Browsing articles tagged with "veteran-owned Archives - Mischler Financial Group"
Mischler Muni Market Outlook; Pending Municipal Debt Deals Week of March 20
March 2017      Muni Market, Recent Deals   

Mischler Muni-bond Market Outlook for the week commencing 03.20.17 looks back to last week’s metrics and provides a lens focused on pending municipal debt deals scheduled. As always, the Mischler Muni Market snapshot 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, money flows and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $4.4 billion. This week volume is expected to be $4.5 billion. The negotiated market is led by $594.0 million for the New York State Environmental Facilities Corp on behalf of New York City Municipal Water Finance Authority. The competitive market is led by $239.9 million general obligation bonds for San Francisco Unified School District, California in 2 bids on Tuesday.

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-muni-market-outlook

 

 

 

 

 

 

 

 

 

Mischler Financial Group debt capital market expertise includes Debt Origination, Distribution, Primary Market Access and Secondary Market trading across the full spectrum of fixed income markets. Our value-add is courtesy of our 18-member team of debt market veterans. a team that makes MFG’s Fixed Income Group a compelling partner to Fortune issuers, corporate treasurers, municipal debt market issuers and the world’s leading institutional investors.

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.

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

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

 

 75TH Anniversary of Pearl Harbor

Investment Grade Corporate Bond New Issue Re-Cap

Global Market Recap

IG Primary & Secondary Market Talking Points

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

New Issues Priced

Indexes and New Issue Volume

IG Credit Spreads by Rating

IG Credit Spreads by Rating

New Issue Pipeline

M&A Pipeline

Lipper Funds Flow Report

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

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

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

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

 

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

 

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

 

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

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

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

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

Cover of The New York Times 75 years ago today.

 

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

 

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

-Franklin D. Roosevelt

 

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

-Winston Churchill

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

-George S. Patton           

 

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

-Dwight Eisenhower


75th Anniversary: Pearl Harbor Veteran Remembrance Day

 

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

 

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

The person wrote:

Ron,

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

 

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

mischler-pearl-harbor-anniversary-veteran-salute

Today’s Ceremony at the USS Arizona Memorial

 

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

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

 

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

 

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

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

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

 

pearl-harbor-survivor-us-military-veterans

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

 

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

 

Investment Grade New Issue Re-Cap 

 

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

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

 

Global Market Recap

 

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

 

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

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

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

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

 

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

 

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

 

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

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

 

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

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

 

New Issues Priced

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

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

 

IG

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

           

SSA

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

 

Indexes and New Issue Volume

 

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

USD

 

IG Corporates

 

USD

 

Total IG (+SSA)

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

 

Lipper Report/Fund Flows – Week ending November 30th    

     

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

 

IG Credit Spreads by Rating

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

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

 

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

 

IG Credit Spreads by Industry

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

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

                                    

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

 

New Issue Pipeline

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

 

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

 

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

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

Weekend Edition Mischler Debt Market Comment: SecDef Soundoff
December 2016      Debt Market Commentary   

Quigley’s Corner 12.02.16 –DCM Weekend Edition-Debt Market Outlook; SecDef Soundoff

 

Investment Grade New Issue Re-Cap – Next Week and “DONE” for the Year!

Global Market Recap

IG Corporate Bond Primary & Secondary Market Talking Points

Citigroup, Inc. Deal Dashboard – Thursday’s FRN Prints Flat and 5yr Fixed Prices with Nickel NIC

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

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

On James “Mad Dog” Mattis as SecDef, Veteran Marine, Jonathan Herrick’s Scope

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

New Issues Priced

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

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

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending November 30th    

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:

IG Credit Spreads by Industry

Snapshot of the major investment grade sector credit spreads for the past ten sessions

New Issue Pipeline

M&A Pipeline – $301.04 Billion in Cumulative Enterprise Value!

Economic Data Releases

Rates  Trading Lab

Tomorrow’s Calendar

I have a lot for you this evening beginning with the Primary and Global Market Re-caps followed by IG Primary/Secondary Market Talking Points and a review of the WTD and MTD new issue volume performance against respective syndicate estimates.  Then of course, like every Friday, the “Best and the Brightest” that IG syndicate has to offer have all unanimously chimed in once more to let you know what to expect for next week’s IG Corporate issuance.  I think most all of us in the world of new issues feel next week is the last “GO” week of the year.  We have history to back that up, an FOMC Rate Decision meeting on Tuesday the 13th and well, a nice and well-deserved slow down for us all.  It’s also time to re-energize for January when we’re all “back-to-zero” to start it all over again.

