Browsing articles tagged with "veteran-owned brokerdealer Archives - Mischler Financial Group"
Muni Bond New Issuance First Week 2018: Demand Up, Supply Down
January 2018      Muni Market   

Muni Bond New Issuance Scheduled Week of Jan 02 2018  via Mischler Muni Market Update looks back to last week’s metrics and provides view towards municipal bond offerings scheduled for this holiday-shortened week.  Between two back-to-back holiday shortened weeks, the take-away for some is “demand for muni credits is up, but the number of offerings is down..” Good news: NJ Economic Development Authority is open for issuance (see below) As always, the Mischler Muni Market Outlook offers public finance investment managers, institutional investors focused on municipal debt and muni bond market participants a summary of the prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings tentatively scheduled for this week’s issuance.

Last week muni volume ended up at $1.2 billion. This week volume is expected to be about $757.4 million. The negotiated
market is led by $381.2 million of New Jersey Economic Development Authority State Lease Revenue Bonds. The competitive market does not have any deals over $50 million.

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-new-issuance-schedule

Since 2014 alone, minority broker-dealer Mischler Financial Group Inc.’s  presence across the primary Primary Debt Capital Markets (DCM) space has included underwriting roles in which 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 the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE).  Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

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Investment Grade US Corporate Debt Market Comment: Distilling DCM Data
September 2017      Debt Market Commentary   

Quigley’s Corner 09.22.17-Distilling the Week’s DCM Activity; Look Back to Learn, Look Forward to Window of Opportunity

 

Investment Grade US Corporate Debt New Issue Re-Cap –A Day for Donuts, Dissecting the New Issue Pipeline

Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

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

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 September 13th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

Investment Grade US Corporate Debt New Issue Recap

No IG issues printed today, however, it does not mean that nothing happened. In fact, something big happened!  The Best & Brightest all came back to me once again today in the “QC’s” most eagerly anticipated Friday edition.  That’s right they’re busy lining things up for next week and they’re taking just a little bit of time out to respond in their own words and with their own volume thoughts for next week’s IG Corporate new issue volume.  And you know what? ….They’re all here just waiting for you to scroll down below.  So, let’s get thru the recaps et al and then it’s onto the best and the brightest in the world of investment grade dollar syndicate. Thank you as always to those 24 desks and the very fine operatives on all of them for participating.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

  • The IG Corporate WTD total is 65.41% of this week’s syndicate midpoint average forecast or $17.876b vs. $27.33b.
  • MTD we’ve priced 99.02% of the syndicate forecast for September or $111.346b vs. $112.45b.
  • There are now 4 issuers in the IG credit pipeline

Today’s IG Primary & Secondary Market Talking Points

 

BAML’s IG Master Index was unchanged at +111. +106 represents the post-Crisis low dating back to July 2007.

Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.06.

Standard & Poor’s Investment Grade Composite Spread was unchanged at +154.  The +140 reached on July 30th 2014 represents the post-Crisis low.

Investment grade corporate bond trading posted a final Trace count of $17.5b on Thursday versus $18.8b on Wednesday and $20.2b the previous Thursday.

The 10-DMA stands at $17.1b.

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
North Korea
On 9/19 Trump spoke before UN referring to Kim as “Rocket Man on a suicide mission.” Says if Kim continues to threaten the U.S., allies and the world “we will have no choice but to totally destroy North Korea.” On 9/14 North Korea launched another ballistic missile over Northern Japan in the face of UN Security Council sanctions. Trump warned U.S. military options are “effective and overwhelming”. Missile traveled 2,300 miles landing in the Pacific. Guam is 2,131 from NOKO! On Sunday, 9/03 NOKO detonated a 100 kiloton hydrogen bomb 5-times more powerful than that dropped on Nagasaki causing a 6.3 magnitude earthquake according to the U.S. GS. Head of IAEA  said the hydrogen bomb test is a “new dimension of global threat” to the world. On Tuesday, 8/29 NOKO ICBM launched an ICBM over Japan that landed in the Pacific Ocean. On Monday, 9/04 U.S. Amb. to the UN, Nikki Haley said “the time has come to exhaust all diplomatic means to end this crisis.” Called for strongest sanctions vs. NOKO. Monday 8/31 began joint U.S. & SOKO military exercise the world’s largest computerized command controlled with over 80,000 troops. CIA Director Mike Pompeo says of NOKO “We’re not closer to war than a week ago, but we are closer than we were a decade ago.” Friday 8/11 Trump said “U.S. military solutions are in place, locked and loaded” matching his earlier “fire and fury” statement. On Th. 8/10 NOKO announced its plan to “pre-emptively strike Guam in mid-August.” Trump’s reaction, “Maybe my “fire and fury” threats weren’t strong enough!” N. Korea launched an ICBM on 7/28. NOKO’s Hwasong-14 missile can reach any location in U.S. U.S. sanctions against select Chinese banks to pressure PRC to influence NOKO failed. China insiders say PRC does not have influence with NOKO that the U.S. thinks it does. China in precarious position given South China Sea Islands. Asian allies now justified to build out their respective militaries.
ELEVATED
BREXIT Fallout
On July 28th Pakistani Prime Minister Nawaz Sharif was ousted for his role in a corruption scandal. He selected his brother Shahbaz to take over. The Brookings Institute calls Pakistan “the world’s most dangerous country.” Democracy in nuclear-armed country with 205m population at risk.

