Quigley’s Corner 07.10.18 – Corporate Bond Issuers Return to IG Dollar Market; Toyota Drives DCM

Investment Grade Corporate Bond New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

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

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

New IG Corporate Bond Issues Priced

Indexes and New Issue Volume              

Global Market Recap

2018 Lipper Report/Fund Flows – Week ending July 4^th

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

Below is the opening extract from Quigley’s Corner aka “QC”  Tuesday,  July 10, 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 

Investment Grade New Issue Re-Cap

Today the IG dollar Corporate primary market finally awoke. It awoke not from a slumber but rather from a historic streak of sluggishness when considering 10 of the last 12 sessions produced an anemic $3.527b in total volume floated by US corporate bond issuers.  Today’s IG dollar DCM hosted 4 issuers across 7 tranches totalling $5.075b.  The SSA space added 2 issuers and 4 tranches for $7.50b bringing the all-in IG day totals to 6 issuers, 11 tranches and $12.575b. The all-in IG dollar pipeline saw three issuers clear trades today  – Toyota Motor Corp., EIB and JBIC while adding Nonghyup Bank to the forward schedule.  As a generalization, today’s prints were flat to tighter at the break conveying stability and attractive as opposed to aggressive pricing tactics and in line with IG credit spreads coming in the last couple of sessions – a sign of reassurance. We all know too well that the past two weeks’ issuance silence has been deafening as big FIGs lurk on the horizon to provide feed into voracious investor appetite for a new high-quality credit product.

Here’s a look at the WTD and MTD IG Corporate Bond Issuers’ new issue volume as measured against syndicate desk estimates:

• The IG Corporate WTD total is 28.07% of this week’s syndicate midpoint average forecast or $5.075b vs. $18.08b.
• MTD we’ve priced 6.22% of the syndicate forecast for June IG Corporate new issuance or $5.075b vs. $81.54b.
• There are now 20 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

• PacifiCorp upsized today’s 30.5-year FMB new issue to $600mm from $500mm at the launch after having skipped guidance.
• The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 7 IG Corporate-only new issues was <11.94> bps.
• BAML’s IG Master Index tightened 1 bp to +127 vs. +128. (It’s post-Crisis low is +90 set on 2/01).
• Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 2 bps to +120 vs. 1.22. (1.24 represents the high on 6/04; 0.85 is its post-Crisis low set on 1/30).
• Standard & Poor’s Investment Grade Composite Spread tightened 3 bps to +159 vs. +162. (+125 represents its post-Crisis low set 2/02).
• Investment grade corporate bond trading posted a final Trace count of $18.8b on Monday versus $7.6b on Friday and $11.6b the previous Monday.
• The 10-DMA stands at $15.6b.

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

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:

New Issues Priced

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Municipal Debt Deals-New Issue Calendar Week of July 9:  NYS Dormitory Authority Sales Tax Bonds…Mischler Muni Market Update looks back to last week’s muni bond issuance, municipal bond fund flow metrics and a focused lens on the muni bond new offerings for this week.  As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and muni bond market participants with a summary of the prior week’s municipal bond market activity, including credit spreads and money flows, and a look at pending municipal finance offerings tentatively scheduled for the most current week.

In advance of the update, a special shout-out to WSJ’s Heather Gillers for her July 9 article: “Municipal Bonds Are Scarce. That’s Good News for Borrowers.” 

Last week muni volume was about $0.2 billion. This week volume is expected to be $8.4 billion. The negotiated market is led by $668.7 million tax-exempt and taxable bonds for Trustees of the California State University. The competitive market is led by $1.8 billion tax exempt and taxable state sales tax bonds for Dormitory Authority of the State of New York on Wednesday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6676

During first half of 2018, and full years 2017 and 2016 alone, minority broker-dealer Mischler Financial Group Inc. underwriting roles (for which MFG has led, co-managed and/or served as selling group member) have included more than $625 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran-Owned Business Enterprise (SDVOBE).  Mischler Muni Market updates and Municipal Debt New Issuance outlooks are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

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Municipal Debt Deals-New Issue Calendar Week of June 25:  NYS Dormitory Authority Mental Health Bonds …Mischler Muni Market Update looks back to last week’s new issuance, muni bond fund flow metrics and a focused lens on the municipal bond offerings for this week.  As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and muni bond market participants with a summary of the prior week’s municipal bond market activity, including credit spreads and money flows, and a look at pending municipal finance offerings tentatively scheduled for the most current week.