I also bring to you this evening a nice piece written by our own Marine Veteran Jonathan Herrick – in his own words – on last evening’s President-elect Donald Trump’s nomination of General James “Mad Dog” Mattis as Secretary of Defense.  Please do take the time to read that piece.

Without further ado, let’s get to it…………


Investment Grade New Issue Re-Cap – Next Week and “DONE” for the Year!

Timing is everything as they say.  2 issuers braved the market today as NFP met expectations while the Unemployment Rate beat big time delivering a 4.60% vs. 4.90% though wages surprised to the downside.  Rates rallied, yields compressed and 2 deals got done totaling $1.1b.  We’ve now priced 15% more than this week’s syndicate midpoint average forecast or $26.40b vs. $22.89b.  Already, one third of the entire December IG Corporate new issue estimate has been achieved ($14.93b vs. $41.52b).

Please note that yesterday’s $3b Citigroup, Inc. 5-year FXD/FRN priced with a 5 bp concession.  As I wrote, “The comparable used for relative value is the outstanding Citigroup 2.35% Senior Unsecured 5-year due 8/02/2021 that opened in the morning pre-announcement T+93 (G+100) pegging NIC on the new 5-year two-part FXD/FRN transaction at 5 bps.”  However, I had a typo in my “Deal Dashboard” that showed 8 bps.  So, to be clear, both the FXD/FRN printed with a nickel or 5 bps NIC.  Thanks! –RQ.

Revised Citigroup, Inc. Deal Dashboard – Thursday’s FRN Prints Flat and 5yr Fixed Prices with Nickel NIC

 

Citi Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
5yr FRN 3mL+equiv 3mL+equiv 3mL+107 3mL+107 <15> bps 5 bps 3mL+105/103 <2>
5yr FXD +120a +105 the # +105 +105 <15> bps 5 bps 105/103 0/flat

 

Global Market Recap

 

  • S. Treasuries – had a strong rally on the mixed U.S. Employment Report.
  • Overseas Bonds – Bonds in Europe had a big time rally into the Italy referendum.
  • 3mth Libor – Set at its highest yield since May 2009 (0.94639%).
  • Stocks – U.S. stocks were little changed 3:30pm. Stocks overseas closed in the red.
  • Economic – U.S. Employment Report was a mixed bag. Higher EU PPI than expected/last.
  • Currencies – USD underperformed 4 of the Big 5 & was unchanged vs. the Euro.
  • Commodities – Crude oil was higher again. Gold up and big gains for silver/wheat.
  • CDX IG: -0.74 to 72.77
  • CDX HY: -4.23 to 388.23
  • CDX EM: -2.77 to 270.30

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

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

  • Nabors Industries Inc. upsized today’s new 6yr NCL Senior Notes transaction to $600mm from $500m .
  • Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 44 deals that printed, 28 tightened versus NIP for a 50% improvement rate while 8 widened (18.25%) and 6 were flat (13.75%) and 2 was not available or “N/A” (4.50%).
  • For the week ended November 30th, Lipper U.S. Fund Flows reported an outflow of $1.302b from Corporate Investment Grade Funds (2016 YTD net inflow of $41.464b) and a net inflow of $341.7m into High Yield Funds (2016 YTD net inflow of $4.939b).
  • The average spread compression from IPTs thru the launch/final pricing of today’s 2 IG Corporate-only new issues was <37.5> bps.
  • BAML’s IG Master Index tightened 1 bp to +135 vs. +136.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to +128 vs. +129.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Investment Grade Composite Spread tightened 2 bp2 to +175 vs. +177.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $23.3b on Thursday versus $25.2b on Wednesday.

The last two trading sessions represent the #1 and #2 ranked high volume sessions since record keeping began in December 2005.

  • The 10-DMA stands at $16.5b.

 

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

 

IG Corporate New Issuance This Week
11/28-12/02
vs. Current
WTD – $26.40b
December 2016
Forecasts
vs. Current
MTD – $14.93b
Low-End Avg. $21.91b 120.49% $40.87b 36.53%
Midpoint Avg. $22.89b 115.33% $41.52b 35.96%
High-End Avg. $23.87b 110.60% $42.17b 35.40%
The Low $15b 176.00% $30b 49.77%
The High $30b 88.00% $60b 24.88%

 

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

 

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 81.55% 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.

