Browsing articles in "Recent Deals"
IG Debt Market Weekend Update: Citi in Sync With Synchrony
May 2018      Debt Market Commentary, Recent Deals   

Quigley’s Corner 05.18.18 Investment Grade Debt Market Commentary:Spotlight On Synchrony Bank

Investment Grade New Issue Re-Cap – Synchrony Bank Owns the Friday Leaderboard

Today’s IG Primary & Secondary Market Talking Points

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

Global Market Recap

The Best and the Brightest” Syndicate Forecasts and Sound Bites for Next Week

The “QC” Geopolitical Risk Monitor

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

This Week’s IG New Issues and Where They’re Trading

Indexes and New Issue Volume

2018 Lipper Report/Fund Flows – Week ending May 16th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

UST Resistance/Support Table

Today Synchrony Bank (wholly-owned subsidiary of Synchrony Financial NYSE:SYF) owned the IG dollar primary market leaderboard with its $750mm 3(a)5 exempt 3-year senior bank notes transaction. What’s more, Mischler Financial, the nation’s oldest Service Disabled Veteran-owned and operated broker dealer was honored to be named as an active 1.00% Co-Manager. Thank you to stalwart Chris Coffey who is no stranger to diversity and inclusion mandates in our DCM. Chris was there from the get-go back in his days at MBNA when during his time he helped steer that issuer to become a founding father of inclusion transactions along with some other large FIGs. That pre-dates Chris’ GECC days! We appreciate SYF’s patronage and our active role today. Thank you as well to both Citigroup and MUFG Syndicate and of course, to the best darn middle markets distribution network on the street for your loyalty and continued belief in and support of the “value-added” proposition. Congrats also to Chris for his first Friday print at SYF and for his efforts in continuing to implement and guide a stellar diversity mandate that saw 7 diversity firms on today’s new 3-year that included a Service Disabled Veteran-owned broker-dealer three African-American-owned BDs a Hispanic-American owned firm, and a Woman-owned firm.

Today’s final Synchrony order book finished at just over $1.8b making the deal 2.40-times oversubscribed.  Concession on today’s deal was negative 2 bps given new 5-year SYF bank paper is +135. Adjusting <35> bps for the 3s/5s curve gets you to +100 against today’s final T+98 pricing pegs NIC as <2> bps.  A nice day for SYF, the leads and congratulations to Chris on a successful first Friday print at Synchrony! Net, net – a VERY GOOD RESULT for all!

Overseas in the EU two new issues were postponed including the first in 2018 for an investment grade rated issuer pointing to investor fatigue following one of the busier weeks of the year. 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 96.86% of this week’s syndicate midpoint average forecast or $32.855b vs. $33.92b.
  • MTD we’ve priced 68.69% of the syndicate forecast for April IG Corporate new issuance or $92.625b vs. $134.84b.
  • There are now 17 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 1 IG Corporate-only new issue was <14.50> bps.
  • BAML’s IG Master Index was unchanged at +114. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.09 vs. at 1.08.  (0.85 is its post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +147. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $19.7b on Thursday versus $20.8b on Wednesday and $19.1b the previous Thursday.
  • The 10-DMA stands at $17.9b.
  • Taking a look at the secondary trading performance of this week’s 43 IG new issues comprised of 38 IG Corporates and 5 SSAs new issues 25 tightened versus NIP for a 58.25% improvement rate, 13 widened  (30.25%) and 5 were flat (11.50%).
  • For the week ended May 16th, Lipper U.S. Fund Flows reported a net inflow of $3.069b into Corporate Investment Grade Funds (2018 YTD net inflow of $40.444b) and a net outflow of $541.871m from High Yield Funds (2018 YTD net outflow of $15.381b).

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

 

IG Corporate New Issuance This Week
5/14-5/18
vs. Current
WTD – $32.855b
May 2018 vs. Current
MTD – $92.625b
Low-End Avg. $32.52b 101.03% $133.64b 69.31%
Midpoint Avg. $33.92b 96.86% $134.84b 68.69%
High-End Avg. $35.32b 93.02% $136.04b 68.09%
The High $20b 164.28% $110b 84.20%
The Low $40b 82.14% $150b 61.75%

 

Global Market Recap

  • U.S. Treasuries – ended a poor week with a solid rally.
  • Overseas Bonds – JGB’s unchanged. Bunds/Gilts rallied. Peripheral bonds were hit.
  • SOFR – 1.74% FROM 1.75%.
  • 3mth Libor – 2.32938% from 2.33125%.
  • Stocks – Mixed as of 3pm.
  • Overseas Stocks – Asia closed higher. Europe lost ground.
  • Economic – Nothing on the calendar today.
  • Overseas Economic- – Japan CPI was very tame. Europe inflation data MoM was higher.
  • Currencies – DXY Index traded at a YTD high, Euro YTD low and ADXY Index at a YTD low.
  • Commodities – Crude small loss. Gold up and copper down. Wheat saw a big rally.
  • CDX IG: +0.82 to 61.73
  • CDX HY: +1.60 to 340.22
  • CDX EM: +5.30 to 170.73
  • VIX: -0.09 to 13.34

*CDX levels are as of 3:30PM ET today.