Last week muni volume was about $6.4 billion. This week volume is expected to be about $5.3 billion. The negotiated market is led by $342.7 million mental health bonds (NYC Issue) for Dormitory Authority of the State of New York. The competitive market is led by $1.5billion Tax and Revenue Anticipation Notes on Tuesday and $335.7 million general obligation bonds in 3 bids on Wednesday for the City of Los Angeles, California.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

During first half of 2018, and full years 2017 and 2016 alone, minority broker-dealer Mischler Financial Group Inc. underwriting roles (for which MFG has led, co-managed and/or served as selling group member) have included more than $625 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran-Owned Business Enterprise (SDVOBE).  Mischler Muni Market updates and Municipal Debt New Issuance outlooks are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

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Quigley’s Corner 06.19.18: Despite Trade War Saber-Rattling, Bayer AG 15b Bond Issuance is Headache Free

Investment Grade New Issue Re-Cap – Despite Mounting Trade War Fears Bayer Prints Massive $15b 8-Part Jumbo!

Today’s IG Primary & Secondary Market Talking Points

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

Nina Chamberlain Places on USA Cadet National Women’s Water Polo Team

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

New Issues Priced

Indexes and New Issue Volume              

Global Market Recap

2018 Lipper Report/Fund Flows – Week ending June 13^th        

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

Economic Data Releases

Tomorrow’s Calendar

Investment Grade New Issue Re-Cap – Despite Mounting Trade War Fears Bayer Prints Massive $15b

U.S.-China trade tensions mounted with the latter imposing tariffs on U.S. commodities. Tariffs on U.S. oil alone amount to a $1b monthly clip. This, in response to Trump’s tariffs that took effect last Friday June 15^th in the form of 25% on $50b across 900 Chinese imports.  Emerging Markets currencies got hit and their bond yields widened as a result kicking off the session with 200 point loss on the DOW. Trump said last week that if China retaliates the U.S. will pursue additional tariffs. Trump’s tariffs are motivated by property rights violations in addition to new controls and restrictions.

Regardless, Bayer AG (Baa1/A-), as expected issued a blockbuster $15b jumbo transaction thru joint leads Bank of America/Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and J.P. Morgan. The German multinational pharmaceutical and life-sciences company priced the dollar-denominated 144a/REGS eight-tranche transaction across the curve.  Last week’s three days of investor calls wrapped up on Friday the 15^th. Bayer AG (Baa3/BBB+) agreed to buy Monsanto Co. (A3/A-) in a deal valued at $66 billion or $128 per share in cash – a 21% premium to Monsanto’s closing price on September 13^th, 2017.  It represents the M&A Pipeline’s largest deal of the year and is the single largest takeover by a German company. BAML, CS, GS, HSBC and JPM underwrote the $56.9b acquisition loan.

Meanwhile Walmart Inc. (Aa2/AA) had joint leads Barclays, Citigroup and J.P. Morgan conduct fixed-income investor calls today, Monday, June 18^th from 9:30am thru 5:00pm ET. Typically issuers are ready to print the day after.  Walmart will acquire 77% of Flipkart Group, India’s largest e-commerce company for $16b valuing the company at $20.8b. The largest companies need to compete on a scale with Amazon following its acquisition of Whole Foods.  Significant “chatter” from my sources indicates a ~$10b debt transaction across the curve slated for tomorrow.  That volume will only add to what’s expected to be a ~40b week of new IG Corporate supply. So, we may well see a total of at least $26b print between today’s Bayer and Duke Florida combined with tomorrow’s Walmart after just two days and there are 20 other issuers in the pipeline.

Today the IG dollar DCM hosted 2 issuers across 10 tranches totaling $16.00b and representing 42% of this week’s $38.16b midpoint syndicate volume forecast  The SSA space was quiet.

Here’s a look at the WTD and MTD IG Corporate new issue volume as measured against syndicate desk estimates:

• The IG Corporate WTD total is 41.93% of this week’s syndicate midpoint average forecast or $16.00b vs. $38.16b.
• MTD we’ve priced 86.89% of the syndicate forecast for June IG Corporate new issuance or $78.58b vs. $90.44b.
• There are now 21 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

• The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 10 IG Corporate-only new issues was <15.00> bps.
• BAML’s IG Master Index was unchanged at +121. (It’s post-Crisis low is +90 set on 2/01).
• Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.15. (1.16 represents a new high; 0.85 is its post-Crisis low set on 1/30).
• Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +155 vs. +154. (+125 represents its post-Crisis low set 2/02).
• Investment grade corporate bond trading posted a final Trace count of $13.7b on Friday versus $19.3b on Thursday and $13b the previous Friday.
• The 10-DMA stands at $17.3b.

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

Congratulations!
Nina Chamberlain Places on USA Cadet National Women’s Water Polo Team

Nina Chamberlain(l) USA Cadet National Women’s Water Polo Team

Every day we here at Team Mischler leave it on the floor. Some days we’re on deals, others we’re not. One thing we NEVER do, however, is fault our resolve or efforts therein because we expect to be the best each and every day and we know what is expected of us  – it’s who we are. It’s contagious here and equally so in our respective home lives – the ones that matter most to us all.