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

Entering today, we’ve produced $25.30b in new IG Corporate volume or over 10% more than the $22.89b syndicate midpoint average estimate. We have the big FIGs to thank for yesterday’s incredible volume.  For the most part we have next week and the following Monday before the FOMC meeting closes the door on any meaningful 2016 issuance. Given today’s payroll pickup and dramatic unemployment rate decline to 4.6% from 4.9% it’s now more than ever a foregone conclusion that a rate hike will take place on Tuesday December13th.
Here are this week’s five IG Corporate-only key primary market driver averages entering this morning’s session:

  • NICS:  3.53 bps
  • Oversubscription Rates: 3.56x
  • Tenors:  10.97 years
  • Tranche Sizes: $723mm
  • Spread Compression from IPTs to the Launch: <16.46> bps
  • Versus last Friday’s key primary market driver averages, NICs widened 0.97 bps to 3.53 bps vs. 4.50 bps.
  • Over subscription or bid-to-cover rates increased 0.57x to 3.56x vs. 2.99x vs. 2.78x vs. last week. 
  • Average tenors narrowed out by 1.17 years to 10.97 years vs. 12.14 years.
  • Tranche sizes decreased by $206mm to $723mm vs. $929mm.  
  • Spread compression from IPTs to the launch/final pricing of this week’s IG Corporate new issues compressed +0.39 bps to <16.46> bps vs. <16.07> bps last week.
  • Standard and Poor’s Investment Grade Composite Spreads tightened 4 bps to +175 vs. +179.
  • Week-on-week, BAML’s IG Master Index tightened 1 bp to +135 vs. last Friday’s +136 close. 
  • Spreads across the four IG asset classes tightened by 2 bps to 25.75 vs. 27.75 bps as measured against their post-Crisis lows. 
  • Looking at the 19 major industry sectors, spreads tightened 1.63 bps to 32.05 vs. 33.68 bps also against their post-Crisis lows.
  • Of interesting note Investment grade corporate bond trading posted a final Trace count of $23.3b on Thursday versus $25.2b on Wednesday.

Those two trading sessions represent the #1 and #2 ranked IG Corporate high volume sessions since record keeping began in December 2005! Please let me know your thoughts and numbers for next week.

Thanks as always for your time and enjoy a wonderful weekend!  -Ron”

 

The “Best and the Brightest” in Their Own Words

This section available exclusively to QC distribution list recipients

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Syndicate IG Corporate-only Volume Estimates for Next Week

IG Corporate New Issuance Next Week
12/05-12/09
Low-End Avg. $16.78b
Midpoint Avg. $17.87b
High-End Avg. $18.96b
The Low $10b
The High $25b

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

 

Next Week
12/05-12/09
2: 10-15b
4: 15b
1: 16b
1: 17b
5: 15-20b
1: 18b
6: 20b
3:20-25b

 

mischler-us-marine-mattis-secdef

SecDef designate James Mattis

On the Nomination of James “Mad Dog” Mattis as Secretary of Defense, in the Words of Mischler’s very own Veteran Marine, Jonathan Herrick

 

“Demonstrate to the world there is ‘No better friend – No worse enemy’ than a U.S. Marine.”

-General James “Mad Dog” Mattis

 

Last evening I watched on the overhead office flat screen television, President-elect Donald Trump’s announcement that “We are going to appoint “Mad Dog” Mattis as our Secretary of Defense.  But we’re not announcing it until Monday so don’t tell anybody.”  That was a great nomination and also a lighthearted and very funny Trump-ism that I personally thought was a great moment.  Trump continued with, “They say he’s the closest thing to General George Patton that we have and it’s about time.”  That definitely makes me feel good about America.  But since Mischler is our great nation’s oldest Service Disabled Veteran broker dealer, why not hear about who he is from our very own veteran Marine, Jonathan Herrick, who signed on as fixed income desk analyst six months ago.  Jonathan is an 8-year veteran Marine who served multiple tours of duty in the mid-East and was honorably discharged from the U.S. Marine Corps as a Sergeant 1st Battalion, 8th Marine Regiment, 2nd Division.  His is a great story and he’s made an immediate impact supporting our capital markets team.  For a photo of Jonathan, please see the “QC” dated July 5th, 2016 when I featured a piece on a VOWS event or” Veterans on Wall Street” in which Jonathan and a team of other veterans rang the bell to close the Nasdaq exchange. 