EU and Macron-Merkel coalition to squeeze U.K. for all it can re: BREXIT “divorce” bill. Companies prepping for hard BREXIT & 2 years of weak growth. PM May wants rolling series of meetings with EU.  UK withdrawal from EU takes place in March, 2019.

CAUTION
“U.S. political gridlock”
GOP to release tax overhaul plan week of Sept. 25th & Senate will vote on new Graham-Cassidy healthcare bill to repeal Obama Care. Infrastructure reform challenges & consensus GOP support to pass legislation still in doubt. Partisan politics. Trump recently bypassed GOP to close a deal w/Dems to extend debt limit to December.

Mueller’s continuing FBI probe into Trump.

GCC Crisis continues as Saudis, UAB, Egypt, Bahrain & 5 others cut diplomatic ties with Qatar; Land, air and sea blockade. Demands include closing its Al Jazeera network & a Turkish military base, severing ties w/Muslim Brotherhood, Hezbollah, al-Qaeda & ISIS.

September MTD Terror Stats: Despite destroying the Caliphate, ISIS is now scattered across a wider MENA region and Europe. There were 4 terrorist attacks thus far in September – that had 100 or more deaths – killing 615 people and wounding 733.

Cybercrime, ransomware, viruses & hacking are winning cyber wars. Recent attacks have hit four continents, law firms, food companies, power grids, pharma and governments.

Central banks shrinking balance sheets/higher volatility; low rates persist; slow inflation pick-up.

Venezuela – civil unrest continues against Maduro dictatorship. U.S. Tsy freezes Maduro family assets. Risk of VZ default.  4th largest exporter of oil to U.S. behind Canada (#1), Saudi Arabia (#2) & Mexico (#3).

MODERATE China hard landing: rising corporate debt & slower GDP growth are OECD and IMF concerns.
MARGINAL
2018 U.S. Recession
Fed signals 1 more rate hike in 2017; 3 in 2018. Dot plots unch for 2017 & ’18; lower for ’19 & longer-term. Hurricane’s Harvey, Irma and Maria not yet reflected in economic data; “could” push hike to 2018. $4.5 trillion b/s unwind begins in October & absence of inflation are concerns.

 

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

 

IG Corporate New Issuance This Week
9/18-9/22
vs. Current
WTD – $17.876b
September 2017 vs. Current
WTD – $111.346b
Low-End Avg. $26.29b 68.00% N/A N/A
Midpoint Avg. $27.33b 65.41% $112.45b 99.02%
High-End Avg. $28.375b 63.00% N/A N/A
The Low $20b 89.38% $100b 111.346%
The High $36b 49.66% $125b 89.08%

 

The Best and the Brightest” Syndicate Forecasts and Sound Bites for Next Week’s Investment Grade Corporate Debt

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!  Thank you to all of them. 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.  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 81.46% 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.

