Quigley’s Corner 05.08.19: Bristol-Myers Squibb (NYSE:BMY) $19billion 9-Part Bond Offering; a REALLY BIG DEAL!
Investment Grade New Issue Re-Cap – All About Bristol-Myers Squibb’s $19b 9-Part; Team Mischler serves as Active Co-Manager
Introducing the Largest New Issue of 2019 and the 9th Largest of All-Time: Bristol-Myers Squibb $19b 9-Part
Bristol-Myers Squibb Deal Dashboard
Today’s IG Primary & Secondary Market Talking Points
Mischler Memorial Day Month Pledge Announcement – Ties in Wonderfully with Today’s NYSE: BMY Transaction
NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches
New Issues Priced
Indexes and New Issue Volume
Syndicate IG Corporate-only Volume Estimates for This Week and May
Global Market Recap
QC Geopolitical Risk Monitor
2019 Lipper Report/Fund Flows – Week Ending May 1st
IG Credit Spreads by Rating
IG Credit Spreads by Industry
Economic Data Releases
Rates Trading Lab
Tomorrow’s Calendar
Investment Grade New Issue Re-Cap – All About Bristol-Myers Squibb’s $19b 9-Part; Team Mischler serves as Active Co-Manager!
Today the IG dollar DCM hosted 3 issuers across 11 tranches totaling $19.90b. The SSA space was quiet yet again but EIB announced a $3b “no grow” Global Notes transaction due 6/24/2024 slated to price tomorrow. But today was all about BMY’s jumbo deal and the fact that our great nation’s oldest Service Disabled Veteran Mischler Financial was involved in an active Co-Manager role. Before we visit BMY..
Let’s first review the primary market numbers for this week and month:
- The IG Corporate-only WTD total is 54.19% of this week’s syndicate midpoint average forecast or $22.45b vs. $41.43b.
- MTD we’ve priced 23.54% of the syndicate forecast for April IG Corporate-only new issuance or $29.15b vs. $123.83b.
- There are now 9 new issues in the IG credit pipeline.
Introducing the Largest New Issue of 2019 and the 9th Largest of All-Time: Bristol-Myers Squibb $19b 9-Part
Yesterday with the U.K. closed for May Day, it was not the right time for a jumbo trade. However, last Thursday and Friday, May 2nd and 3rd, Bristol-Myers Squibb Company (A3/A) asked its joint leads Barclays, Credit Suisse, Morgan Stanley and Wells Fargo to conduct fixed income investor calls in preparation for today’s $19 billion 9-part 144a transaction across the curve featuring 1.5s/2s/3yr FXD & FRNs/5s/7s/10s/20s and 30-year maturities. Morgan Stanley did the coordinating and announced the deal today. On January 3rd of this year Bristol-Myers Squibb (A2/A+) agreed to acquire cancer drug maker Celgene Corp. (Baa2/BBB+) in a cash-and-stock transaction totaling $74 billion. The transaction broadens the pharma’s pipeline. “BMY” will own 69% of “CELG” whose shareholders will retain 31%.
Thank yous are three-fold today readers. First, thank you to BMY VP/Treasurer, Jeffrey Galik for our inclusion on your new historic new issue. We greatly appreciate the opportunity to work with you, as well as your support of our nation’s veterans and service disabled veterans. Team Mischler was honored to serve on this very high profile transaction today. We also congratulate your firm on recognizing that a value-added proposition exists in the diversity broker dealer space. On behalf of Mischler and our minority BD compatriots, we all salute Bristol-Myers Squibb’s use of no less than 9 diversity firms. That’s right, alongside Mischler Financial were Academy, Blaylock, CastleOak, Drexel Hamilton, Great Pacific, MFR, Ramirez and Williams.
Finally, to our amazing middle markets distribution network: It all starts your trust in our ability to curate new debt issue opportunities. You are all “BlackRocks” to us, and it’s always easy to thank you each for your loyalty and patronage!
Bristol-Myers Squibb Deal Dashboard
Use of proceeds: from today’s transaction will be applied toward funding a portion of the aggregate cash portion of the merger consideration to be paid to Celgene shareholders in connection with the merger and to pay related fees and expenses. Any remaining proceeds for will be directed to general corporate purposes.
