Investment Grade Corporate Debt Issuers of the Day-Mischler Comment
September 26, 2017   //   by Mischler MarCom   //   Debt Market Commentary  

Quigley’s Corner 09.25.17  – IG Issuers of the Day: AEP, BX, HPP, NSANY

Investment Grade US Corporate Debt New Issue Re-Cap 

Today’s IG Primary & Secondary Market Talking Points

The “QC” Geopolitical Risk Monitor

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

SNEAK PREVIEW : “Thank You For Your Service”

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 20th

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 New Issue Re-Cap

Today’s IG dollar DCM hosted 7 issuers across 13 tranches totaling $6.75b.  The SSA space was quiet with two deals slated for tomorrow’s business.

Equity markets were in the red today due to mounting tensions between the U.S. and North Korea, concern over historic gains by nationalist parties in German elections forcing Angela Merkel to form a coalition government, and increasing jitters over whether the FED hikes rates one more time in 2017 or not.

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 35.14% of this week’s syndicate midpoint average forecast or $6.75b vs. $19.21b.
  • MTD we’ve priced 105.02% of the syndicate forecast for September or $118.096b vs. $112.45b.
  • There are now 7 issuers in the IG credit pipeline.


Today’s IG Primary & Secondary Market Talking Points


  • Hudson Pacific Properties LP upsized today’s 10-year Senior Notes new issue to $400mm from $300mm at the launch and at the tightest side of guidance.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 12 IG Corporate-only new issues was <18.29> bps. Including today’s IG-rated Federal Realty $25 par preferred, the average compression of today’s 13 new issues was <17.85> bps.
  • 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 $13.5b on Friday versus $17.5b on Thursday and $12.7b the previous Friday.
  • The 10-DMA stands at $17.3b.


The “QC” Geopolitical Risk Monitor


Risk Level/Main Factor Geopolitical Risks
North Korea
On 9/24 Trump warns NOKO leadership that if rhetoric threats continue its leaders “won’t be around much longer.” NOKO responds saying it has the right to shoot down U.S. bombers “even outside of NOKO air space.” Beijing termed calls situation “grave.” 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 9/03 NOKO detonated a 100 kiloton hydrogen bomb 5-times more powerful than that dropped on Nagasaki causing a 6.3 magnitude earthquake. Head of IAEA  said hydrogen bomb test is “new dimension of global threat” to the world. On Tuesday, 8/29 NOKO 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. 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.
ELEVATED Germany’s Angela Merkel re-elected to her 4th term but nationalist Alternative for Germany (AfD) party & other right wing parties gain to force a 6-party coalition government.  Worst performance for Merkel’s CDU and Christian Social Union party since 1949.  Immigration a source of tension. Right wing has a seat in German decision-making.

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.

“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. 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. September MTD there were 87 terrorist attacks. killing 347 people and wounding 581.

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.
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
vs. Current
WTD – $6.75b
September 2017 vs. Current
WTD – $118.096b
Low-End Avg. $18.17b 37.15% N/A N/A
Midpoint Avg. $19.21b 35.14% $112.45b 105.02%
High-End Avg. $20.25b 33.33% N/A N/A
The Low $10b 67.50% $100b 118.096%
The High $30b 22.50% $125b 94.48%

Sneak Preview of “Thank You For Your Service”


Friday, October 9th is Veteran’s Day here in the U.S., and in recognition of this important day, I thought it fitting to share a sneak preview of an upcoming film that is getting a lot of buzz in the industry.
THANK YOU FOR YOUR SERVICE profiles a group of U.S. soldiers returning from Iraq who aer struggling to integrate back into family and civilian life, while living with the memory of a war that threatens to destroy them long after they’ve left the battlefield. The film stars Miles Teller and Haley Bennett.  The film is the directorial debut of Jason Hall, a graduate of my alma mater, the University of Southern California’s School of Cinematic Arts or “SCA” and is based on the non-fiction book by David Finkel and adapted for the screen by Finkel and Hall.  The Universal Pictures production opens in theatres on Wednesday, October 27th.  As an SCA Alum, I am doing my part to get the word out from my corner desk here at our nation’s oldest Service Disabled Veteran broker dealer. Considering this past weekend’s controversies surrounding the NFL, rights, freedoms and respect of our flag, country, service men and women and first responders, I thought that perhaps we should all make it a point to see “Thank You For Your Service” at our local theatres when it’s released.  The ensemble cast tackles myriad veteran-focused situations, disorders and struggles pertinent to today’s public discourses.  The film overlays nicely with the Service Disabled Veteran mandate that we are all dedicated to here each and every day at Mischler Financial.

Here’s the preview:


Have a great evening and FIGHT ON!
Ron Quigley, Managing Director and Head of Fixed Income Syndicate


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

…..and here’s another look at last week’s day-by-day re-cap of key primary market driver averages for IG Corporates only followed by the prior six week’s averages:

WEEK 8/18
WEEK 9/11
WEEK 9/05
WEEK 8/28
WEEK 8/21
WEEK 8/14
New Issue Concessions 1.50 bps <0.39> bps 0.50 bps 0.75 bps N/A 0.62 bps 1.40 bps 2.12 bps 1.00 bp 0.72 bps 4.37 bps
Oversubscription Rates 3.10x 3.25x 2.39x 3.58x N/A 3.18x 3.27x 2.70x 2.95x 3.03x 3.25x
Tenors 8.14 yrs 11.79 yrs 3.30 yrs 15.08 yrs N/A 8.21 yrs 9.84 yrs 11.10 yrs 5.17 yrs 9.86 yrs 10.26 yrs
Tranche Sizes $414mm $531mm $281mm $625mm N/A $483mm $674mm $731mm $575mm $352mm $1,023mm
Avg. Spd. Compression
IPTs to Launch
<17.25> yrs <21.39> bps <14.75> bps <17.83> bps N/A <18.40> bps <18.91> bps <16.80> yrs <15.00> bps <19.67> bps <17.79> bps


New Issues Priced

Above is the opening extract from Quigley’s Corner aka “QC”  Monday, Sept 25 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 Debt Issuers of the Day-Mischler Comment