Case in point, our fearless leader and CEO Dean Chamberlain’s daughter Nina achieved some well-deserved national attention and recognition today that I’d like to share with you all.

The center of gravity American water polo is California, but this year Greenwich represented the rest of the country by placing an astonishing three athletes on USA National Teams. This historic achievement continues the recent water polo trend started by the Greenwich YMCA standout Thomas Dunstan, who made the 2016 Olympic team and now plays for USC. Last year, Kayla Yelensky represented the USA in the Youth Pan American games. This year the trend continued for both the boys and girls teams in several age groups.

Out of thousands of players trying out for the USA National Water Polo Age-Group Teams, only 22 players in the country make the various National team (Development, Cadet & Youth).

Gavin West, a 14-year-old 8th grader at Brunswick, was one of only two cadets (15U) outside California to make the team. He will be the first representatives from the Eastern Zone in 7 years.  Patrick Mullen,a 13 year old 7th grader at Greenwich Country Day School was the only Eastern representative on the Development team (14U).  Nina Chamberlain, a 14-year-old Freshman at Greenwich High School, made the girls cadet team (15U) as the only Eastern representative from the team.

In total, there were more male national team athletes from Greenwich than all non-California states combined. This speaks to the growing participation at young ages and the quality of the local coaching at the Greenwich YMCA under Head Coach Ulmis Lordache.

“All three athletes have worked really hard over the last four years and it is a top honor to be selected for the National team,” said Iordache. ” Our entire club is so proud of them.” All three will continue their training with the National Team in California over the summer. *Reprinted from the Greenwich Free Press June 16, 2018

Congratulations Nina! This is a great accomplishment for you as well as for women athletics and our great nation!

Below find a synopsis of everything syndicate and secondary from the day’s IG debt capital markets as seen from the perch of Mischler’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

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Quigley’s Corner 06.14.18 – GM Drives Debt Capital Markets Deal Deal; In Step With Vets

Investment Grade New Issue Re-Cap – Push Me, Pull You – Our Inextricably Global Linked World Economy

Today’s IG Primary & Secondary Market Talking Points

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

General Motors Financial Co. Inc. $1bn 5-year Senior Notes due 6/19/2023

General Motors Financial Co. Inc. Deal Dashboard

General Motors Diversity & Inclusion Starts From the Top Down

The “QC” Geopolitical Risk Monitor

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

New Issues Priced

Indexes and New Issue Volume 

Global Market Recap

2018 Lipper Report/Fund Flows – Week ending June 6^th 

IG Credit Spreads by Rating

IG Credit Spreads by Industry 

New Issue Pipeline

M&A Pipeline Highlights – $596.02 Billion in Cumulative Enterprise Value

Economic Data Releases

Rates Trading Lab

UST Resistance/Support Table

Tomorrow’s Calendar

ECB President Mario Draghi announced that the European monetary body voted to stop its massive bond-buying program though assuring markets that rates will remain unchanged thru the summer of 2019. The bond purchase program will end in December which caused European equity markets to surge 1.10% on average as the dollar gained against the single currency. Draghi also “warned” against U.S. trade tariffs. Draghi was stern in declaring that trade negotiations have to take place within the “existing multilateral framework.” He pointed out that the framework in question was developed post World War II creating prosperity throughout Europe that could be undermined by trade wars. That’s rather ominous coming from the ECB head. Considering the new world order’s multiple “bad players” I’d be more reasonable on trade negotiations and much more concerned about the defense and protection of my continent and what surly customers might decide to turn off their gas pipelines to Eastern Europe in the middle of February. It’s been done before and nothing should surprise anyone anymore.

With the days of easing money coming to end, Emerging Markets currencies are set up to take a hit much like Argentina’s peso did today plunging 6.1% to $27.70 per dollar, a record low. 

Today the IG dollar DCM continued rocking and rolling following its FOMC hiatus yesterday hosting 10 issuers across 18 tranches totaling $12.35b.  The SSA space was quiet.
Today’s largest deal was UnitedHealth Group’s $4b 5-part but the Deal-of-the-Day belongs to General Motors Financial Co. Inc. You know why right?  That’s right………because Mischler Financial, the nation’s oldest SDVBE was involved.

But before we get to that deal drill down and GM D&I segment, let’s first recap the day..

