AIG Inc’s. $4.1b 3-Part 5-, 10- and 30-year Senior Notes New Issue Embraced by Fixed Income Investors; Day’s IG Debt Issuance Tops $28.6b from 15 Issuers
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
Quigley’s Corner 05-06-2020 : Investment Grade New Issuance Counts $28.6bil of new debt floated by 15 issuers.
Mischler Financial Group, Inc. was privileged and honored to have been invited to serve as an active Co-Manager on today’s $4.1b American International Group Inc. (Baa1/BBB+/BBB+) (s/s/n) SEC registered 3-part Senior Notes transaction. First and foremost, Team Mischler’s DCM desk extends thanks to AIG Treasury/Funding for our long standing and value-added partnership. We appreciate the opportunity to serve you today and always.
Proceeds from today’s transaction will be applied toward general corporate purposes, which may include the retirement of debt. Joint Global Coordinators and Joint Book Runners were Citigroup and J.P. Morgan who split B&D duties with the diversity firms. JPM guided the 5s and 10s with Citi handling the 30-year. I thank the Syndicate Teams at both firms for working with us today throughout the book build recognizing and appreciate their providing access and timely data exchanges and updates on a day that saw 26 tranches and $26.375bn in new IG Corporate new issues price. CITI served as a lead on 17 of today’s deals with JPM on 8 so, I understand the pressure, the chaos of deal day, all while many continue to work from home. A Mischler Five-Star salute to Wendy and Adnes at CITI and Mike and Nick at JPM.
………and here’s a snap shot of today’s final AIG Inc. book sizes and oversubscription rates – the measure of investor demand:
Today’s cumulative final book size was $8.4b or 2.05-times oversubscribed.
Here’s a look at book splits:
| AIG New Issue |
Tranche Size | Final Book Size |
Bid-to-Cover Rate |
| 3yr | $1.5bn | 4bn | 2.67x |
| 5yr | $1.6bn | 2.7bn | 1.69x |
| 10yr | $1bn | 1.7bn | 1.70x |
……and here’s a check of spread compression from IPTs thru the launch and final pricing, NICs and where the paper is currently trading.
| AIG New Issue |
Ratings | IPTs | GUIDANCE | LAUNCH | PRICED | SPREAD COMPRESSION |
NIC (bps) |
TRADING at the BREAK |
+/- (bps) |
| 5yr | Baa1/BBB+ | +240a | +215 # | +215 | +215 | <25> bps | 16 | 216/ | +1 |
| 10yr | Baa1/BBB+ | +285a | +270 # | +270 | +270 | <15> bps | 17 | 277/ | +7 |
| 30yr | Baa1/BBB+ | +300a | +300 # | +300 | +300 | 0 bps | 26 | 301/ | +1 |
AIG Inc. Final Pricing Details:
AIG $1.5bn 2.50% 6/30/25 @ $99.892 to yield 2.522% or T+21 MW+35
AIG $1.6bn 3.40% 6/30/30 @ $99.987 to yield 3.401% or T+270 MW+40
AIG $1bn 4.375% 6/30/50 @ $99.494 to yield 4.405% or T+300 MW+45
AIG ‘s Commitment to Diversity in Financial transactions
We also salute AIG for having been named yet again, one of Diversity Inc’s. Top 50 Companies for Diversity. Today’s three-part AIG transaction included 9 diversity-certified broker dealers canvassing the following certifications along with Mischler’s Service-Disabled Veteran broker dealer were our brethren in the space in the form of three African American-owned firms, one Hispanic-American boutique investment bank, two Veteran-owned firms, and one Woman-owned broker dealer. That shows commitment to diversity right there. I think it’s safe to say on behalf of all nine of those firms that we greatly appreciate our selection on today’s deal and the opportunity to demonstrate our capabilities.
Above is the opening extract from Quigley’s Corner aka “QC” 05-06-2020 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: rquigley@mischlerfinancial.com or via phone 203.276.6646