………and here’s a snap shot of today’s final BMY book sizes and oversubscription rates – the measure of investor demand:
Today’s cumulative book size was $64.03b or 3.37-times oversubscribed.Here’s a look at how the books were split:
| BMY Issue | Tranche Size | Final Book Size |
Bid-to-Cover Rate |
| 1.5yr FRNs | 750 | $2.0b | 2.67x |
| 2yr FXD | 1,000 | $2.5b | 2.50x |
| 3yr FRNs | 500 | $1.58b | 3.16x |
| 3yr FXD | 1,500 | $3.85b | 2.57x |
| 5yr FXD | 3,250 | $7.6b | 2.34x |
| 7yr FXD | 2,250 | $8.40b | 6.15x |
| 10yr FXD | 4,000 | $13.0b | 3.25x |
| 20yr FXD | 2,000 | $10.25b | 5.125 |
| 30yr FXD | 3,750 | $14.85b | 3.96x |
……and here’s a check of spread compression from IPTs thru the launch and final pricing, NICs, where the paper is currently trading:
| BMY Issue | Ratings | IPTs | GUIDANCE | LAUNCH | PRICED | SPREAD COMPRESSION |
NIC (bps) |
TRADING at the BREAK |
+/- (bps) |
| 1.5yr FRNs | A3/A | 3mL+30a | 3mL+22a (+/-2) | 3mL+20 | 3mL+20 | <10> | 0/flat | 3mL+18/ | <2> |
| 2yr FXD | A3/A | +50a | +37a (+/-2) | +35 | +35 | <15> | 0/flat | 32/30 | <3> |
| 3yr FRNs | A3/A | 3mL+equiv | 3mL+equiv | 3mL+38 | 3mL+38 | <17.5> | <1> | 3mL+36 | <2> |
| 3yr FXD | A3/A | +62.5a | +50a (+/-5) | +45 | +45 | <17.5> | <1> | 42/40 | <3> |
| 5yr FXD | A3/A | +85a | +75a (+/-2) | +73 | +73 | <12> | 8 | 71/69 | <2> |
| 7yr FXD | A3/A | +105a | +95a (+/-5) | +90 | +90 | <15> | 5 | 86/85 | <4> |
| 10yr FXD | A3/A | +120a | +110a (+/-5) | +105 | +105 | <15> | 5 | 101/100 | <4> |
| 20yr FXD | A3/A | +150a | +135a (+/-5) | +130 | +130 | <20> | 5 | 126/125 | <4> |
| 30yr FXD | A3/A | +160a | +150a (+/-5) | +145 | +145 | <15> | 7 | 139/138 | <6> |
Final Pricing – Bristol-Myers Squibb
| BMY $750m 11/16/20 FRN at 3mL+20, at 100
BMY $1bn 2.55% 5/14/21 99.842 2.632% T+35 MW+10. BMY $500m 5/16/22 FRN at 3mL+38, at 100 BMY $1.5bn 2.60% 5/16/22 99.731 2.694% T+45 MW+10. BMY $3.25bn 2.90% 7/26/24 99.612 2.980% T+73 MW+15. BMY$2.25bn 3.20% 6/15/26 99.728 3.243% T+90 MW+15. BMY $4bn 3.40% 7/26/29 99.175 3.496% T+105 MW+20. BMY $2bn 4.125% 6/15/39 99.658 4.150% T+130 MW+20. BMY $3.75bn 4.25% 10/26/49 99.158 4.300% T+145 MW+25 |
Today’s IG Primary & Secondary Market Talking Points
- Brixmor Operating Partnership 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 11 IG Corporate-only new issues was <16.09> bps.
- ICE BAML’s IG Index was unchanged at +118. Friday was a holiday. (It’s post-Crisis low is +90 set on 2/01).
- Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.13 vs. +1.12. (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 widened 2 bps to +157 vs. +155. (+125 represents its post-Crisis low set 2/02).
- Investment grade corporate bond trading posted a final Trace count of $12.4b on Monday versus $13.9b on Friday and $17.6b the previous Monday.
- The 10-DMA stands at $18.7b.
Syndicate IG Corporate-only Volume Estimates for This Week and May
| IG Corporate New Issuance | This Week 5/06-5/10 |
vs. Current WTD – $22.45b |
May 2019 |
vs. Current MTD – $29.15b |
| High-End Avg. | $42.26b | 53.12% | $124.48b | 23.42% |
| Midpoint Avg. | $41.43b | 54.19% | $123.83b | 23.54% |
| Low-End Avg. | $40.59b | 55.31% | $123.19b | 23.66% |
| The High | $51b (1) | 44.02% | $140b (2) | 20.82% |
| The Low | $35b (6) | 64.14% | $100b (2) | 29.15% |
Mischler Memorial Day Month Pledge Announcement – Ties in Wonderfully With Today’s BMY Transaction
Attention to all “QC” readers: Please take the time to read this special announcement from all of us here at Team Mischler.