Here’s a look at the WTD and MTD IG Corporate new issue volume as measured against syndicate desk estimates:

• The IG Corporate WTD total is 120.10% of this week’s syndicate midpoint average forecast or $24.62b vs. $20.50b.
• MTD we’ve priced 69.20% of the syndicate forecast for June IG Corporate new issuance or $62.58b vs. $90.44b.
• There are now 18 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

• Deutsche Telkom International Finance BV upsized its 144a/REGS two-part Senior Notes new issue to $1.75b from $1.5b at the launch.
• The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 16 IG Corporate-only new issues – that displayed spread compression – was <14.84> bps.
• BAML’s IG Master Index tightened 1 bp to +121 vs. +122. (It’s post-Crisis low is +90 set on 2/01).
• Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.15. (1.16 represents a new high; 0.85 is its post-Crisis low set on 1/30).
• Standard & Poor’s Investment Grade Composite Spread was unchanged at +153. (+125 represents its post-Crisis low set 2/02).
• Investment grade corporate bond trading posted a final Trace count of $20.4b on Wednesday versus $19.6b on Tuesday and $19.2b the previous Wednesday.
• The 10-DMA stands at $17.9b.

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

General Motors Financial Co. Inc. $1bn 5-year Senior Notes due 6/19/2023

Mischler Financial is very happy to announce that it was invited to serve as an active 0.50% active Co-Manager on today’s $1b 5-year Senior Notes new issue for General Motors Financial Co. Inc. We appreciate the opportunity to serve GM.  

In terms of relative value, I looked to the outstanding GM Financial 3.70% due 5/09/2023 that was G+133 pre-announcement pegging NIC on today’s new print at T+137.5 as 4.5 bps.

Use of proceeds: added to the general funds of GM Financial and will be available for general corporate purposes.

General Motors Financial Co. Inc. Deal Dashboard

………and here’s a snap shot of today’s final General Motors Financial Co. Inc. book size and oversubscription rate – the measure of investor demand:

Today’s General Motors Financial Co. Inc. final order book finished at $3.10b making the $1b 5-year Senior Notes transaction 3.1-times oversubscribed. “At the top” or at guidance, the book was $4.0b. Clearly a highly successful transaction on a day in which 10 issuers tapped the IG dollar DCM pricing 18 tranches between them!

Our Mischler five-star salute goes out to Team General Motors Treasury/Funding on this – Flag Day – especially Anne. I enjoyed speaking with you today and appreciated your accessibility and feedback! But I can’t stop there………..

Last but NEVER least hats off to the best darn middle markets distribution network out there.  You’re all great and I/we appreciate your loyalty and patronage on each and every deal.  

Final Pricing – General Motors Financial Co. Inc.
GM $1b 4.15% due 6/19/2023 @$99.852 to yield 4.183% or T+137.5  MWC +25

General Motors Diversity & Inclusion Starts From the Top Down

We know General Motors embraces a diverse work force. They always have. The difficulty comes in sustaining such great programs and the challenge is growing and expanding them.  These mandates begin from the top down and that means from the office of Chairman and CEO, Mary Barra. In fact, GM’s new Chief Financial Officer Dhivya Suryadevara starts in her new role on September 1^st. Now THAT is what I call a value-added diversity and inclusion proposition literally starting from the top down. Bravo General Motors!

GM celebrates the unique perspectives it gains from its global employees. Its workforce provides a wide-array of diverse backgrounds and experiences and it’s their contributions that place GM at the forefront of innovation.  By embracing a diversity of thought, GM is able to develop mobility solutions that meet the needs of a rapidly changing global society and move humanity into the future.

To learn more about General Motors D&I please click on this link for GM’s 2017 Diversity and Inclusion Report:
http://www.gmsustainability.com/pdf/downloads/GM_Diversity_and_Inclusion.pdf

More to the core of our shared ethos here at Mischler Financial Group, Inc., our great nation’s oldest Service Disabled Veteran broker dealer, are some more specifics about the wonderful initiatives taken by General Motors to help our men and women in uniform – those that are prepared to make the ultimate sacrifice for us all.

Below please find a synopsis of today’s DCM data as curated by the Investment Grade Syndicate Desk at Mischler Financial Group. Have a great evening!

Ron Quigley, Managing Director and Head of Fixed Income Syndicate

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 Wednesday’s session followed by the averages over the prior six weeks:

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Quigley’s Corner 06.06.18 – 17 Issuers, 29 Tranches $11b in New Issuance; Mischler Financial Tribute to D-Day

Investment Grade New Issue Re-Cap – WTD IG & SSA Issuance Matches 2018 High as 54 Tranches Price in 3 Sessions!

