Quigley’s Corner 11.26.18 : Dominion Energy VEPCO Debt Deal Distilled

“From an ethical standpoint, serving those who sacrificed so much to serve us is the right thing to do.”
  – Thomas F. Farrell, II, Dominion Energy Chairman, President and CEO

Investment Grade New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points – Mischler Serves as Active Co-Mgr on Inaugural Deal for Dominion Energy’s VEPCO

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

Dominion Virginia Electric & Power Co. 30-year Deal Dashboard

Dominion Energy’s Virginia “Electric” & “Power-full” Diversity and Inclusion/Veteran Initiatives

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

The “QC” Geopolitical Risk Monitor

New Issues Priced

Indexes and New Issue Volume              

Global Market Recap

2018 Lipper Report/Fund Flows – Week ending November 21st    

IG Credit Spreads by Rating

IG Credit Spreads by Industry

IG New Issue Pipeline

IG M&A Pipeline Highlights

Economic Data Releases

Rates Trading Lab-Jim Levenson commentary

Tomorrow’s Calendar


Today the IG dollar DCM hosted 5 issuers across 6 tranches totaling $2.815b. The SSA space added NAB’s $1.15b 5-year covered bond bringing the all-in IG day totals to 6 issuers, 7 tranches and $3.965b.

Today was a test day of sorts for our IG Corporate dollar DCM.  Two utilities, a Yankee bank, a retail preferred and the stellar Harley Davidson industrial credit were safe bets to announce into this morning’s strong session open. There is quite a backlog of deals to come though.  Today’s visitors may be the very ones to pave the way for a robust week of issuance in what have been difficult markets. One deal that did do very well and priced into strong demand was Virginia Electric & Power Co’s. new 30-year. Talk about great timing.  The VIX or volatility index that I refer to as our market’s “fear factor” fell 12.17% today opening at 21.52 closing at 18.90. Somepeople in corporate finance made a great call today to decide to “Go!” If I’m writing about it you know that means Mischler was involved in it making VEPCO today’s Deal-of-the-Day. But before we take a deep dive into relative value and Dominion Energy’s incredible Veteran mandate let’s first……..  .take a look at the day’s numbers:

  • The IG Corporate WTD total is 15.13% of this week’s syndicate midpoint average forecast or $2.815b vs. $18.60b.
  • MTD we’ve priced 76.61% of the syndicate forecast for October IG Corporate new issuance or $65.145b vs. $85.04b.
  • There are now 29 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points – Mischler Serves as Active Co-Mgr on Inaugural Deal for Dominion Energy’s VEPCO

  • Brunswick Corp’s. $25 par 30NC5 Senior Notes due 1/15/2049 was increased to $115mm vs. $100mm at the tighter revised guidance of 6.625%. Thank you Captain Morgan!
  • Harley-Davidson Financial Services Inc. upsized today’s new long 2yr FRNs to $450mm from $350mm at the launch after skipping guidance.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 4 IG Corporate-only new issues that displayed price evolution was <8.00> bps.
  • Including today’s Brunswick 30NC5 $25 par Sr. Unsecured Notes new issue, average spread compression from IPTs thru the launch/final pricing of today’s 5 issuers was <7.65> bps.
  • BAML’s IG Master Index was unchanged at +138. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +131. (1.32 represents the high on 11/20; 0.85 is the post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +168 vs. +167. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $2.2b on Friday versus $12.2b on Wednesday (Thursday was a holiday) and $23.7b the previous Wednesday.
  • The 10-DMA stands at $15.6b.

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

IG Corporate New Issuance This Week


vs. Current
WTD – $2.815b
vs. Current
MTD – $65.145b
High-End Avg. $16.19b 17.39% $84.24b 77.33%
Midpoint Avg. $18.60b 15.13% $85.04b 76.61%
Low-End Avg. $21.00b 13.40% $85.84b 75.89%
The High $40b 70.37% $100b 65.14%
The Low $5b 56.30 $50b 130.29%


Virginia Electric & Power Co. 30yr Senior Notes

I am happy to announce that Mischler Financial Group, Inc., our nation’s oldest Service Disabled Veteran broker dealer, was named as an active 1.00% Co-Manager on today’s Virginia Electric & Power Co. 30-year Senior Notes new issue.  The announced “no grow” transaction helped open the doors to a more welcoming IG Corporate primary market place this morning after several weeks of volatility that left quite a backlog of potential issuers.  Dominion Energy’s Opco could not have timed the market better with this morning’s DOW pointing to an over 300 point opening to start the session.

