Investment Grade Corporate Bond DCM Scorecard 06-27-17- Mischler Debt Market Commentary
June 27, 2017   //   by Mischler MarCom   //   Debt Market Commentary  

Quigley’s Corner 06.27.16    Investment Grade DCM Scorecard; AIG, American Tower, GM Financial, Charter Comm, Enbridge and Regency Centers LP


Investment Grade Corporate Bond  New Issue Re-Cap
Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and June

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

New Issues Priced

Indexes and New Issue Volume

Lipper Report / Fund Flows

IG Credit Spreads by Rating

IG Credit Spreads by Industry

Economic Data Releases

New Issue Pipeline

M&A Pipeline

Rates Trading Lab

Tomorrow’s Calendar


Today the IG Corporate dollar DCM hosted 6 issuers that priced 12 tranches between them totaling $6.75b.  The SSA space featured a $300mm 5-year Green Bond new issue from KDB bringing the combined IG Corporate and SSA day total to 7 issuers, 13 tranches and $7.05b.

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

  • The IG Corporate WTD total finished having priced only 64.84% of this week’s syndicate midpoint average forecast or $10.40b vs. $16.04b.
  • MTD we’ve now priced 91.42% of the syndicate forecast for June or $83.17b vs. $90.98b.
  • There are now 10 IG Corporate, Yankee and/or SSA new issues in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points

  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 12 IG Corporate-only new issues was <14.04> bps.
  • BAML’s IG Master Index tightened 1 bp to +117 versus +118.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 1.11 versus 1.12.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +160.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $15.0b on Monday versus $11.8b on Friday and $13.0b the previous Monday.
  • The 10-DMA stands at $15.8b. 

Global Market Recap 

U.S. Treasuries – followed European bonds south.

Overseas Bonds – 2yr JGB rallied 3 bps. Europe hit very hard on Draghi.

Stocks: NASDAQ having a bad day heading into the close

Overseas Stocks: Asia had small gains. Europe lost ground

Economic: US data took a back seat to the comments from ECB Pres. Draghi

Overseas Economic: Not really a factor

Currencies: USD lost ground vs 4 of Big 5. Great day for the Euro & bad for DX

Commodities: Crude oil had a good day

CDX IG: +1.85 to 61.45

CDX HY: +6.07 to 339.84

CDX EM: +3.46 to 199.55

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

-Tony Farren


The “QC” Geopolitical Risk Monitor


Risk Level/Main Factor Geopolitical Risks
Asian Political Tensions
·          N. Korea continues missile tests with improving accuracy in defiance of protests in G-Zero world;

Lax China involvement; Recent Otto Warmbier death; Frictional hot spot of the world for “event.”

BREXIT Fallout
·          U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. Italian

domestic bank bail-out outside EU “rule of law” concern for EU stability.

“U.S. political gridlock”
Escalating war in Syria
·          Trump financial, healthcare, tax and infrastructure reform challenges & consensus GOP support

to pass legislation questioned/Dems lose 4 consecutive special elections despite media bias.

·          U.S. shoots down Syrian SU-22 that bombed SDF backed-forces; Russia warns that it suspended

cooperation & will track down and shoot coalition planes west of Euphrates. Potential for

escalation between the U.S. & Russia is real. Turkey, Iran, Israel loom large in this scenario.

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

against Russia in 98-2 vote; Russia in expansion mode; meddling in international elections.

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

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

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

·          Closing in on ISIS has also scattered it across wider MENA region and Europe.

MODERATE ·          China hard landing – rising corporate debt have the OECD and IMF concerned.

·          Venezuela – tumbling oil prices could impact ability to repay debt; civil unrest.

2018 U.S. Recession
·          Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak and sights

on one more rate hike in 2017.


Syndicate IG Corporate-only Volume Estimates This Week and June


IG Corporate New Issuance This Week
vs. Current
WTD – $10.40b
June 2017
vs. Current
MTD – $83.17b
Low-End Avg. $15.46b 67.27% $90.04b 92.37%
Midpoint Avg. $16.04b 64.84% $90.98b 91.42%
High-End Avg. $16.62b 62.58% $91.92b 90.48%
The Low $10b 104.00% $75b 110.89%
The High $21b 49.52% $110b 75.61%



Have a great evening!

Ron Quigley


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

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:

WEEK 6/19
WEEK 6/12
WEEK 6/05
WEEK 5/29
WEEK 5/22
WEEK 5/15
New Issue Concessions <3.83> bps <4.3> bps <2.14> bps <0.13> bps <0.15> bps <5.45> bps 1.24 bps
Oversubscription Rates 3.66x 2.85x 3.76x 3.10x 2.87x 3.74x 3.20x
Tenors 8.92 yrs 9.37 yrs 13.02 yrs 10.07 yrs 7.03 yrs 11.37 yrs 8.69 yrs
Tranche Sizes $406mm $820mm $646mm $543mm $798mm $817mm $931mm
Avg. Spd. Compression
IPTs to Launch
<17.50> bps <18.76> bps <19.74> bps <15.95> bps <17.51> bps <20.05> bps <17.81> bps


New Issues Priced

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

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


Above is the opening extract from Quigley’s Corner aka “QC”  Tuesday, June 27, 2017 edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans.

Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, the QC is one of three distinctive market comment pieces produced by Mischler Financial Group.The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our fixed income trading and debt capital markets desk 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 email: or via phone 203.276.6646

*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 daily 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.

Investment Grade Corporate Bond DCM Scorecard 06-27-17- Mischler Debt Market Commentary