To Bristol-Myers Squibb and all issuers who choose to do business with Mischler thru deal inclusions this month of May we thank you. You should all be proud and happy knowing that proceeds from your transactions this month will be put to good socially responsible use to help and assist our veterans and their families as well as for child cancer victims and research.
We are pleased to announce this year’s Mischler Memorial Day Month Pledge includes (3) special philanthropic missions. Thanks to issuers like Bristol-Myers Squibb
Mischler will be proud and honored to donate monthly May revenues to the following amazing organizations. You put us in your deal and we deliver on our best-in-class value-added proposition to contribute to your transaction. We’ll tell 3,500 high end financial services readers about your deal thru the “QC” to get your great story out there; we’ll introduce a host of new high quality investors to your profile and we’ll use some of what we earn from the deal to give back to our veteran community and general community as a whole. It’s a win-win-win folks, any which way you look at it.
In addition to our long-standing commitment to honor those who have served, those who have been injured in the line of duty, families of fallen veterans and families of service-disabled veterans, we’re also proud to support industry initiatives designed to combat life-threatening disease. We are grateful to each of our Fortune 500 Issuer clients and the broad universe of asset managers who look to and rely on Mischler to help you navigate the primary and secondary markets, and in turn, enable us to make the following philanthropic missions even more impactful.
Tee It Up For the Troops | Century Country Club, Westchester, NY. Tee It Up for the Troops is a 501c3 focused on leveraging golf events to raise funds for local veterans organizations. This organization has hosted over 475 fundraising events in more than 40 states across the USA, delivering over $10,000,000 to local veterans organizations that support our wounded warriors, as well as to national charities such as Fisher House Foundation and Warfighter Sports, a division of Disabled Sports USA. Donations now exceed more than $1 million annually. To learn more about Tee It Up for the Troops, click here
Johnny Mac Soldiers Fund 2019 Dallas Gala. Since 2014, Johnny Mac Soldiers Fund has awarded $7.5 million in scholarships to veterans and military family members, especially children of the fallen or disabled. There now nearly 1000 Johnny Mac Scholars attending schools all over the country. To learn more about Johnny Mac Soldiers Fund, click here
American Cancer Society 14th Annual Financial Services Cares Gala (FSCG). The Financial Services Cares Gala celebrates the financial services industry’s commitment to the fight against cancer, with a portion of the net proceeds going to support Hope & Heroes at Columbia University Medical Center to assist its cutting-edge programs and research for children’s cancer.
Marching Forward with Joint Strike Force GTS-Mischler: Mischler CEO Dean Chamberlain (SDV) will serve as advisor to GTS Veteran Analyst Program, a newly-created student-veteran internship program advanced by Mischler Financial Group strategic partner, Global Trading Systems (“GTS”). The inaugural launch for this program will include a special luncheon at the NYSE on May 21. In addition to Dean, guest speakers presenting at the luncheon will include senior executive officers of NYSE-listed corporations and Navy Reserve Rear Admiral John B. Mustin, former Deputy Commander, U.S. Second Fleet, and former Deputy Commander, Naval Surface Force Atlantic.
From the Top: A Special Message From Dean Chamberlain (SDV), Mischler Financial Group CEO and Principal; “Giving Back and Paying Forward is not merely an honor, it is part of our mission statement and a responsibility that remains front and center in the course of every initiative that Team Mischler is involved in.”
On behalf of Team Mischler, many thanks to our corporate, government and municipal Issuer clients, the many investment managers who look to Mischler’s primary and secondary market capital markets desk(s), and to our ECM and DCM Syndicate Desk partners for providing us the opportunity to help you and to help those in need as we pay tribute to Memorial Day.