Here are this week’s primary market recap and data downloads:

Fed Chair Yellen continues to express concern about the absence of inflation that she’d like to see at 2%.  The FOMC tempts markets with accolades about the how low the unemployment rate is. Meanwhile, Wednesday’s eagerly anticipated $4.5 trillion QExit guidance amounted to nothing more than “we’ll start that in October!” Although the FOMC voiced there’d be one more rate hike in 2017 and 3 in 2018, the market doesn’t really believe that. The devastating hurricanes Harvey, Irma and Maria have not begun to show up in our economic data. I don’t believe we’ll see a rate hike in 2017.  Additionally, the next meeting in late October is not followed by a press conference so it’s highly unlikely that they’ll raise rates at that time. That leaves one meeting left in December. Do you think the Fed is giving out holiday gifts this year? I think not.  The S&P, Dow and Nasdaq once again reached new all-time highs this week.

Entering this morning’s Friday session –

 

  • The IG Corporate WTD total stands at $17.876b. We priced $9.454b less than this week’s average estimate of $27.33b or 65.41%.
  • MTD we have now priced 99.02% of the syndicate projection for September IG Corporates or $111.346b vs. $112.45b.
  • Entering today’s session, the YTD IG Corporate-only volume is $1,053.881b vs. $1,055.736b on September 22nd, 2016 or 0.18% less than a year ago.
  • The all-in or IG Corporate plus SSA YTD volume is $1,280.209b vs. $1,331.873b on September 22nd, 2016 or 4.04% less than the year ago total.
  • Entering this morning’s session, here are the five key primary market driver averages from the 37 IG Corporate-only deals that priced this week
  • NICS:  0.62 bps
  • Oversubscription Rates: 3.18x
  • Tenors: 8.21 years
  • Tranche Sizes: $483mm
  • Spread Compression from IPTs to the Launch: <18.40> bps

 

Here’s how this week’s critical primary market data compares against last week’s numbers entering this morning’s session:

 

  • Average NICs widened 0.78 bps to an average 0.62 bps vs. 1.40 bps across this week’s 37 IG Corporate-only new issues.
  • Over subscription or bid-to-cover rates, the measure of demand, decreased by 0.12-times to 3.18x vs. 3.30x.
  • Average tenors contracted by 1.63 years to an average 8.21 years vs. 9.84.
  • Tranche sizes decreased by $192mm to $483mm vs. $675mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s 37 IG Corporate-only new issues widened by 0.51 bps to <18.40> bps vs. <18.91>.
  • Standard and Poor’s Investment Grade Composite Spreads tightened 4 bps to +154 vs. +158 bps.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning tightened 4 bps to 1.06 vs. 1.10 bps.
  • Week-on-week, BAML’s IG Master Index tightened 5 bps to +111 vs. +115.
  • Spreads across the four IG asset classes tightened 3.5 bps to 7.50 bps vs. 11.00 bps as measured against their post-Crisis lows.
  • The 19 major industry sectors also tightened 3.58 bps to 11.95 vs. 15.53 bps also as measured against their post-Crisis lows.
  • For the week ended September 20th, Lipper U.S. Fund Flows reported an inflow of $2.858b into Corporate Investment Grade Funds (2017 YTD net inflow of $91.384b) and a net inflow of $865.832m into High Yield Funds (2017 YTD net outflow of $8.410b).
  • Taking a look at the secondary trading performance of this week’s 37 IG Corporate and 4 SSA new issues, of the 41 deals that printed, XX tightened versus NIP for a 75.50% improvement rate, 5 widened (12.25%) and 5 were flat (12.25%).

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

  • IG Corps: $17.876b
  • All-in IG (Corps + SSA): $23.389b

 

And now ladies and gentlemen, as honored members of the “B&B” Club it’s time for the guy-in-the corner to ask today’s question, “what are your thoughts and numbers for next week’s IG Corporate new issue volume?”

Thank you in advance for your time and contribution!

Have a great evening!

Ron Quigley, Managing Director, Head of Fixed Income Syndicate

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

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Boutique Investment Bank Mischler Financial Group Adds to Global Equities Execution Team
March 2017      Company News, Equities Market Commentary   

Former Goldman Sachs International Equities Trader + Best Ex Sales/Trader Enlist with Veteran-Owned Broker-Dealer Mischler Financial

Newport Beach CA and Stamford, CT– March 08—Mischler Financial Group (“MFG”), the veteran-owned  boutique investment bank and institutional brokerage announced the further expansion of the firm’s  agency-only equities execution team with the hire of two additional global trade execution specialists. With the new hires, minority-certified Mischler now boasts ten dedicated equities trading professionals specializing in US Domestic and International Equities whose respective pedigrees include both senior buy side and sell-side trading desk roles for globally recognized institutions.