-Tony Farren, Managing Director, Rates Trading

This Week’s IG New Issues and Where They’re Trading 

Taking a look at the secondary trading performance of this week’s 43 IG new issues comprised of 38 IG Corporates and 5 SSAs new issues 25 tightened versus NIP for a 58.25% improvement rate, 13 widened  (30.25%) and 5 were flat (11.50%).

 

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED TRADING
Synchrony Bank BBB/BBB- 3.65% 5/24/2021 750 +112.5a +100a (+/-2) +98 +98 97/96
Charles Schwab Corp. A2/A FRN 5/21/2021 600 3mL+equiv 3mL+equiv 3mL+32 3mL+32 3mL+33/30
Charles Schwab Corp. A2/A 3.25% 5/21/2021 600 +65a +50 the # +50 +50 50/47
Charles Schwab Corp. A2/A 3.85% 5/21/2025 750 +95a +80 the # +80 +80 80/77
Svenska Handelsbanken Aa2/AA FRN 5/24/2021 1,250 3mL+equiv 3mL+47 the # 3mL+47 3mL+47 3mL+44/41
Svenska Handelsbanken Aa2/AA 3.35% 5/24/2021 1,250 +80a +65 the # +65 +65 65/62
Valero Energy Corp. Baa2/BBB 4.35% 6/01/2028 750 +137.5a N/A +125 +125 124/121
Province of New Brunswick Aa2/A+ 3.625% 2/24/2028 500 MS +50a MS +50a MS +50 +53.3 53/52
Harley-Davidson Finc’l Svcs. A3/A FRN 5/1/2020 450 3mL+65a 3mL+53 (+/-3) 3mL+50 3mL+50 3mL+43/41
Harley-Davidson Finc’l Svcs. A3/A 3.55% 5/21/2021 350 +95a +83 (+/-3) +80 +80 79/76
Kommuninvest Aaa/AAA 2.875% 3/01/2021 1,000 MS +8a MS +8 MS +6 +20.7 21/19
Avista Corp. A2/A- 4.35% 6/01/2048 375 +125a +115 the # +115 +115 114/111
Citigroup Inc. Baa1/A FRN 6NC5
6/01/2024
1,000 3mL+equiv 3mL+equiv 3mL+102.3 3mL+102.3 3mL+98/94
Citigroup Inc. Baa1/A 4.044% 6NC5
6/01/2024
1,250 +115-120/+117.5a +112.5 the # +112.5 +112.5
Back-end:
3mL+102.3
109/106
Citigroup Inc.
(tap) New Total: $3.85b
Baa3/A- 4.45% 9/29/2027 350
WNG
+high 160a
+167.50a
+163 the # +163 +163 163/161
Diageo Capital plc A3/A- FRN 5/18/2020 500 3mL+equiv 3mL+equiv 3mL+24 3mL+24 3mL+21/18
Diageo Capital plc A3/A- 3.00% 5/18/2020 500 +60-65/+62.5a +47a (+/-2) +45 +45 40/37
Diageo Capital plc A3/A- 3.50% 9/18/2023 500 +75-80/+77.5a +65a (+/-2) +63 +63 62/59
Diageo Capital plc A3/A- 3.875% 5/18/2028 500 +95-100/+97.5a +87a (+/-2) +85 +85 82/79
Perusahaan Listrik Negara
PT Persero
Baa2/BBB 5.45% 5/21/2028 1,000 5.80%a 5.50% the # 5.50% +241.4 236/232
Perusahaan Listrik Negara
PT Persero
Baa2/BBB 6.15% 5/21/2048 1,000 6.50%a 6.20% the # 6.20% +299.6 292/288
Royal Bank of Scotland Baa3/BBB+ 4.892% 11NC10 F-t-F
5/18/2029
1,750 +200a +185a (+/-3) +182 +182
Back-end:
3mL+175.4
185/181
Republic of South Africa Baa3/BB+ 5.875% 6/22/2030 1,400 6.00%a 5.875% the # 5.875% +280.5 285/280
Republic of South Africa Baa3/BB+ 6.30% 6/22/2048 600 6.375%a 6.30% the # 6.30% +310.1 315/312
Swedish Export Credit Corp. Aa1/AA+ 2.875% 5/22/2021 1,000 MS +12a MS +10a (+/-1) MS +9 +24.8 25/24
AEP Texas Inc. Baa1/A- 3.95% 6/01/2028 500 +110a +100-105 +100 +100 96/93
Ameren Illinois Co. A1/A 3.80% 5/15/2028 430 +95a +85a (+/-3) +82 +82 78/75
American Express Co. A3/A FRN 5/17/2021 800 3mL+equiv 3mL+equiv 3mL+52.5 3mL+52.5 3mL+46/
American Express Co. A3/A 3.375% 5/17/2021 1,200 +low 80s/+82.5a +70a (+/-2) +68 +68 68/63
Bank of America Corp. A3/A 3.499% 5/17/2022 2,250 +100a N/A N/A +80
Back-end:
3mL+63
81/78
Canadian Pacific Railroad Baa1/BBB+ 4.00% 6/01/2028 500 +120a +105a (+/-3) +102 +102 99/96
Dr. Pepper Snapple/Keurig
Maple Escrow Subsidiary Inc
Baa2/BBB 3.551% 5/25/2021 1,750