Virginia Electric & Power Co. 30-year Deal Dashboard 

For relative value I looked to the outstanding Virginia Electric & Power (“D”) 3.80% Senior Unsecured Notes due 9/15/2047 that were 122/117 $88.272 pre-announcement.  After adjusting for the low dollar price on these, fair value came to ~7 bps NIC.

Here’s a look at spread compression during today’s VEPCO 30yr book build and all the pertinent details you want and need to know –

Trading at
the Break
30yr A2/A +145a +135a (+/-3) +132 +132 <13.00> 7 129/ <3>


………and here’s a snap shot of today’s 30yr Virginia Electric & Power Co. book sizes and oversubscription rates – the measure of investor demand:

VEPCO Issue Tranche Size Book
Final Book
30yr A2/A 1.85b 1.60 2.67x


Final Pricing – Virginia Electric & Power Co. 30yr Senior Notes
D $600mm 4.60% due 12/01/2048 @$99.435 to yield 4.635% or T+132  MWC +20

Dominion Energy’s Virginia “Electric” & “Power”-ful Diversity and Inclusion/Veteran Initiatives

I have been knocking on the doors of  Dominion Resources as a utility banker for a long time. The opportunity arrived today in the form of Mischler’s inaugural Co-Manager role on Virginia Electric & Power Co’s. 30-year transaction. Virginia Electric and Power Company (Virginia Power) operates under the Dominion Virginia Power and Dominion North Carolina Power brands and provides regulated electric delivery services to about 2.4 million homes and businesses. Power generation is derived by means of coal, gas, oil, hydro, and nuclear plants. The utility’s power plants (with 24,300 MW of generating capacity) are managed by the Dominion Generation unit of parent Dominion Energy. Control of Virginia Power’s transmission facilities is maintained by PJM Interconnection. Dominion Virginia Power also sells wholesale power to other users.

We have met with Dominion in San Francisco, Phoenix, Orlando, Dallas and of course, Richmond.  There is a lot of work that goes into covering massive issuers such as Dominion. Today, it was all well worth it; it’s all about getting that one door to open to show issuer’s what Mischler Financial brings to the table on deal day.  Yes, we offer daily DCM coverage; yes, we offer great back office operations, senior seasoned talent and strong capital, but we also offer a great certification as our great nation’s oldest broker-dealer owned and operated by Service Disabled Veterans. When we get the call to serve as an active Co-Manager, as we did this morning from Dominion, it’s our chance to bring new high quality accounts to an issuer’s investor profile. If there is no value-add, then there’s nothing, and the diversity space gets kicked back into a check-the-box mandate.

Well, Dominion has been cordial with their time and availability to hear our story and they opened their door to us today on deal day.  All of Team Mischler appreciates the opportunity to demonstrate our capabilities. But more than that; it’s also an opportunity for us to extol the virtues of all the great things that Dominion and its “opcos” are doing for our nation’s veteran men and women, and D&I in general.  So please take a few minutes to read about this wonderful corporate mandate that makes its way throughout Dominion – top down! As in all meaningful corporate mandates, Dominion’s Veteran/D&I procurement initiative begins in the offices of Thomas F. Farrell, II, Dominion Energy’s Chairman, President and CEO.  It has seamlessly made its way directly from his office to that of the Chief Financial Officer, right on over to Corporate Finance and Treasury – and it was executed with perfection today!

Also, a special shout out to all those loyal investors who collectively represented an “uber-high-quality” order book for us to present to Dominion Energy’s VEPCO Opco today.  You know who you are and your patronage is ALWAYS appreciated here.  As this represented Mischler’s inaugural transaction with any Dominion entity, it is a great day for the Mischler value-added proposition.  We’re glad to have been able to introduce a slew of new investors to VEPCO’s profile and we have you, our middle markets distribution network to thank for that! It all starts with an order so, we are much obliged to you all!

Dominion Energy Has a Long History of Supporting Our Military and Veterans

“From an ethical standpoint, serving those who sacrificed so much to serve us is the right thing to do.”
  – Thomas F. Farrell, II, Dominion Energy Chairman, President and CEO

Now let’s appreciate all the work Dominion Energy has done, is doing and will continue to do for our great service men and women and veterans:

Throughout its lengthy history of service to its communities, Dominion Energy has made support for the military, veterans and their families a priority. Beginning in World War I, when our employees sent soldiers care packages, and continuing until today, we have focused on those who serve our country.

Careers with Dominion Energy

Dominion Energy makes it a priority to recruit and retain military veterans in fact,  1 in 5 new hires is a Veteran

Dominion Strengthens It’s Communities

Dominion’s objective is to strengthen its network within the communities it serves and to support military service men and women, while developing the Company’s talent pipeline.

