Munching on Mnuchin Musings; Mischler Debt Market Comment
February 24, 2017   //   by Mischler MarCom   //   Debt Market Commentary  

Quigley’s Corner 02.23.17- Munching on Mnuchin Musings


Investment Grade Corporate Debt New Issue Re-Cap

IG Primary & Secondary Market Talking Points

Global Market Recap

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

Treasury Secretary Steve Mnuchin Speaks on Squawk

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 15th    

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


Danske Bank A/S was the lone corporate issuer to tap the IG dollar DCM today pricing 3 tranches totaling $1.75b.  The SSA space woke up featuring one well-telegraphed NWB 5-year that was $1b, bringing the all-in IG day totals to 2 issuers, 4 tranches and $2.75b.
We priced an anemic 57% of this week’s already low syndicate midpoint average forecast or $11.125b vs. $19.40b.
CDX IG and HV closed today’s session at new tights and the S&P and Dow closed at new all-time highs.

Upcoming potential market moving events:

  • Fed Chair Janet Yellen speaks at the Executive’s Club of Chicago on Friday, March 3rd.
  • The Employment Situation for February is scheduled to be released on Friday, March 10, 2017, at 8:30 a.m. (EST).


IG Primary & Secondary Market Talking Points


  • The average spread from IPTs thru the launch/final pricing of today’s 3 IG Corporate-only new issues was <11> bps.
  • BAML’s IG Master Index tightened 1 bp to +123 vs. +124.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 1.18 vs. 119 matching its tight since November 3rd, 2014.
  • 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 $20.8b on Wednesday versus $17.8b on Tuesday and $24.6b the previous Wednesday.
  • The 10-DMA stands at $20.0b.


Global Market Recap


  • U.S. Treasuries – rallied into the $28 bn 7yr auction & then the market stood still.
  • Overseas Bonds – 30yr JGB rallied 5 bps. Strong session for France & Belgium.
  • Stocks – Dow heading for its 10th winning session in a row.
  • Overseas Stocks – Asia with small losses. Europe closed mostly red.
  • Economic – Jobless claims 4-week moving average at lowest level since 1973.
  • Overseas Economic – China data better & Japan weaker. Good data in Germany & U.K.
  • Currencies – USD was weaker vs. all of the Big 5.
  • Commodities – Good day for crude oil, gold & silver and very bad day for copper.
  • CDX IG: -0.75 to 61.83
  • CDX HY: -1.53 to 314.93
  • CDX EM: -8.77 to 213.16

*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
vs. Current
WTD – $11.125b
February 2017
vs. Current
MTD – $61.15b
Low-End Avg. $18.25b 60.96% $90.65b 67.46%
Midpoint Avg. $19.40b 57.35% $91.96b 66.50%
High-End Avg. $20.54b 54.16% $93.26b 65.57%
The Low $15b 74.17% $85b 71.94%
The High $26b 42.79% $120b 50.96%


Treasury Secretary Steve Mnuchin Speaks on Squawk Box

US Treasury Secretary Steve Mnuchin offered his views this morning while appearing with Becky Quick of CNBC in his first interview since becoming the 77th U.S. Secretary of State. He spoke on various topics ranging from policy and regulation to immigration tax and growth.  Here are the key takeaways.  Thank you to one of our own Treasury gurus, Mr. Tony Farren, for the summary..

  • Most important thing for growth is tax plan.
  • We’re mostly focused on middle-class tax cut.
  • We believe in dynamic scoring for tax plan.
  • High-income tax cuts should be offset.
  • Could be late 2018 to get to 3% growth.
  • We’re looking closely at border adjustment tax.
  • Some issues with border adjustment tax.
  • Tax reform to be significant.
  • Tax reform goal is by August Congress recess.
  • Not ready to announced a longer-term U.S. Bond.
  • Should seriously look at longer-term bond issues (50- and 100-year).
  • Have had terrific talks with China so far.
  • Not making judgments on China FX.
  • Treasury has a process for reviewing FX policies.
  • We will probably have low rates for a long period.
  • Administration’s growth projections are likely higher versus Congress.
  • 3% GDP growth is very achievable.
  • Regulatory relief is also important boost to growth.
  • We’re looking at significant economic changes.
  • We’re reaching out to businesses.
  • Need to ensure banks put liquidity to work.
  • USD, stocks reflecting confidence in U.S. economy.
  • Not focused on day-to-day market moves.
  • Looking forward to regular meetings with Yellen
  • Looking forward to G-20 talks in March.
  • Has his team looking at EXIM Bank loan expansion.
  • He’s committed to housing finance reform.
  • We need bipartisan solution so that GSEs are not left as is.


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

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

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

To receive Quigley’s Corner, please contact Ron Quigley, Managing Director and Head of Fixed Income Syndicate via email: or via phone.

*Sources: Bank of America/Merrill Lynch, Bloomberg, Bond Radar, Dow Jones Newswire, IFR, Informa Global Markets, Internal Mischler, LCDNews, Market News International, Prospect News, Standard & Poor’s Ratings Services, S, Thomson Reuters and of course, a career of sources, contacts, movers and shakers from syndicate desks to accounts; from issuers to originators; from academicians to heads of research, and a host of financial journalists, et al.

Mischler Financial Group’s “U.S. Syndicate Closing Commentary”  is produced weekly by Mischler Financial Group. No part of this document may be reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

Munching on Mnunchin Musings; Mischler Debt Market Comment