Today’s IG Primary & Secondary Market Talking Points

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

Remembering D-Day

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

The “QC” Geopolitical Risk Monitor

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

New Issues Priced

Indexes and New Issue Volume 

Global Market Recap

2018 Lipper Report/Fund Flows – Week ending May 30^th        

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar     

Today the IG dollar DCM continued rolling along hosting 8 issuers across 14 tranches totaling $7.20b.  The SSA space added KfW’s $4b 2-year Global Notes new issue bringing the all-in IG day totals to 9 issuers, 15 tranches and $11.20b. Week to date we have now priced 54 tranches matching the 2018 weekly high after only three sessions and including 2 IG rated preferreds and 2 SSA issues.

Here’s a look at the WTD and MTD IG Corporate new issue volume as measured against syndicate desk estimates:

• The IG Corporate WTD total is 132.53% of this week’s syndicate midpoint average forecast or $33.45b vs. $25.24b.
• MTD we’ve priced 37.65% of the syndicate forecast for April IG Corporate new issuance or $34.055b vs. $90.44b.
• There are now 14 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

• NiSource Inc. upsized today’s 144a/REGS $1,000 par PerpNC5 transaction to $400mm from $350mm 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 14 IG Corporate and Preferred-only new issues was <14.07> bps.
• BAML’s IG Master Index widened 1 bp to +121 vs. +120. (It’s post-Crisis low is +90 set on 2/01).
• Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.15 vs. +1.14 thereby tying its high. (0.85 is its post-Crisis low set on 1/30).
• Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +153 vs. +152. (+125 represents its post-Crisis low set 2/02).
• Investment grade corporate bond trading posted a final Trace count of $18.3b on Tuesday versus $16b on Wednesday and $21.9b the previous Tuesday.
• The 10-DMA stands at $17.4b. 

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

Remembering D-Day and the Greatest Generation: 74 years Ago Today

Today marks the 74th anniversary of Operation Overlord, the Allied invasion of Normandy, most commonly known as D-Day. An epic multinational amphibious and airborne operation, D-Day forged partnerships and reinforced trans-Atlantic bonds that remain strong to this day. U.S. service members from 20 units in Europe and the United States have commemorated the D-Day anniversary over the past week in almost 40 locations throughout the Normandy region.

Never forget!

Have a great evening!
Ron Quigley, Managing Director & Head of Fixed Income Syndicate

*Normandy – American Cemetery

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 Tuesday’s session followed by the averages over the prior six weeks:

New Issues Priced

Today’s recap of visitors to our IG dollar Corporate and SSA DCM:

Please Note: for ratings I use the better two of Moody’s, S&P or Fitch.

IG

SSA

Indexes and New Issue Volume              

Countable IG volume includes maturities of 18-months and out and IG-rated Preferreds.

*Denotes new high or tight.

Global Market Recap

• USTs were sold; the yield curve steepened – T2 +2, T5 +4, T10 +4, T30 +4.
• Overseas Bonds: EU, Gilts & Peripherals sold.  Asia flat.
• SOFR: -0.05 to 1.75 vs. 1.80.
• 3mth Libor: +0.006 to 2.319 vs. 2.313%.
• Overseas Stocks: Asia up Europe mostly red except the CAC.
• Currencies: DXY Index -0.241 to 93.635 vs. 93.876.
• CDX HY: -3.363 to 338.194 vs. 341.557.
• CDX EM: -0.287 to 171.909 vs. 172.196.

*Index levels are as of 5:00PM ET today.

2018 Lipper Report/Fund Flows – Week ending May 30^th             

• For the week ended May 30^th, Lipper U.S. Fund Flows reported a net inflow of $848.978m into Corporate Investment Grade Funds (2018 YTD net inflow of $43.822b) and a net outflow of $17.869m from High Yield Funds (2018 YTD net outflow of $15.138b).

• Over the same period, Lipper reported a net inflow of $274.880m from Loan Participation Funds (2018 YTD net inflow of $7.156b).

• Emerging Market debt funds reported a net inflow of $27.322m (2018 YTD inflow of $1.990b). 

IG Credit Spreads by Rating

The 10-day IG spread performance vs. the T10 across the ratings spectrum and how IG compared versus high yield:

Spreads across the four IG asset classes are 24.50 bps wider versus their new post-Crisis lows

*Denotes new post-Crisis low

IG Credit Spreads by Industry

…….and a snapshot of the major investment grade sector credit spreads for the past ten sessions:

Spreads across the major industry sectors are an average 31.42 bps wider versus their post-Crisis lows!
*Denotes new post-Crisis low!

New Issue Pipeline

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Quigley’s Corner 06.04.18: Investment Grade DCM New Issue Market: Goldman Sachs Bank USA Debt IPO

Investment Grade New Issue Re-Cap – IG Dollar DCM on Fiyaaahhhhhh!!