The new members of the Mischler equities trading desk team include Matthew Horan, a 15-year securities industry veteran who joins Mischler from global investment bank Goldman Sachs, where he was VP International Equity Sales/Trading. Based in Goldman’s Taipei office for the last 3 years, Horan covers long-only and hedge fund accounts in the U.S., Hong Kong, and Singapore. Prior to Goldman Sachs, Mr. Horan was Senior Vice President Equity Sales/Trading for BNP Paribas Securities and worked from BNP’s Taipei office. Earlier in his career, Mr. Horan was the Pan Asia Equity Trader for The Boston Company Asset Management, one of the industry’s leading fund management firms.  Also joining Mischler is John Barone, a 25-year US equities trading market veteran who, prior to his role at Mischler, was Head of Equity Sales/Trading for agency brokerage Cheevers & Co. Earlier in his career, Mr. Barone was a Principal and Head of Equity Trading at William Blair & Company. He has also served as President of the Security Traders Association of Chicago and on the Board of Governors of the National Security Trader Association.

Matthew Horan will be based in Mischler’s Boston office, where the firm’s international equities execution team is overseen by Managing Director Larry Peruzzi. Mr.Barone will operate from Mischler’s Chicago trading desk and work with the firm’s Midwest area institutional clients.

Dean Chamberlain, Chief Executive of Mischler Financial Group stated, “We’re very happy to add two more formidable veterans to our global equities execution platform. Both Matt Horan and John Barone are uniquely talented equities execution specialists with long-standing relationships and deep fluency administering both high-tech and high-touch execution styles.” Added Chamberlain, “Of greater importance, the institutional clients that Matt and John have worked with over several decades can now benefit from our well-proven ability to deliver true best execution in both US domestic and international equities.”

About Mischler Financial Group

Established in 1994, Mischler Financial Group, Inc. (“Mischler”) is the oldest and largest minority-certified FINRA member firm owned and operated by military veterans. A federally certified Service Disabled Veterans Business Enterprise (SDVBE), Mischler is headquartered in Newport Beach, California, and operates 10 regional offices in major cities throughout the United States. The firm serves leading institutional fund managers, Fortune corporate treasurers, public plan sponsors, endowments, and foundations through its primary debt and equity capital markets practice areas and provides corporate share repurchase execution services and agency-only best execution services within the global equities and fixed income markets. In addition to new-issue underwriting and syndication within the US Equity and Debt capital markets, Mischler provides asset management for liquid and alternative investment strategies. The firm’s website is located at http://mischlerfinancial.com

 

For Additional Information:
Dean Chamberlain, CEO
Tel: 203.276.6646
Email: dchamberlain@mischlerfinancial.com

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Sell-Side FI Syndicate Desks Sound Off: New IG Debt Issuance Forecasts
February 2017      Debt Market Commentary   

Quigley’s Corner 02.03.17– Fixed Income Syndicate Seers Forecast Next Week’s New IG Debt Issuance

 

Investment Grade New Issue Re-Cap

IG Primary & Secondary Market Talking Points

Global Market Recap

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

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

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

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending January 25th     

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

 

It was a very welcome no print Friday today.  It gives me an opportunity on behalf of Team Mischler to thank Microsoft, AT&T and Apple for inviting us to serve this week on their multi-tranche transactions.  Thanks also to the leads who worked with us at HSBC – on Microsoft; Citigroup – on AT&T  and Goldman Sachs on Apple. All greatly appreciated!

But I know why you all checked in this evening – it’s to hear what the soothsayers of syndicate say about next week’s investment grade corporate new issue volume.  They all once again participated in my survey and their numbers and thoughts await you below.  Next week there is a lack of any earth shattering, market moving economic data and although Fed members will be speaking here and there it opens the door for further issuance.  Considering the very strong market tone that we’re going out with today in which 75% of this week’s IG Corporate new issues are tighter to MUCH tighter, I’d have to once again take the upside of forecasts.  But heck, we all know you want to hear from the top 23 under writers so, let’s first re-cap the day and then it’s on to the “Best and the Brightest” that syndicate has to offer. 