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:
| KEY IG CORPORATE NEW ISSUE DRIVERS |
MON. 5/06 |
AVERAGES WEEK 4/29 |
AVERAGES WEEK 4/22 |
AVERAGES WEEK 4/15 |
AVERAGES WEEK 4/08 | AVERAGES WEEK 4/01 |
AVERAGES WEEK 3/25 |
| New Issue Concessions | 4.60 bps | <0.40> bps | 1.57 bps | 3.21 bps | <1.18> bps | <1.19> bps | 3.35 bps |
| Oversubscription Rates | 2.39x | 3.36x | 3.12x | 2.64x | 4.21x | 3.26x | 3.70x |
| Tenors | 22.00 yrs | 13.54 yrs | 14.25 yrs | 10.38 yrs | 8.04 yrs | 11. 27 yrs | 12.05 yrs |
| Tranche Sizes | $510mm | $713mm | $633mm | $1,338mm | $994mm | $9891mm | $934mm |
| Avg. Spd. Compression IPTs to Launch |
<15.90> bps | <16.24> bps | <18.42> bps | <15.66> bps | <21.53> bps | <21.06> bps | <19.37> bps |
New Issues Priced
Today’s recap of visitors to our IG dollar Corporate and SSA DCM:
I use the better two of Moodys, Fitch or Composite Ratings
IG
| Issuer | Ratings | Coupon | Maturity | Size | IPTs | GUIDANCE | LAUNCH | PRICED | LEADS |
| Bristol-Myers Squibb Co. | A3/A | FRN | 11/16/2020 | 750 | 3mL+30a | 3mL+22a (+/-2) | 3mL+20 | 3mL+20 | BARC/CS/MS/WFS |
| Bristol-Myers Squibb Co. | A3/A | 2.55% | 5/14/2021 | 1,000 | +50a | +37a (+/-2) | +35 | +35 | BARC/CS/MS/WFS |
| Bristol-Myers Squibb Co. | A3/A | FRN | 5/16/2022 | 500 | 3mL+equiv | 3mL+equiv | 3mL+38 | 3mL+38 | BARC/CS/MS/WFS |
| Bristol-Myers Squibb Co. | A3/A | 2.60% | 5/16/2022 | 1,500 | +62.5a | +50a (+/-5) | +45 | +45 | BARC/CS/MS/WFS |
| Bristol-Myers Squibb Co. | A3/A | 2.90% | 7/26/2024 | 3,250 | +85a | +75a (+/-2) | +73 | +73 | BARC/CS/MS/WFS |
| Bristol-Myers Squibb Co. | A3/A | 3.20% | 6/15/2026 | 2,250 | +105a | +95a (+/-5) | +90 | +90 | BARC/CS/MS/WFS |
| Bristol-Myers Squibb Co. | A3/A | 3.40% | 7/26/2029 | 4,000 | +120a | +110a (+/-5) | +105 | +105 | BARC/CS/MS/WFS |
| Bristol-Myers Squibb Co. | A3/A | 4.125% | 6/15/2039 | 2,000 | +150a | +135a (+/-5) | +130 | +130 | BARC/CS/MS/WFS |
| Bristol-Myers Squibb Co. | A3/A | 4.25% | 10/26/2049 | 3,750 | +160a | +150a (+/-5) | +145 | +145 | BARC/CS/MS/WFS |
| Brixmor Operating Part. LP | Baa3/BBB- | 4.125% | 5/15/2029 | 400 | +190a | +175a (+/-5) | +170 | +170 | CITI/JPM/MIZ/RBC |
| Principal Financial Group | Baa1/A- | 3.70% | 5/15/2029 | 500 | +150a | N/A | +130 | +130 | BAML/CITI/GS (a) + 4 (p) |
Indexes and New Issue Volume
Countable IG volume includes maturities of 18-months and out and IG-rated Preferreds.
*Denotes new high or low.
| Index | Open | Current | Change | |||
| IG32 | 58.589 | 60.883 | 2.294 | |||
| VIX | 15.44 | 19.32 | 3.88 | |||
| CT10 | 2.471% | 2.458% | <0.013%> | |||
| S&P | 2,932 | 2,884 | <48> | |||
| DOW | 26,438 | 25,965 | <473> | |||
| Nasdaq | 8,123 | 7,963 | <160> | |||
| OIL | 62.25 | 61.40 | <0.85> | |||
| GOLD | 1,281.10 | 1,284.43 | 3.33 | |||
|
USD |
IG Corporates |
USD |
Total (IG + SSA) |
|||
| DAY: | $19.90 bn | DAY: | $19.90 bn | |||
| WTD: | $22.45 bn | WTD: | $22.45 bn | |||
| MTD: | $29.15 bn | MTD: | $29.65 bn | |||
| YTD: | $458.419 bn | YTD: | $554.269 bn | |||
Global Market Recap
Above is the opening extract from Quigley’s Corner aka “QC” Tuesday, May 07, 2019 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.