Today’s IG Primary & Secondary Market Talking Points

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

Goldman Sachs Bank USA Inaugural $1bn Debt IPO – 2yr 3(a)2 Exempt Senior Unsecured Notes due 6/05/2020

Goldman Sachs Bank USA Deal Dashboard

Goldman Sachs Bank USA – Commitment to Diversity & Inclusion

The “QC” Geopolitical Risk Monitor

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

New Issues Priced

Indexes and New Issue Volume              

Global Market Recap

2018 Lipper Report/Fund Flows – Week ending May 30^th        

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab Tomorrow’s Calendar

So, how brilliant is Moody’s Corp. and our friend Zeeshan Naqvi for timing last Friday’s Moody’s Corp. issuance?  Looks like it’s opened up a whole new world for our IG dollar DCM as 10 issuers priced 16 tranches today totalling $9.95b.  The SSA space was quiet again. What’s more The Goldman Sachs Group, Inc. will now be issuing any tenors 3-years and in thru their new entity – Goldman Sachs Bank USA that issued its debt IPO in today’s session.  As a result, it is the session’s Deal-of-the-Day as Mischler, the nation’s oldest Service Disabled Veteran broker-dealer is proud to have been selected as an active Co-Manager on the inaugural issuance.

We greatly appreciate that Team GS Treasury/Funding and Syndicate!  I’ll also be featuring a nice segment about the wonderful initiatives that Goldman Sachs has been focused on for our nation’s veterans. It highlights GS’s Integration Program, involvement with VOWS, Networking and Mentorship, the Goldman Sachs Gives program and a bit about Goldman’s Community Teamworks.

But before the relative value exercise, book build review and Veteran Diversity Initiative at the House of Gold, let’s first review the day:

Here’s a look at the WTD and MTD IG Corporate new issue volume as measured against syndicate desk estimates:

• The IG Corporate WTD total is 39.42% of this week’s syndicate midpoint average forecast or $9.95b vs. $25.24b.
• MTD we’ve priced 11.67% of the syndicate forecast for April IG Corporate new issuance or $10.555b vs. $90.44b.
• There are now 18 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

• PSEG Power LLC increased today’s 5-year Senior Notes new issue to $700mm from $600mm at the launch and at the tightest side of guidance.
• Puget Sound Energy Inc. upsized today’s 30-year FMBs to $600mm from $500mm 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 16 IG Corporate-only new issues was <13.375> bps.
• BAML’s IG Master Index tightened 1 bp to +121 vs. +122. (It’s post-Crisis low is +90 set on 2/01).
• Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +1.15. (1.15 represents a new high. 0.85 is its post-Crisis low set on 1/30).
• Standard & Poor’s Investment Grade Composite Spread tightened 2 bps to +153 vs. +155. (+125 represents its post-Crisis low set 2/02).
• Investment grade corporate bond trading posted a final Trace count of $16b on Friday versus $22.5b on Thursday and $6.9b the previous Friday.
• The 10-DMA stands at $16.8b. 

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

Goldman Sachs Bank USA Inaugural $1bn Debt IPO – 2yr 3(a)2 Exempt Senior Unsecured Notes due 6/05/2020

Mischler Financial is very happy to announce that it was invited to serve as an active 0.50% active Co-Manager on today’s $1b 3-year 3(a)2 Exempt Senior Unsecured Notes new issue for Goldman Sachs Bank USA.  This represents the issuer’s inaugural debt transaction (IPO) and as a result, it’s also Mischler’s first Co-Manager role for this new GS Bank USA entity.

In terms of the relative value approach to today’s issuance I looked at another stalwart U.S. six-pack with its own healthy and historic brand of D&I procurement initiatives making for a nice comparable on myriad levels namely Citigroup NA’s $2bn 3.05% Senior Unsecured Bank Notes due 5/01/2020 and also rated A1/A+ that priced this past March 23^rd. They were G+63 bid with no differential between Goldman and Citi 3-year paper and with the 5-year Holdcos about a nickel or 5 bps between them. That would peg a new GS 2-year at anywhere from G+63-68 so, let’s split the difference to get us to G+65.5 landing NIC on today’s new Goldman Sachs Bank USA issue that priced at T+70 as 4.5 bps.

Goldman Sachs Bank USA Deal Dashboard

Use of proceeds from today’s transaction will be used for general corporate purposes.

………and here’s a snapshot of today’s final Goldman Sachs Bank USA book size and oversubscription rate – the measure of investor demand:

Today’s Goldman Sachs Bank USA final order book finished at $4.20b making the $1b debt IPO 2-year 3(a)2 Exempt Senior Unsecured Notes transaction 4.20x-times oversubscribed. “At the top” or at guidance, the book also happened to top out at the same $4.20b level. That’s right folks, please note it is an exceedingly rare occasion for our IG dollar DCM to feature a new issue that had “NO DROPS” between the book at the top and the final book size.  A clear indicator of a highly successful transaction.  Congrats to the Goldman Sachs Bank USA A-Team formerly known as the Goldman Sachs A-Team!!!