 

+105a +90a (+/-5) +85 +85 83/80
Dr. Pepper Snapple/Keurig
Maple Escrow Subsidiary Inc
Baa2/BBB 4.057% 5/25/2023 2,000 +135a +125a (+/-5) +120 +120 116/114
Dr. Pepper Snapple/Keurig
Maple Escrow Subsidiary Inc
Baa2/BBB 4.417% 5/25/2025 1,000 +160a +150a (+/-5) +145 +145 141/137
Dr. Pepper Snapple/Keurig
Maple Escrow Subsidiary Inc
Baa2/BBB 4.597% 5/25/2028 2,000 +175a +165a (+/-5) +160 +160 162/158
Dr. Pepper Snapple/Keurig
Maple Escrow Subsidiary Inc
Baa2/BBB 4.985% 5/25/2038 500 +205a +190a (+/-5) +185 +185 190/185
Dr. Pepper Snapple/Keurig
Maple Escrow Subsidiary Inc
Baa2/BBB 5.085% 5/25/2048 750 +215a +200a (+/-5) +195 +195 202/197
Fidelity Nat’l. Info. Systems Baa2/BBB 4.25% 5/15/2028 400 +145 +135a (+/ (+/-5)-5) +130 +130 131/127
Fidelity Nat’l. Info. Systems Baa2/BBB 4.75% 5/15/2048 600 +190 +180a (+/-5) +175 +175 178/174
Goldman Sachs Group, Inc. A3/A FRN 8NC7
5/15/2026
1,500 3mL+125a 3mL+120a (+/-3) 3mL+117 3mL+117 3mL+121/118
Great-West Lifeco Finance A+/A 4.047% 5/17/2028 300 +130a +110a (+/-5) +105 +105 103/99
Great-West Lifeco Finance A+/A 4.581% 5/17/2048 500 +160a +145 the # +145 +145 143/141
San Diego Gas & Electric Co. Aa2/AA- 4.15% 5/15/2048 400 +110a +105 the # +105 +105 102/100

 

The Best and the Brightest” Syndicate Forecasts and Sound Bites for Next Week

Thanks as always for tuning in to the daily “QC”, enjoy your read in preparation for the week ahead along with my impassioned plea to enjoy a fabulous weekend with you and yours!

Okay, the fixed income syndicate sound test is complete.  I have over 3,500 readers in the audience. Fade out the overture. Lights, camera, action!:

I am happy to announce that the “QC” once again received 100% unanimous participation from all 24 desks surveyed for today’s “Best & Brightest” Syndicate edition!  Thank you to all of them. 21 of today’s respondents are in the top 22 syndicate desks including 21 of the top 24 according to today’s Bloomberg U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  The 2018 League table can be found on your terminals at “LEAG” + [GO] after which you select (U.S. Investment Grade Corporates).  The participating desks represent 81.00% of all IG dollar-denominated new issue underwriting as of today’s table share percentage which simply means they are the ones with visibility.  But it’s not only about their volume forecasts, it’s also about their comments!  This core syndicate group does it best; they know best; so they are the ones you WANT and NEED to hear from.  It’s a great look at the week ahead.

*Please note that these are Investment Grade Corporates only. They do not include SSA issuance unless otherwise noted.  

As always “thank you” to all the syndicate desks that participated in today’s survey.  I greatly appreciate your time to contribute and for making this edition of the “QC” among the most widely read! You are helping to promote Mischler’s value-added DCM proposition while adding readership to the “QC” that won Wall Street Letter’s Award as Best Broker Dealer Research in our financial services industry for three consecutive years – 2014, 2015 and 2016 !  Syndicate Desks: Please Note that we had a Friday print today from “SYF” so I updated the below survey question data to reflect Synchrony Bank’s 3-year new issue. If you notice any differences that’s why. Thanks! -RQ

As always, before we get to the technical data let’s first review this week’s top geopolitical risk factors:

  • 5/17 – Kim Jong-un warned that the de-nuclearization summit could be compromised due to John Bolton’s paralleling a NOKO-U.S. de-nuke deal with the Libyan “model of nuclear abandonment.” Bolton is highly qualified but needs to tone down and save the rhetoric for if and when needed – not prior to the historic summit.
  • 5/14 – Although Pres. Trump reversed sanctions on China’s ZTE telecom it was done in exchange for China agreeing not to impose tariffs on U.S. agricultural products that had been levied in response to Trump’s earlier steel and aluminum tariffs.
  • 5/14 – Tensions mounted in the Middle East as Israeli troops fired on protesting Palestinians along the fenced Gaza strip killing 55 and wounding over 1,700. More violent and armed men were intermingled with the mostly peaceful Palestinian demonstrators including families with children. Once they burst through fencing Israeli snipers began to shoot into the onrushing crowd. The protest happened to coincide with the opening of the U.S. embassy in Jerusalem leaving friction at its highest level in years in the historic conflict.  
  • 5/16 – U.S. interest rates: The strong U.S. economy is supporting rising UST yields. T2s & 5s reached highs since 2008; CT10 since 2011 and the LB peaked at 3.10% (2015) a higher yield trading band is established. The sensitivity of EM currencies to higher rates is chronic. Combined with their own additional political risks, EM risks falling out of favor as currencies fall out of bed. 
  • 5/17 – Pressure on UK PM Theresa May mounts as Britain’s House of Lords dealt BREXIT its 15th defeat, this time over environmental protections issues by a 54%-46% margin. In addition, friction intensified between supporters of a post-BREXIT customs partnership with the EU vs. resistance by those who support technology to monitor the critical border between Ireland and Northern Ireland.
  • May 2018 Terror Event MTD Casualty Total: 79 terrorist attacks; 618 dead; 781 wounded.
  • 5/17 – Italy’s two ant-establishment parties 5-Star and League plan tough immigration reform, lifting all sanctions against Russia, creating 2 tax brackets of 15 and 20%, dropping a previously increased retirement age and a citizen’s income for the poor. Wishful thinking!

Now let’s take a look at the critical week-on-week primary market stats: 

  • The IG Corporate WTD total stands at $32.855b. We priced $1.065b less than this week’s average midpoint estimate of $33.92b or <3.14%>.
  • MTD we priced 68.69% of the syndicate midpoint forecast for IG Corporate new issuance or $92.625b vs. $134.84b.
  • Entering today’s session, the YTD IG Corporate-only volume is $557.296b vs. the $574.314b YoY which is <$17.018b> or <2.96%> less than a year ago.
  • The all-in or IG Corporate plus SSA YTD volume is $705.361b vs. $717.956b YoY making it  <$12.595b> or <1.75%> less than vs. 2017.

Here are the five key primary market driver averages for the 57 IG Corporate-only deals that priced this week: 

  • NICS:  4.59 bps  
  • Oversubscription Rates: 2.96x
  • Tenors: 10.18 years
  • Tranche Sizes: $842mm
  • Spread Compression from IPTs to the Launch: <15.12> bps

Here’s how this week’s critical primary market data compares against last week’s numbers: 

  • Week on week, average NICs widened 0.49 bps to an average 4.59 bps vs. 4.10 bps across this week’s 43 IG Corporate-only new issues that displayed relative value.
  • Over subscription or bid-to-cover rates, the measure of demand, increased by 0.26x to an average 2.96x vs. 2.70x. 
  • Average tenors extended by 3.14 years to an average 10.18 years vs. 7.04 years.
  • Tranche sizes increased by $37mm to $842mm vs. $805mm last week.
  • Spread compression from IPTs to the launch/final pricing of this week’s 43 IG Corporate-only new issues tightened by 2.21 bps to <15.12> bps vs. <12.91> bps.
  • Standard and Poor’s Investment Grade Composite Spread tightened 1 bps to +147  bps vs. +148 week-on-week. 
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning tightened 2 bps to 1.09 vs. 1.11 week-on-week.
  • Investment grade corporate bond trading posted a final Trace count of $19.7b on Thursday versus $20.8b on Wednesday and $19.1b the previous Thursday.  
  • The 10-DMA stands at $17.9b.
  • The VIX widened 0.78 or 6.16% to 13.43 at yesterday’s close vs. last Friday’s 12.65 close.
  • Week-on-week, BAML’s IG Master Index tightened 2.00 bps to +114 vs. +116 week-on-week.  
  • Spreads across the four IG asset classes tightened 2.00 bps week-on-week to 18.75 vs. 20.75 bps as measured against its cumulative post-Crisis low.
  • Spreads across the 19 major IG industry sectors tightened 1.89 bps to an average 25.11 vs. 27.00 bps as measured against their average cumulative post-Crisis lows!
  • For the week ended May 16th, Lipper U.S. Fund Flows reported a net inflow of $3.069b into Corporate Investment Grade Funds (2018 YTD net inflow of $40.444b) and a net outflow of $541.871m from High Yield Funds (2018 YTD net outflow of $15.381b).

