Boeing Lands $25b 7-Part Debt Offering; Mischler Co-Manager

by | Apr 30, 2020 | Debt Market Commentary, Recent Deals

Boeing Company’s $25b 7-part Debt Offering Flies High, Wind in the Sail for a $300b Month for IG Corporate Debt Markets; all-time monthly record.

Quigley’s Corner 04-30-2020 : Investment Grade New Issues – IG Corporate-only DCM Breaks Thru $300b for April. Boeing’s $25b 7-Part Debt Offering 

Below is excerpted from today’s edition of Quigley’s Corner, authored and published by Ron Quigley, Mischler Financial Group Managing Director & Head of Fixed Income Syndicate

I have been heading a syndicate desk for a looooong time. I am dumbfounded.  I wrote to someone today that people not involved in syndicate will never really comprehend what pricing $300 BILLION in IG Corporate new issues in one month really means.  It is absolutely stunningly a ridiculously shocking number. We priced $300.64 billion in IG Corporate-only supply in the month of April 2020. I count split-rated credits as long as they are IG-rated by one of either Moody’s, S&P or Fitch. Last month, to be exact on Tuesday, March 31st, people were stunned to hear we priced an IG Corporate-only monthly volume total of $260.77b thereby crushing the old record of $172.383b set in January 2017 by $88.387b or 51.27%. Today, the very next month later, we beat March 2020 by $39.87b or 15.29%. Today April finished the month with $300.64b in IG Corporate-only supply an all-time monthly volume record.

…..and you know what that means! It means the all-in IG Corporate plus SSA number must’ve been HUGE as well……and it was also another record breaking month for all-in issuance of $368.54b. That’s IG Corporate plus SSA issuance or Sovereign, Supranational and Agency issuance. April reigns supreme!  What the heck could possibly be next?

 Today the IG Corporate dollar DCM hosted 10 issuers across 25 tranches totaling $39.80b led and dominated in historic 4th quarter dramatics by THE Boeing Company’s $25b 7-part. The deal represents the largest of 2020. Technically that massive $25b total transaction amount was out there on the tapes but without the tranches sized at 1:28pm ET. Technically the last deal launched in today’s session was Barclays PLC’s $1.75b 6nc5 fixed-to-floating rate Senior Notes new issue due 5/07/2026 with Barclays as sole lead manager. That’s actually the deal that broke the plane of the $300b goal line. Regardless congrats to all the syndicate desks out there.

  • The IG Corporate-only WTD total is 197.42% of this week’s syndicate midpoint average forecast or $87.775b vs. $44.46b.
  • MTD we’ve priced 280.16% of the syndicate forecast for April IG Corporate-only new issuance or $300.64b vs. $107.31b.
  • There are 11 new issues in the IG credit pipeline.

 

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

Green denotes surpassed estimates.
Red denotes missed estimates.

IG Corporate
New Issuance		 This Week
4/27-5/01		 vs. Current
WTD – $87.775b		 April
2020		 vs. Current
MTD – $300.64b
High-End Avg. $45.23b 194.06% $107.31b 280.16%
Midpoint Avg.  $44.46b 197.42% $107.31b 280.16%
Low-End Avg. $43.69b 200.90% $107.31b 280.16%
The High $56b (1) 156.74% $140b (1) 214.74%
The Low $30b (2) 292.58% $85b (1) 353.69%

 

IG Corporate Primary & Secondary Market Talking Points – Mischler Named Passive Co-Manager on The Boeing Company’s $25b 7-Part

*Denotes new high or low

  • Mischler Financial Group, Inc., our nation’s oldest Service Disabled Veteran owned and operated broker dealer is proud to announce that it was named a “passive” Co-Manager on today’s 3-, 5- and 7-year tranches of today’s historic $25b 7-part transaction. I should also let you know that Boeing included a total of 21 diversity co-managers. Hey……..all for one and one for all and on behalf of all the MBEs involved we thank you for that considerable show of support for diversity in your transactions. Given the sizeable amount of today’s transaction and the fact that mechanically syndicate desks are all working from home, there was no opportunity for distribution for all our investors who might be wondering.  Still, we are always grateful to be associated with such an illustrious issuer and we value our partnership with The Boeing Company. We appreciate our long value-added partnership and congratulate the entire treasury/Funding team on today’s new issue. Judging by the demand and size alone, the “BA” credit is alive and well and that’s a great thing for America.
  • The Boeing Company’s cumulative book total was ~55b making the deal 2.20-times oversubscribed.
  • For the week ended April 29th, Refinitiv Lipper U.S. Fund Flows reported an inflow of $2.253b into Corporate Investment Grade Funds (2020 net outflow of $56.375b) and inflows of $743m into High Yield Funds (2020 net inflow of $1.515b).
  • NVR Inc. upsized today’s 10-year Senior Notes transaction to $600mm from $500mm at the launch.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 25 IG Corporate-only new issue was <45.18> bps.
  • ICE BAML’s IG Index tightened 3 bps to +231 vs. +234.  (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 3 bps to 2.04 vs. 2.07. (1.57 represents the high on 1/03/2019; 0.85 is the post-Crisis low set on 2/01/2018).
  • Standard & Poor’s Investment Grade Composite Spread tightened 2 bps to +252 vs. +254. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $29.7b on Wednesday versus $26.4b on Tuesday and $25.7b the previous Wednesday.
  • The 10-DMA stands at $25.4b.
  • For the week ended April 22nd, Refinitiv Lipper U.S. Fund Flows reported an inflow of $2.148b into Corporate Investment Grade Funds (2020 net outflow of $58.628b) and inflows of $2.219b into High Yield Funds (2020 net inflow of $772m).

Above is the opening extract from Quigley’s Corner aka “QC” 04-30-2020 edition distributed via email to institutional investment managers, lead underwriter syndicate desks and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest diversity-certified broker-dealer owned and operated by Service-Disabled Veterans. 

The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of Mischler’s primary debt capital markets desk. Commentary 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 deal pipeline.To receive Quigley’s Corner, please email: [email protected] or via phone 203.276.6646 

*Sources: Bank of America/Merrill Lynch, Bloomberg, Bond Radar, Dow Jones Newswire, IFR, Informa Global Markets, Internal Mischler, ITC Markets, Market News International, Prospect News, Stone & McCarthy Research, Refinitiv, 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.