  • 100% salary differential for up to 5 years for deployed military employees.
  • Gives paid time off for Guard and Reserve duty on top of vacation and sick leave.
  • $5,000 Student Veteran Scholarship award recognizes 5 interns/co-ops for military service.
  • Veterans Resource Group – attracts and develops those who have served in the Armed Forces.

Troops to Energy Jobs Dominion Energy Troops to Energy Jobs

…….is designed to help veterans make a successful transition to a rewarding career in the energy industry. The website guides veteran users step by step in transferring their military training to a new energy job, identifying any additional education and credentials they may need, and supporting our nation’s heroes in their job searches by utilizing an interactive Troops to Energy Jobs ROADMAP.

Through Troops to Energy Jobs, Dominion Energy honors our nation’s veterans by connecting them with careers in the energy industry and also providing training and support for those jobs.

O*Net OnLine matches military occupations and skills to civilian jobs.

Dominion cares about the Military, Veterans, and their Families!


Dominion Resources and its Opco’s, such as Virginia Electric & Power Co. spearheaded initiatives to support veterans and their families, including installing access ramps, supporting wounded warriors, and weatherizing veterans’ homes.

Dominion Energy Charity Classic

The PGA Tour Golf Tournaments in 2016 and 2017 distributed more than $600,000 to veterans’ charities. What’s more – all military service members, veterans and their dependents received free admission and complimentary food and beverage.


Between 2015 and 2018, Dominion Energy and its Opcos, including Virginia Electric & Power Co., have provided bill assistance to over 2,300 veterans. 

Federal Energy Solutions

Dominion’s and VEPCO’s mission-critical service to help federal agencies meet energy-related goals has resulted in an Award for Excellence and recognition by the U.S. Army Corps of Engineers for outstanding performance.

Awards and Recognition

Dominion Energy is regularly honored with awards recognizing its employees’ innovation, leadership, and workplace engagement. This recognition generally reflects feedback provided by Dominion’s employees and others in its respective communities. I am pleased to highlight their impressive awards here:

Key Awards or 22 Reasons Why Dominion Energy and Its Opco’s Are “Best-in-Class” 

  • Forbes – Best Employers for Women – 2018
  • Fortune 500 – 2018
  • Forbes – America’s Best Large Employers – 2018
  • Forbes – Best Employer for Diversity – 2018
  • Diversity Richmond – 2018
  • Women’s Choice Award Best Company to Work for – 2018
  • Best for Diversity by Forbes – 2018
  • Richmond Times-Dispatch Top 5 Workplaces in Richmond – 2018
  • U.S. Department of Labor HIRE Vets Medallion Program – Platinum Award – 2018
  • The Next Move Program Pioneer Award – 2018
  • West Virginia Chamber of Commerce Five-Diamond Employer – 2018
  • G.I. Jobs Magazine “Military Friendly Employer” – since 2010
  • Virginia Department of Veterans Services’ Values Veterans Influencer award  – 2018
  • Virginia Department of Veterans Services’ Values Veterans Triumph award  – 2017
  • Virginia Department of Veterans Services’ Virginia Values Veterans Perseverando award – 2016
  • Department of Defense ESGR Extraordinary Employer Support award – 2016
  • Military Times “Best for Vets Employer” – since 2010
  • U.S. Veterans Magazine “Best of the Best” – since 2012
  • G.I. Jobs Magazine “Top Military Spouse Friendly Employer” – since 2012
  • ELECTRIC POWER Faraday award – 2014
  • Department of Defense ESGR Five-Star Freedom award recipient – 2008
  • Virginia ESGR Pro Patria award recipient – 2008

An Impressive Trophy Case Earned Through a Prolific Dedication to Community Service  

That right there folks is what I call veteran/diversity done right. When it relates to the world of Corporate Finance, Dominion makes sure it’s predicated upon a value-added proposition! ……and that’s all very good stuff!

Thanks for tuning in. Below find a synopsis of everything Syndicate & Secondary as seen from the perch of Mischler Financial’s Fixed Income Syndicate Desk.
Have a great evening!

Ron Quigley, Managing Director & Head of Fixed Income Syndicate

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

Above is the opening extract from Quigley’s Corner aka “QC”  Monday, November 26, 2018  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 primary 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: rquigley@mischlerfinancial.com 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* (*public domain information), Stone & McCarthy Research, 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.

Quigley’s Corner 11.26.18 : Dominion Energy VEPCO Debt Deal Distilled