Entering today’s Friday session here’s a look at this week’s IG issuance volume totals:

  • IG Corps: $32.855b
  • All-in IG (Corps + SSA): $37.355b

And now it’s time for today’s question posed to the senior members of the Industry’s top 24  fixed income syndicate desks: “What are your thoughts and numbers for next week’s IG Corporate new issue volume?”
 

Please know that on each and every new issue, the guy-in-the-corner is ALWAYS in YOUR corner on deal day! If an issuer asks you who are some of the best diversity firms are, my hope is that you’ll mention Mischler Financial and the guy-in-the-corner.  Our distribution is high quality, prolific and consistent. On deal day, we perform enough to influence your bid-to-cover rates with REAL high quality and unpadded “sticky” investor orders. The “QC” won Wall Street Letter’s Award as Best Broker Dealer Research in our financial services industry for three consecutive years….2014, 2015 and 2016! But most of all we have a great certification-the nation’s oldest Service Disabled Veteran owned and operated broker dealer.

Wishing you and yours a wonderful weekend!
Ron Quigley, Managing Director, Head of Fixed Income Syndicate

 

The “Best and the Brightest” in Their Own Words

(more…)

CenterPoint Energy Resources Awards Mandate to Mischler, Other Minority Firm
March 2018      Company News, Recent Deals   

CenterPoint Energy Resources Corp. announces the closing of $600 million senior notes offering;

Underwriters include Veteran-Owned Mischler Financial Group

HOUSTONMarch 28, 2018 /PRNewswire/ — CenterPoint Energy Resources Corp. (CERC), an indirect, wholly-owned subsidiary of CenterPoint Energy, Inc. (NYSE: CNP), today announced the closing of its offering and sale of $300 million aggregate principal amount of 3.55 percent Senior Notes due 2023 and $300 million aggregate principal amount of 4.00 percent Senior Notes due 2028.  Citigroup, Credit Suisse, BofA Merrill Lynch, MUFG, Barclays, J.P. Morgan, Regions Securities LLC, and US Bancorp served as joint bookrunners.  Mischler Financial Group, Inc. and The Williams Capital Group, L.P. served as co-managers.

“We appreciate the opportunity to partner with leading banks to finance investments that reinforce our system’s integrity, reliability, and performance for our customers,” said Scott Doyle, senior vice president of Natural Gas Distribution.  “CenterPoint Energy, as evidenced by this transaction, remains committed to supplier diversity in meeting its financing needs.”

This news release does not constitute an offer to sell, or the solicitation of any offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.

This news release includes forward-looking statements. Actual events and results may differ materially from those projected.  The statements in this news release that are not historical facts are forward-looking statements. Factors that could affect actual results include the timing and impact of future regulatory and legislative decisions, effects of competition, weather variations, changes in business plans, financial market conditions and other factors discussed in CERC’s Form 10-K for the fiscal year ended December 31, 2017 and CERC’s other filings with the Securities and Exchange Commission. A written prospectus may be obtained by visiting EDGAR on the SEC Website at https://www.sec.gov/.

CenterPoint Energy, headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution and energy services operations. The company serves more than five million metered customers primarily in ArkansasLouisianaMinnesotaMississippiOklahoma, and Texas. The company also owns 54.1 percent of the common units representing limited partner interests in Enable Midstream Partners, a publicly traded master limited partnership it jointly controls with OGE Energy Corp., which owns, operates and develops natural gas and crude oil infrastructure assets. With nearly 8,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years.

The full new story is available via this link

FIGs Float Just Fine (CITI, DB, PNC, WBK) ; Mischler Debt Market Comment 011718
January 2018      Debt Market Commentary, Recent Deals   

Quigley’s Corner 01.17.18 – FIGs Float Just Fine (CITI, DB, PNC, WBK)

 “Neither the depth of despondency nor the height of euphoria tells you how long either will last.” Thomas Sowell

 

Investment Grade New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points: FIGs in Focus

Syndicate IG Corporate-only Volume Estimates For January

Global Market Recap

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              

Lipper Report/Fund Flows – Week ending January 11th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Rates Trading Lab

Economic Data Releases

Tomorrow’s Calendar 

  

Investment Grade New Issue Re-Cap

Today the IG dollar DCM hosted 7 issuers across 13 tranches totaling $10.70b.  The SSA space added 3 issuers and 3 tranches for $3.75b bringing the all-in IG day totals to 10 issuers, 16 tranches and $14.45b.
Here’s a look at MTD IG Corporate new issue volume as measured against syndicate desk estimates:

  • The IG Corporate WTD total is 81.98% of this week’s syndicate midpoint average forecast or $23.15b vs. $28.24b.
  • MTD we’ve priced 64.06% of the syndicate forecast for January IG Corporate new issuance or $82.825b vs. $129.29b.
  • There are now 10 issuers in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points 