Final Pricing – Goldman Sachs Bank USA
GS $1b 3.20% due 6/05/2020 @$99.977 to yield 3.212% or T+70  MWC +15

Goldman Sachs Bank USA – Commitment to Diversity & Inclusion

You all read here time and time again the wonderful D&I initiatives created by and applied by the largest corporations who issue bonds in our financial services industry. If Mischler is involved, I’m getting YOUR story out there.  Today it is Goldman Sachs’ turn and what a story it has historically been with Team GS and their commitment not only to social responsibility but to Veteran causes.  It is always my privilege and honor to help get Goldman’s story to YOU and to Main Street.  It’s only one week detached from Memorial Day and given that the other two diversity Co-Managers were Veteran-owned and operated firms (Academy and Drexel) I would say this is a nice representative Memorial Day transaction of sorts for the Golden Ones at Team GS in honor of our nation’s heroes.

I ask you to please take a moment to read about just some of the wonderful ways that Goldman Sachs helps our nation’s men and women in uniform and our service-disabled veterans, all who were and are prepared to make the ultimate sacrifice so we can do what we do here in the Land of the Free thanks to the Home of the Brave.

Thank you Team GS.  (Jonny, Jane, Jess, Gaurav, Jason, Liz, Tony, Katie et al).  You make a difference in our veterans’ lives and you help our great nation’s oldest Service Disabled Veteran broker-dealer grow in a more meaningful and sustainable way.  Thank yous also go out to our loyal accounts who likewise aren’t just helping us all execute good business in a value-added way but who are also helping us give back a share of those profits to veteran causes. You all know who you are and we appreciate each of you.
Veterans Integration Program

The two-month Goldman Sachs Veterans Integration Program (VIP) provides service men and women exiting the military with an opportunity to develop their professional skills, strengthen their understanding of financial services and prepare for careers in the industry.

Veterans know what it takes to be a part of a team. Goldman Sachs is proud to have them on theirs.

Skills that are second nature to military veterans like leadership, teamwork and problem solving are in high demand in our industry – and Goldman Sachs considers these traits invaluable.

Launched in 2012, the Goldman Sachs Veterans Integration Program (VIP) provides service men and women exiting the military with an opportunity to develop their professional skills, strengthen their understanding of financial services and prepare for careers in the industry.

The program enables Goldman Sachs to recruit talented troops who are transitioning from the military to the civilian workforce. Goldman Sachs encourages those who have completed at least one year of active military service and demonstrate an interest in financial markets to apply.

Outside of their day-to-day responsibilities, participants complete a curriculum including a series of trainings on financial markets and products, networking opportunities and events with Goldman Sachs leaders who share career experiences and insights into the firm’s culture. While in the program, each VIP participant is paired with a peer buddy and a mentor from the Goldman Sachs Veterans Network.

Veterans On Wall Street (VOWS)

Goldman Sachs co-founded Veterans on Wall Street (VOWS), an initiative that helps former and current military personnel discover career opportunities in finance. On November 10, 2015, Goldman Sachs hosted the fifth annual VOWS Symposium and Hiring Fair.

Networking and Mentorship

The Goldman Sachs Veterans Network recruits talented troops and fosters their professional development at the firm. The network also advises on military-related engagements – with nonprofits, veteran-owned businesses and the community – to ensure that Goldman Sachs is a military employer-of-choice and a corporate leader in veterans’ affairs.

Goldman Sachs Gives 

Goldman Sachs Gives (GSG) funded a network of nonprofits whose mission is to reintegrate wounded and disabled veterans. The initiative focuses on job placement and readiness, and family support and counseling.  Partners include: The Mission Continues, offering service-based fellowships to veterans; Vets Prevail, providing mental health counseling and resources; and Team Rubicon, deploying returning veterans to assist in disaster relief. 

Goldman Sachs Gives is committed to fostering innovative ideas, solving economic and social issues, and enabling progress in underserved communities globally. Through a donor-advised fund, Goldman Sachs’ current and retired senior employees work together to recommend grants to qualifying nonprofit organizations to help them achieve their goals.

Community Teamworks

As part of Community TeamWorks, the people of Goldman Sachs support veterans through team-based volunteer projects around the world. In 2015, 550 volunteers contributed 3,500 hours to help 1,300 veterans and their families.

So, when I write here in the “QC” that D&I is in a corporation’s DNA, the aforementioned is a perfect illustration of exactly what that means.