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 36 deals that printed, 27 tightened versus NIP for a 75.00% improvement rate while 6 widened (16.75%) and 3 were flat (8.25%).
  • For the week ended January 25th, Lipper U.S. Fund Flows reported an inflow of $2.657b into Corporate Investment Grade Funds (2016 YTD net inflow of $12.354b) and a net inflow of $412.595m into High Yield Funds (2016 YTD net inflow of $291.062m).
  • 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 1.21.  The “LUACOAS” wide since 2012 is +215.  +120 is the new tight.
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +166 vs. +165.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $22.5b on Thursday versus $21.6b on Wednesday and $21.2b the previous Thursday.
  • The 10-DMA stands at $20.5b.

 

Global Market Recap

  • U.S. Treasuries – Rallied after Employment then sold off hard on Trump regulation talk & Williams.
  • Overseas Bonds – Wild day for JGB’s. Core Europe better & balance struggled.
  • Stocks – Strong rally in the U.S. Europe closed higher & Asia lower.
  • Economic – U.S. Employment Report was mixed while the other data was solid.
  • Overseas Economic – China & Japan data weaker. Europe data was a mixed bag.
  • Currencies – USD traded better overnight than it did during the NY session.
  • Commodities – Crude oil small gain & gold small loss. Copper & natural gas were weak.
  • CDX IG: -1.55 to 63.99
  • CDX HY: -22.66 to 323.55
  • CDX EM: -3.93 to 226.36

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

-Tony Farren

 

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

 

IG Corporate New Issuance This Week
1/30-2/03
vs. Current
WTD – $44.575b
February 2017
Forecasts
vs. Current
MTD – $12.575b
Low-End Avg. $20.96b 212.67% $90.65b 13.87%
Midpoint Avg. $21.63b 206.08% $91.96b 13.67%
High-End Avg. $22.30b 199.89% $93.26b 12.48%
The Low $10b 445.75% $85b 14.79%
The High $27b 165.09% $120b 10.48%

 

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

 

The investment grade fixed income new issuance forecast question posed to the “Best and the Brightest” FI syndicate desk professionals early this morning was framed as follows:

Well, here’s what we did this week:

  • January 2017 broke the all-time, all-in monthly volume record $227.283b vs. $213.40b (May 2016).
  • WTD, we surpassed the syndicate midpoint average forecast with a 2.12x bid-to-cover rate or $44.575b vs. $21.63b. (206.08%!)
  • February MTD we priced over nearly 14%% of the syndicate forecasts in just two days $12.57b vs. $91.96b.
  • All-in YTD IG Corporate and SSA issuance stands at $242.358b which simply means we are on pace to price $2.644 Trillion in 2017!  HOOOAH. That won’t happen but it’s nice to put things in their proper perspective. 

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

  • NICS:  <0.87> bps
  • Oversubscription Rates: 3.12x
  • Tenors:  11.60 years
  • Tranche Sizes: $1,311mm
  • Spread Compression from IPTs to the Launch: <19.77> bps


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

  • NICs tightened 2.00 bps to <0.87> bps vs. 1.13 bps.
  • Over subscription or bid-to-cover rates contracted by 0.17x to 31.12x vs. 3.29x. 
  • Average tenors extended dramatically by 4.93 years to 11.60 years vs. 6.67 years.
  • Tranche sizes increased by $466mm to $1,311mm vs. $845mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s 28 IG Corporate-only new issues tightened by <1.57> bps to <19.77> vs. <18.20> bps.
  • Standard and Poor’s Investment Grade Composite Spreads widened 2 bps to +166 vs. +164.
  • Week-on-week, BAML’s IG Master Index widened 2 bps to +128 vs. +126. 
  • Spreads across the four IG asset classes widened 2.00 bps to 21.00 vs. 19.00 bps as measured against their post-Crisis lows. 
  • The 19 major industry sectors widened 1.20 bps to 25.20 vs. 24.00 bps also against their post-Crisis lows.

Corporate America has posted earnings.  Lots of issuers have exited blackouts.  Next week we have a very light calendar insofar as economic data releases are concerned.  Japan’s Abe meets with President Trump but that’s not until a week from Saturday.  There are several Fed members that will be speaking next week but we are in a steady-as-she-goes mode and I strongly suspect a big week next week.    