Given Donald Trump’s SecDef nomination of James “Mad Dog” Mattis, Jonathan took the time to write his thoughts on the Secretary of Defense nominee from his perspective as a former Marine who served two tours in Afghanistan and one tour in Iraq. Take it away, Jon!

veteran-owned-mischler-us-marine-herrick

Veteran US Marine Jon Herrick (l) Khaki Bridge” Afghanistan in 2012.

I am proud and honored to have it featured in the “QC” for your reading pleasure: Take it away, Jon!

Our current nominee for Secretary of Defense, General James Mattis, is a legend amongst Marines of the Global War on Terror era.  One of the most respected generals of our time, Mattis is known for his aggressive “can-do” attitude, emphasis on the mental and intellectual aspects of war, and his leadership and care for the Marines he commanded.  He led the 1st Marine Division during the invasion of Iraq on the march to Baghdad and worked with General Petraeus to develop the counterinsurgency tactics that helped pacify the Anbar Province to the point that when I arrived there in 2009, our battalion took fire on only a small handful occasions over a seven month deployment.

 

A life-long bachelor, he is known in military circles as the Warrior Monk due to his focus on the military arts and emphasis on the value of education.  He would often encourage his subordinate commanders to further their own education, and that of their Marines, as he believed that lessons learned from the past can “light what is often a dark path ahead.”  Famously, he stated that “the most important six inches on the battlefield are between your ears.”  Known as an aggressive leader, he earned the nickname “Mad Dog” and went by the call sign “Chaos” during the war.  As a testament to his ability to understand the complexities of a counterinsurgency environment, he coined the term “First, do no harm” as a guideline for Marines deployed in the war zone.

Another story that is shared widely in military circles, that I first heard when I spent Christmas in Boot Camp on Parris Island in 2007, is when General Mattis took over the duty of a young married Marine on Christmas Day.  On every Marine facility, from Baghdad to Washington, there is a Marine on duty at all times.  While reading at the duty roster, he noticed that the officer scheduled to have duty on that day was married.  General Mattis, being a bachelor, sent the married Marine home to spend Christmas with his family while General Mattis himself took over the duty.  He displayed that same kind of caring leadership for his Marines both during combat deployments in Iraq and Afghanistan, and back home in the United States.

Mattis is also known to speak his mind when he disagrees with decisions that are being made and is perhaps better known for his rather blunt quotes.  One of the mantras we learned as we were moving into theater was “Be polite, be professional, but have a plan to kill everyone you meet” which on the surface may seem uncivilized, but was key to overcoming threats and working with the population in an environment where the enemy was hiding amongst civilians and using suicide bomber tactics.  Mattis’ tactics, I am convinced, prevented immeasurable loss of life on all sides of the conflict.

I believe I speak for all veterans when I say that I am incredibly excited to see what he can do for the Department of Defense.  A free thinker with a winning mindset he is just what our military needs in these uncertain times.  I will leave you with a copy of his letter to the 1st Marine Division on the eve of the invasion in 2003, and this Mattis quote; “I don’t lose any sleep at night over the potential for failure. I cannot even spell the word.”

Gen. Mattis requires a supermajority to garner Senate confirmation. Thus far he is the only Trump nominee who the Democratic Party can unilaterally block. The reason is that there is a mandated seven year “seasoning period” for military personnel post-retirement before being able to serve in a cabinet post.  Five-star General Omar Bradley is the lone exception to this rule following World War II.  As a result, Congress needs to pass legislation that would waive the 7-year requirement in order for Mattis to be confirmed.  So, perhaps we’re a bit ahead of ourselves although I personally would love to see “Mad Dog” as our “Doctor of Defense.”  Professional pundits typically frame their opinions with “most likely” and/or approaches such as “despite the prevailing view from this perch leads me to believe that the outcome will be…….” Rather than presenting future outcomes with unabashed certainty. So, now that that’s crystal clear for everyone please allow me to say “Mattis will be confirmed as our next Secretary of Defense!” There, that felt good!   I’ve never been one to leave room to invent excuses on the spot or simply switch my narrative to a different topic altogether and squirm out of something.  The record shows that and what’s more the ”QC” is still waiting to be wrong on the big calls.  I will, one day, and when I am I’ll say “ I was wrong!”  Italy will vote “NO” on the referendum this weekend and I do believe Austria’s Norbert Hofer will become the first Nationalist head of state in Europe since WWII.  It speaks volumes as to the volatility coming to Europe and a continued dismantling of the EU as we know.

 

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!
Ron Quigley

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