndicate desks surveyed in today’s Best & Brightest poll.  21 of those participants are among 2016’s top 22 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  In fact, all of today’s 23 participants finished in the top 25 of last year’s final IG Corporate Bloomberg league table.  The 2016 League table can be found on your terminals at “LEAG” + [GO] after which you select #201 (US Investment Grade Corporates).  Today’s cumulative underwriting percentage of the participating desks was 80.95% 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 Corporate Debt 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 the third consecutive year! That’s 2014, 2015 and 2016 !!  More importantly, however, you’re helping the nation’s oldest Service Disabled Veteran broker-dealer grow in a more meaningful and sustainable way.  So, thank you all! -RQ

 

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

 

“Good morning and TGIF!  So, payrolls bounced, wages soared and the domestic labor market seems to be improving.  The BOE yesterday cut its benchmark rate 0.25%. But there’s “chatter” out there that the BOE might extend its sterling bond purchases to include “other currencies.”  This in lieu of Carney’s statement that he is “adverse to negative rates” and “helicopter money.” Could USD denominated bonds be on the BOE’s shopping list?  Today’s U.S. numbers were really good but in the grand scheme of things, as they saying goes, the world is “going deeper into the rabbit hole.”


This week we priced $50.65b of all-in IG Corporate and SSA issuance. IG Corps were $48.65b which eclipsed this week’s syndicate midpoint average forecast of $26.22b by 85.55%. We also beat the high estimate of $45b this week by 8%.

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

 

  • NICS:  3.17 bps
  • Oversubscription Rates: 2.86x
  • Tenors:  11.57 years
  • Tranche Sizes: $1,020mm

 

Week-on-week demand for IG corporate credit primary paper was off against last week but remained strong posting an average bid-to-cover rate of 2.86x vs. 3.63x. Average NICs widened by 1.94 bps to an average 3.17 bps versus last week’s 1.23 bps.  Average tranche sizes increased thanks to the large multi-tranche deal from MSFT, to $1,020mm versus $875mm last week.  Average tenors decreased to 11.57 years versus last week’s 13.95 years but still over the 10.  For the week ended August 3rd, Lipper U.S. Fund Flows reported an inflow of $2.472b into Corporate Investment Grade Funds (2016 YTD net inflow of $23.27b) and a net outflow of $2.464b into High Yield Funds (2016 YTD net inflow of $7.232b).

Week-on-week, BAML’s IG Master Index is 1 bps wider or +151 vs. last Friday’s +150 close.  Spreads across the four IG asset classes widened 1.75 bps to 37.75 vs. 36.00. Looking at the 19 major industry sectors, spreads widened 1.63 bps to an average 46.84 bps off their post-Crisis lows versus 45.21 bps versus last Friday’s close.               

Finally, what are your thoughts and number or range for next week’s IG Corporate issuance?  Thoughts mean a lot and are always welcome and appreciated!

……..……and here are their formidable responses: (more…)