And now after my work and thoughts I ask you my favorite question of the week gift to you I ask, “what are your numbers and thoughts for next week’s IG Corporate new issue volume.

Thank you very much! -Ron”

 

The “Best and the Brightest” in Their Own Words

 

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

 

*Responses to the QC weekly canvass of the top 23 investment bank fixed income syndicate desks are available only via direct email to distribution list recipients of Quigley’s Corner.

 

Syndicate IG Corporate-only Volume Estimates for Next Week

IG Corporate New Issuance Next Week
2/06-2/10
Low-End Avg. $23.74b
Midpoint Avg. $24.72b
High-End Avg. $25.70b
The Low $15b
The High $35b

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

 

Next Week
2/06-2/10
1: 15b
1: 15-20b
2: 20b
3: 20-25b
9: 25b
4: 25-30b
1: 30b
1: 31b
1: 30-35b

 

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 weekend and enjoy the Super Bowl!

Ron Quigley, Managing Director & Head of Fixed Income Syndicate

 

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

 

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

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
1/30
TUES.
1/31
WED.
2/01
TH.
2/02
FRI.
2/03
THIS WEEK’S
AVERAGES
AVERAGES
WEEK 1/23
AVERAGES
WEEK 1/16
AVERAGES
WEEK 1/09
AVERAGES
WEEK 1/02
AVERAGES
WEEK 12/26
New Issue Concessions 7 bps 5.36 bps N/A <2.82> bps N/A <0.87> bps 1.13b bps 3.42 bps 0.85 bps 2.25 bps N/A
Oversubscription Rates 2.68x 2.89x N/A 3.71x N/A 3.12x 3.29x 2.40x 2.85x 2.45x N/A
Tenors 14.11 yrs 12.37 yrs N/A 9.15 yrs N/A 11.60 yrs 6.67 yrs 12 yrs 7.83 yrs 6.52 yrs N/A
Tranche Sizes $1,983mm $1,179mm N/A $967mm N/A $1,311 yrs $845mm $1,123mm $927mm $859mm N/A
Avg. Spd. Compression
IPTs to Launch
<17.22> bps <19.54> bps N/A <21.88> bps N/A <19.77> bps <18.20> bps <14.69> bps <18.77> bps <15.27> bps N/A

 

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

Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 36 deals that printed, 27 tightened versus NIP for a 75.00% improvement rate while 6 widened (16.75%) and 3 were flat (8.25%).

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

 