  • Mischler Financial served as a Junior Co-Manager on today’s Citigroup Inc. $1b 21nc20 Senior Unsecured Notes tranche. Thanks and appreciation to Citi Team Treasury/Funding and Syndicate for working with me today. Today’s 21nc20 tranche finished with a $1.9b book for a 1.90x bid-to-cover rate.
  • Mischler Financial also served as a Junior Co-Manager on today’s Deutsche Bank AG/New York Branch $2.15b two-part 3-year Fixed and FRN Senior Notes new issue.  Thank you to Team DB Treasury/Funding and Syndicate for their patronage. Today’s DB 2-part finished with a cumulative 3.375b order book total for an overall oversubscription rate of 1.57x.  The book splits were as follows – FRN: $875mm or 1.35x and the Fixed tranche was $2.5b (1.67x).  NIC was about one nickel or 5 bps on both.
  • TPG Specialty Lending Inc. upsized today’s 5-year Senior Notes new issue to $150mm from $100mm at the launch and after skipping guidance.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 13 IG Corporate-only new issues was <15.52> bps.
  • The “BBB” (+121) asset class set new post-Crisis low.
  • The IG Average (+94), “AA” (+53) and “A” (+73) asset classes all tied their post-Crisis lows.
  • 13 of the 19 major investment grade sector credit spreads (68.4%) either set or tied post-Crisis.
  • These 6 sectors set new post-Crisis lows: Basic Industry (+118), Energy (+122), Leisure (+104), Services (+96), Transportation (+96) and Utility (+100).
  • These 7 Sectors tied their lows: Banking (+79), Consumer Products (+80), Healthcare (+80), Industrials (+98), Insurance (+105), Real Estate (+106) and Retail (+86),
  • BAML’s IG Master Index was unchanged at +94 tying its post-Crisis low.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 0.89 vs. 0.90.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +131 tying its new post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $19.7b on Tuesday versus $16.2b on Friday and $20.7b the previous Tuesday.
  • The 10-DMA stands at $17.3b.

 

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

 

IG Corporate New Issuance This Week
1/16-1/19
vs. Current
WTD – $23.15b
January 2018 vs. Current
MTD – $82.825b
Low-End Avg. $27.24mm 84.99% $128.54b 64.44%
Midpoint Avg. $28.24mm 81.98% $129.29b 64.06%
High-End Avg. $29.24mm 79.17% $130.04b 63.69%
The Low $15mm 154.33% $100b 82.82%
The High $36mm 64.31% $150b 55.22%

 

Global Market Recap

 

  • U.S. Treasuries – 7yr leads USTs south. 2yr, 3yr and 5yr traded at high yields in years.
  • Overseas Bonds – JGB’s weaker. Bunds and Gilts little changed. Peripherals mixed.
  • 3mth Libor – Set at 1.73918% the highest yield since December 2008.
  • Stocks – Big rally at 3pm. Dow traded at its all-time high.
  • Overseas Stocks – Asia closed mixed. Europe had a losing day.
  • Economic – Mixed data favoring the upside. Cap U the highest since January 2015.
  • Overseas Economic – Japan core machine orders strong. EU CPI YoY very tame.
  • Currencies – DXY Index hit its low since January 2015.
  • Commodities – CRB traded at its high since November 2015.
  • CDX IG: -0.21 to 47.80
  • CDX HY: -0.54 to 298.76
  • CDX EM: -0.48 to 109.88
  • VIX: -0.16 to 11.50

*CDX levels are as of 3:30PM ET today.

-Tony Farren

 

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

 

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:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
1/15
TUES.
1/16
AVERAGES
WEEK 1/08
AVERAGES
WEEK 1/01
AVERAGES
WEEK 12/25
AVERAGES
WEEK 12/18
AVERAGES
WEEK 12/11
AVERAGES
WEEK 12/04
New Issue Concessions 1.20 bps 2.35 bps <0.725> bps <0.79> bp N/A N/A <1.46> bps 1.62 bps
Oversubscription Rates 2.29x 2.97x 3.75x 2.85x N/A N/A 4.64x 3.18x
Tenors 5.30 yrs 7.55 yrs 8.12 yrs 7.80 yrs N/A N/A 11.63 yrs 10.69 yrs
Tranche Sizes $603mm $1,131mm $747mm $787mm N/A N/A $398mm $576mm
Avg. Spd. Compression
IPTs to Launch
<15.80> bps <13.41> bps <19.12> bps <17.01> bps N/A N/A <18.18> bps <16.34> bps

 