The “QC” Geopolitical Risk Monitor

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Municipal Debt Deals-New Issue Calendar Week of June 4 : Week’s Muni Bond New Issue Volume Approaching 2018 Record…Mischler Muni Market Update looks back to last week’s new issue and muni bond fund flow metrics and provides a focused lens on the muni bond offerings for this week.  As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and muni bond market participants with a summary of the prior week’s municipal bond market activity, including credit spreads and money flows, and a look at pending municipal finance offerings tentatively scheduled for the most current week.

Last week was holiday shortened and muni volume was about $2.2 billion. This week volume is expected to be about $9.6 billion. The negotiated market is led by $1.2 billion bonds for California Municipal Finance Authority for the LINXS APM Project. The competitive market is led by $423.8 million bonds for New Mexico Finance Authority on Thursday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

During Q1 2018, and full years 2017 and 2016 alone, minority broker-dealer Mischler Financial Group Inc. underwriting roles (for which MFG has led, co-managed and/or served as selling group member) have included more than $625 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran-Owned Business Enterprise (SDVOBE).  Mischler Muni Market updates and Municipal Debt New Issuance outlooks are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

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Mischler Financial Group Friends, Family Members and Clients all know that we are a long-time supporter of carefully-vetted organizations whose mission is to support SDVs, their families and military veterans who have earned the right to have the same opportunities that we seek for ourselves.

One of those organizations that we are proud to support is The Army-Ranger Lead the Way Fund,  a 501(c)(3) established in honor of Sgt. James Regan, a hero from Manhasset NY who was killed in action  in Feb 2007 while serving in Iraq. Prior to enlisting in the US Army in 2004, Jimmy was a scholar-athlete at Duke University, and instead of going to Wall Street upon graduation-where he had multiple opportunities available to him, Jimmy “joined up.” In short order, Jimmy became an elite member of the 75th Ranger Regiment and served two tours of duty in Afghanistan before he was killed by an IED while stationed in Iraq. The Lead the Way Fund was then established to raise funds in support of disabled U.S. Army Rangers and the families of Rangers who have died, been injured or are currently serving in harm’s way.

To illustrate the impact of “Lead The Way Fund”, below notification from Lead The Way’s Founder Jim Regan, Sr., profiles the most recent ‘mission success’ attributed to Lead the Way Fund and it is one that we’re honored to share.

Dear Friends of Army Ranger Lead The Way Fund,

I wanted to take this brief opportunity to let you know that on May 31, 2018 Army Ranger Lead The Way Fund, along with our partner Jared Allen’s Homes for Wounded Warriors, had the privilege of presenting MSG (Ret.) Chris Corbin with the keys to his custom built, completely accessible and mortgage-free home in Fayetteville, North Carolina.  It was a very exciting day for Army Ranger Lead The Way Fund and, of course, for Chris and his new bride.

In 2014, Army Ranger Lead The Way Fund was introduced to Jared Allen’s Homes for Wounded Warriors, who joined us on this incredible journey when we first collaborated to present SFC (Ret.) Cory Remsburg with his state-of-the-art home. It is our continued hope that, together, these “Homes that Heal” provide our Rangers and their families with the comfort, sense of stability, and, most of all, independence they deserve for their sacrifices.

We are within three weeks of breaking ground on a home for SGT (Ret.) Tom Block (Wounded in Action, Afghanistan, October 2013) in New Hampshire and about a month away from breaking ground on a home for SGT (Ret.) Travis Dunn who was paralyzed on a mission in Afghanistan in December 2014.  SGT (Ret.) Josh Hargis (Wounded in Action, Afghanistan, Oct. 2013) will be receiving a home in North Carolina in 2019.

As you can see, we are quite busy here at Army Ranger Lead The Way Fund and are only picking up steam ensuring that the needs of our Ranger families do not go unmet. We are incredibly grateful for all of the support and involvement you have shown us through the years and are able to make things happen for them because of your continued dedication.

I also hope you will Save the Date and join us at our Gala on Monday, September 24^th at Pier Sixty in NYC where we will be honoring General Joseph Votel, Commander, CENTCOM and Mr. Steven Cohen, Founder, Cohen Veterans Network & Cohen Veterans Bioscience / Chairman & CEO, Point72 Asset Management, with our SGT James J. Regan Lifetime Achievement Award for their service to our Nation and to our military.

We could not do any of this without you and your unwavering support.  From the bottom of our hearts, we thank you.

Rangers Lead The Way!

Jim Regan

Mischler Financial Group is the financial industry’s oldest, fully-certified minority investment bank-institutional brokerage owned / operated by Service-Disabled Veterans. The entire Mischler Financial Group family is also proud to be serving as a member of the Host Committee for the  Army Ranger Lead The Way Fund 2018 Gala, which will take place Monday, September 24 at New York’s Chelsea Pier.