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED TRADING
Apple Inc. Aa1/AA+ FRN 2/08/2019 500 3mL+equiv 3mL+equiv 3mL+8 3mL+8 3mL+7/5
Apple Inc. Aa1/AA+ 1.55% 2/08/2019 500 +60a +40a (+/-2) +38 +38 34.5/32
Apple Inc. Aa1/AA+ FRN 2/07/2020 500 3mL+equiv 3mL+equiv 3mL+20 3mL+20 3mL+17/15
Apple Inc. Aa1/AA+ 1.90% 2/07/2020 1,000 +65a +50a (+/-5) +45 +45 43/41
Apple Inc. Aa1/AA+ FRN 2/09/2022 1,000 3mL+equiv 3mL+equiv 3mL+50 3mL+50 3mL+45/43
Apple Inc. Aa1/AA+ 2.50% 2/09/2022 1,500 +80a +60a (+/-2) +58 +58 58/56
Apple Inc. Aa1/AA+ 3.00% 2/09/2024 1,750 +100a +80a (+/-5) +75 +75 71/69
Apple Inc. Aa1/AA+ 3.35% 2/09/2027 2,250 +110a +90a (+/-2) +88 +88 83/81
Apple Inc. Aa1/AA+ 4.25% 2/09/2047 1,000 +140a +120a (+/-5) +115 +115 111/109
Johnson Controls Int’l. PLC Baa1/BBB+ 4.50% 2/15/2047 500 +170a +150a (+/-5) +145 +145 139/138
PNC Financial Services A3/NR FRN 8/07/2018 575 N/A N/A N/A 3mL+25 3mL+24/23
Standard Industries Inc. Ba2/BBB- 5.00% 11/15/2026 500 low 5.00%
5.125
N/A N/A +253 254/250
US Bancorp A3/BBB+ 5.30% PerpNC10 1,000 5.625%a 5.35%a (+/-5) 5.30% $100.00 283/278
Province of Ontario Aa2/AA- 2.40% 2/08/2022 2,500 MS +44a MS +42 MS +42 +49.35 46.5/44.5
AT&T Inc. Baa1/A- 3.20% 3/01/2022 1,250 +150a +135a (+/-5) +130 +130 125/123
AT&T Inc. Baa1/A- 3.80% 3/01/2024 750 +175a +160a (+/-5) +155 +155 150/147
AT&T Inc. Baa1/A- 4.25% 3/01/2027 2,000 +195a +185a (+/-5) +180 +180 170/168
AT&T Inc. Baa1/A- 5.25% 3/01/2037 3,000 +235a +225a (+/-5) +220 +220 207/204
AT&T Inc. Baa1/A- 5.45% 3/01/2047 2,000 +250a +245a (+/-5) +240 +240 229/226
AT&T Inc. Baa1/A- 5.70% 3/01/2057 1,000 +275a +270a (+/-5) +265 +265 257/252
Bank of NY Mellon Corp. A1/AA- 2.60% 2/07/2022 1,250 +90a +80a (+/-5) +75 +75 74/72
Bank of NY Mellon Corp. A1/AA- 11NC10 2/07/2028 1,000 +110-115/+112.5a +105a (+/-5) +100 +100 97/93
Commw’th. Bk. of Australia Aa2/NA FRN 8/03/2018 200 N/A N/A N/A 3mL+35 3mL+37/35
National Rural Utilities Coop. A1/A+ 2.95% 2/07/2024 450 +85-90/+87.5a +75-80 +75 +75 73/71
Seagate HDD Cayman Baa3/BBB- 4.25% 3/01/2022 750 +high 200s
+287.5a
+250a (+/-10) +240 +240 248/243
Seagate HDD Cayman Baa3/BBB- 4.75% 3/01/2024 500 +low 300s
+312.5a
+285 (+/-10) +275 +275 280/275
Crown Castle Int’l. Corp. Baa3/BBB- 4.00% 3/01/2027 500 +175-180 +160a (+/-3) +157 +157 157/155
Microsoft Corp. Aaa/AAA 1.85% 2/06/2020 1,500 +60a +45a (+/-5) +40 +40 35/33
Microsoft Corp. Aaa/AAA 2.40% 2/06/2022 1,750 +70a +55a (+/-5) +50 +50 47/46
Microsoft Corp. Aaa/AAA 2.875% 2/06/2024 2,250 +90a +75a (+/-5) +70 +70 59/57
Microsoft Corp. Aaa/AAA 3.30% 2/06/2027 4,000 +100a +90a (+/-5) +85 +85 77/75
Microsoft Corp. Aaa/AAA 4.10% 2/06/2037 2,500 +115a +105a (+/-5) +100 +100 88/87
Microsoft Corp. Aaa/AAA 4.25% 2/06/2047 3,000 +130a +120a (+/-5) +115 +115 106/104
Microsoft Corp. Aaa/AAA 4.50% 2/06/2057 2,000 +155a +145a (+/-5) +140 +140 129/126
USAA Capital Corp. Aa1/AA FRN 2/01/2019 350 3mL+high30s/
+37.5a
3mL+23-25 3mL+23 3mL+23 3mL+23
IFC
(tap) New Total: $750mm
Aaa/AAA FRN 12/15/2021 250 N/A 3mL+13a 3mL+13 3mL+13 3mL+15/14

 

Indexes and New Issue Volume

Please note that the below index levels are as of 4:30pm ET.
*Denotes new tight.

 

Index Open Current Change
IG27 65.548 63.605 <1.943>
HV27 138.23 138.31 0.08
VIX 11.93 10.95 <0.98>
S&P 2,280 2,297 17
DOW 19,884 20,071 187
 

USD

 

IG Corporates

 

USD

 

Total (IG + SSA)

DAY: $0.00 bn DAY: $0.00 bn
WTD: $44.575 bn WTD: $47.325 bn
MTD: $12.575 bn MTD: $15.075 bn
YTD: $184.958 bn YTD: $242.358 bn

 

Lipper Report/Fund Flows – Week ending January 25th     

     

  • For the week ended January 25th, Lipper U.S. Fund Flows reported an inflow of $2.657b into Corporate Investment Grade Funds (2016 YTD net inflow of $12.354b) and a net inflow of $412.595m into High Yield Funds (2016 YTD net inflow of $291.062m).
  • Over the same period, Lipper reported a net inflow of $991.469m into Loan Participation Funds (2016 YTD net inflow of $4.760b).
  • Emerging Market debt funds reported a net outflow of $21.098m (2016 YTD inflow of $144.504m).