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

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Citigroup Inc Baa1/A 3.142% 5NC4 F-t-F
1/24/2023
2,000 +87.5 N/A +75 +75 CITI-sole
Citigroup Inc Baa1/A 3.878% 21NC20 F-t-F
1/24/2039
1,000 +110a N/A +102 +102 CITI-s
Deutsche Bank AG/NY Baa2/BBB- FRN 1/22/2021 650 3mL+equiv 3mL+83.5a (+/-2) 3mL+81.5 3mL+81.5 DB-sole
Deutsche Bank AG/NY Baa2/BBB- 3.15% 1/22/2021 1,500 +115 +102a (+/-2) +100 +100 DB-sole
PhosAgro Ba1/BBB- 3.949% 4/24/2023 500 4.375%a 4.125a (+/-12.5) 3.95% +156.8 BAML/CITI/JPM/RAFF/REN/SG
SBER/UBS/UNI/VTB
PNC Bank NA A2/A+ FRN 1/22/2021 400 3mL+equiv 3mL+equiv 3mL+25 3ml+25 CITI/GS/JPM
PNC Bank NA A2/A+ 2.50% 1/22/2021 900 +55a +45a (+/-2) +43 +43 CITI/GS/JPM/PNC
PNC Bank NA A2/A+ 3.25% 1/22/2028 700 +85a +75a (+/-2) +73 +73 CITI/GS/JPM/PNC
Toll Brothers Finance Corp. Ba1/BBB- 4.35% 2/15/2028 400 4.50%-4.625% 4.40%a (+/-5) 4.35% $100.00 CITI/DB/MIZ/STRH/WFS
TPG Specialty Lending Inc. BBB-/BBB- 4.50% 1/22/2023 150 +225a N/A +212.5 +212.5 BAML/CITI/HSBC/JPM/STRH
Westpac Banking Corp. Aa3/AA- FRN 1/25/2021 500 3mL+equiv 3mL+equiv 3mL+34 3mL+34 BAML/GS/MS/WSTP
Westpac Banking Corp. Aa3/AA- 2.65% 1/25/2021 1,000 +65a +55a (+/-3) +52 +52 BAML/GS/MS/WSTP
Westpac Banking Corp. Aa3/AA- 3.40% 1/25/2028 1,000 +100a +90a (+/-3) +87 +87 BAML/GS/MS/WSTP

 

SSA

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Dexia Crédit Local Aa3/AA 2.50% 1/25/2021 1,500 MS +low 30s
+32.5a
MS +29a MS +27a +45.90 BARC/CITI/GS/HSBC/SG
EDC Aaa/AAA 2.50% 1/24/2023 1,250 MS +11a MS +10a (/-1) MS +10 +15.55 BAML/BMO/CACIB/JPM
Kommuninvest Aaa/AAA 2.375% 4/22/2021 1,000 MS +6a MS +5a MS +4 +24.35 CITI/NOM/NORD/TD

 

Indexes and New Issue Volume              

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

*Denotes new all-time high or tight.

                                                                                                                                               

Index Open Current Change
IG29 48.007 47.998 <0.009>
VIX 11.66 11.91 0.25
CT10 2.538% 2.591% 0.053%  
S&P 2,776 *2,802 26  
DOW 25,792 *26,115 323
Nasdaq 7,223 *7,298 75
OIL 63.73 64.09 0.36  
GOLD 1,326 1,327 1  
 

USD

 

IG Corporates

 

USD

 

Total (IG + SSA)

DAY: $10.70 bn DAY: $14.45 bn
WTD: $23.15 bn WTD: $26.90 bn
MTD: $82.825 bn MTD: $121.675 bn
YTD: $82.825 bn YTD: $121.675 bn

 

2018 Lipper Report/Fund Flows – Week ending January 11th

     

  • For the week ended January 11th, Lipper U.S. Fund Flows reported an inflow of $4.186b into Corporate Investment Grade Funds (2018 YTD net inflow of $5.151b) and a net inflow of $2.651b from High Yield Funds (2018 YTD net inflow of $2.837b).
  • Over the same period, Lipper reported a net outflow of $12.514m from Loan Participation Funds (2018 YTD net outflow of $209.799m).
  • Emerging Market debt funds reported a net inflow of $1.532b (2018 YTD inflow of $2.005b).

 

IG Credit Spreads by Rating

(more…)

Bearish Flattening, Tax Reform: DCM Unscathed; Rinse Repeat
November 2017      Debt Market Commentary, Recent Deals   

Quigley’s Corner 11.28.17 Bearish Flattening; Tax Reform; US Corporate Debt Capital Markets Unscathed; Rinse Repeat

 

Investment Grade US Corporate Debt New Issue Re-Cap 

Today’s IG Primary & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates For This Week

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

Rates Trading Lab

New Issues Priced: Synchrony Financial and Deutsche Bank AG New York 

This Week’s IG New Issues and Where They’re Trading

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending Nov 22

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

 

Investment Grade New Issue Re-Cap

Today the IG dollar DCM hosted 8 issuers across 8 tranches totaling $4.25b.  The big story for our nation’s oldest Service Disabled Veteran broker dealer – Mischler Financial Group, Inc., is that we were named a Co-Manager on the day’s two largest issues – Deutsche Bank AG New York Branch’s $1bn 15NC10 fxd-to-fxd Reset Sub Tier 2 Notes and Synchrony Financial’s 10-year Senior Notes new issue.  Those two transactions also just happened to account for 47% of today’s IG Corporate issuance!  You know what that means? Both DB and SYF are today’s Deals-of-the-Day which I will get to in alphabetical order following a review of an incredible day for markets and geopolitical events risk factors that I strongly advise you stay tuned to.