 

IG Credit Spreads by Rating

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

Spreads across the four IG asset classes are an average 21.00 bps wider versus their post-Crisis lows. (more…)

Equity Market View Via Peruzzi’s Perch:Trump Tweets; Back to Active Management
December 2016      Equities Market Commentary   

Peruzzi’s Perch Dec 09 2016 : Equity Market View Dominated by Trump Tweets Aimed at Companies; Back to Active Management to Capture Alpha

larry-peruzzi-mischler-equitiies

Larry Peruzzi

We close out a remarkable week in which markets flirted with new highs daily. Wednesday was the 75th anniversary of the Pearl Harbor attacks. That event prompted Japanese Field Marshal Isoroku Yamamoto to say “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve”. A fitting quote that could also ring true for the current state of global equity markets. The Trump victory and growing sentiment that market friendly policies are forthcoming have U.S indices hitting new all-time highs daily.

Volatility, as measured by the VIX index, is near the lowest levels of the year. We are seeing shorts being squeezed as investors are putting idle cash to work, albeit mostly by means of passive investing. The month of December has historically been the best performing month for the S&P 500. Since 1950 the S&P 500 averages a gain of 1.7% in December. This year we are firmly ahead of average with the S&P gaining 2.2% through the first 6 trading days. Normally we start to see some investors taking gains in December but with Trump’s pledge to reduce capital gain taxes, investors are holding off on selling. This will help add more fuel to the market, which in turn has pushed more sideliners into the market.

Since the Wednesday after the U.S election 392 of the S&P 500 names (505 companies) are trading higher.  Economic releases this week were mostly backwards looking, with the exception of Friday’s Michigan sentiment reading, which saw an uptick in both current conditions and expectations. Thursday the ECB announced that the stimulus package will be extended at a reduced rate of 60 billion Euros per month, but it will be extended for another 9 months. This was greeted positively by European markets.  South Korean President was ousted on Friday as South Korea joined the growing list of countries (U.K, Brazil, Italy, New Zealand, and Kuwait) whose leaders have stepped down this year.  Also Coca Cola CEO announced he is stepping down on May 1, 2017.

Looking ahead to next week, we have a quiet start to the Economic releases, but then we pick up the pace on Wednesday when the Federal Reserve is expected raise rates for the first time in a year. The thought of rising rates was a market mover earlier in the year, but the current momentum makes Wednesday Fed announcement largely a formality. The only way it will move markets is if it is a smaller or large hike than the currently priced in 25 bps.  The announcement’s wording should garner some interest.

Also making rate decisions next week will be: Bank of England, Switzerland, Mexico, Chile, Peru, Indonesia and South Korea. Other stats due next week are November retail sales and PPI data on Wednesday, Current account balance, November CPI data and jobless claims on Thursday. The week closes out with November Housing Starts and Building permits on Friday.

With crude oil back over $51 (up 13.6% since 11/29) a barrel at 2016 highs commodity traders will be watching the OPEC outlook discussion on Tuesday and inventory numbers on Tuesday and Wednesday. Gold start the week at its lowest levels since February and the 10 year Treasury yield at its highest level since July 2015. Look for the allocation trade to continue, but somewhat ease next week.

Oracle and Adobe Systems are the highlights of a handful of firms reporting on Thursday. We expect markets and market strategy to return toward a more active managed approach from our current passive approach. With the current rally pushing idle cash into the market, the next step is the search for alpha. So, starting to pay attention and analysis of fourth quarter earnings next month will be a good first step. The course of action next week seems to be: Put cash to work, watch President-elect Trump’s tweets and comments for policy resolve, see what the Fed has to say on Wednesday, mail out those Christmas Cards and get ready to roll up your active management sleeves in January.

Godspeed John Glenn

 

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Ph:   1-617-420-8472

Larry Peruzzi is a 20 yr global trading markets veteran and brings to Mischler a unique background. His career 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 (more…)