The S&P 500, the DOW and Nasdaq all closed at new all-time highs.

Here’s how the session’s IG Corporate new issue volume impacted the WTD and MTD syndicate desk estimates:

 

  • The IG Corporate WTD total is 47.81% of this week’s syndicate midpoint average forecast or $13.875b vs. $29.02b.
  • MTD we’ve priced 109.03% of the syndicate forecast for October IG Corporate new issuance or $105.079b vs. $96.38b.
  • There are now 11 issuers in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points

  • IHS Markit Ltd. (Ba1/BBB) bumped up its 8.25-year 144a/REGS Senior Notes new issue this afternoon to $500mm from $400mm at the launch and at the tightest side of guidance.
  • Physicians Realty LP increased today’s 10-year Senior Notes new issue to $350mm from $300mm at the launch and at the tightest side of guidance.
  • Life Storage LP upsized its 10-year Senior Notes new issue today to $450mm from $400mm at the launch and at the tightest side of guidance.
  • BAML’s IG Master Index was unchanged at +104.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 0.99.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +145.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $16.9b on Monday versus $1.7b on Friday and $15.7b the previous Monday.
  • The 10-DMA stands at $14b.

 

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

 

IG Corporate New Issuance This Week
11/27-12/01
vs. Current
WTD – $13.875b
November 2017 vs. Current
MTD – $105.079b
Low-End Avg. $27.72b 50.05% $95.28b 110.28%
Midpoint Avg. $29.02b 47.81% $96.38b 109.03%
High-End Avg. $30.32b 45.76% $97.48b 107.80%
The Low $25b 55.50% $75b 140.11%
The High $38b 36.51% $130b 80.83%

 

Global Market Recap

 

  • U.S. Treasuries – Unchanged (30yr) to small losses (balance of curve) in a choppy session.
  • Overseas Bonds – JGB’s mixed. EU core & semi core little changed. Peripherals more green.
  • 3mth Libor – Set at the highest level since December 2008 (1.47882%).
  • U.S. Stocks – Big rally to all-time highs.
  • Overseas Stocks – China rallied. Nikkei & HS tiny losses. Winning day in Europe.
  • U.S. Economic – Mixed data today but the strong data was very, very strong.
  • Overseas Economic – Not a factor today but will be tomorrow.
  • Currencies – USD outperformed 4 of the Big 5. Solid rally for the DXY Index.
  • Commodities – Down day from crude oil, gold, cooper, silver, etc. Strong session for natural gas.
  • CDX IG: -0.89 to 52.65
  • CDX HY: -4.71 to 317.68
  • CDX EM: -1.15 to 179.38

*CDX levels are as of 3:30PM ET today.

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
“North Korea”
11/28 – South Korea’s Joint Chiefs of Staff verified that North Korea fired a ballistic missile that landed in the Sea of Japan. This comes 26 days after SOKO’s 11/02 NIS warning of activity at a NOKO nuke facility and expectations of a launch. Situation is “dire” Action needed = “Exclusive “QC” source. SOKO Olympics begin Friday 2/2018 and end Sunday 2/25 = Dates to keep in mind! 11/20 – Pres. Trump announced the U.S. designated NOKO as a state sponsor of terrorism. Warns NOKO that “nuclearization puts its regime in grave danger & increases the peril it faces.”
ELEVATED
“Beltway Dysfunction”
11/28 – U.S. Senate Budget Committee advanced the GOP tax reform bill to Senate for debate that could see a vote take place as early as Thursday 11/30. Congress passed the Tax Reform Bill on 11/16 in a 227-205. Strong push to unite all Republicans behind Trump to get tax reform done by year end.

Gaining traction in the Beltway: Atty. Gen. Sessions raised the possibility of special counsel appointment to investigate the Uranium One Deal involving the Clinton Foundation in which a Russian company took control of 20% of entire supply of U.S. uranium supply used to make nuclear weapons in exchange for Clinton Foundation donations. In a decree on March 20, 2020 Russia’s Vladimir Putin, abolished the Federal Agency for Nuclear Power. The public corporation Rosatom (he owns) was vested with the authority to implement on behalf of the Russian Federation the rights of shareholders in the joint-stock companies in the nuclear energy industry. In 2013 Rosatom retained full ownership. Matter of U.S. national security.

 

CAUTION

MENA & EU

11/28Israeli Mossad working with Saudi’s General Intelligence Presidency (GIP) over mounting tensions with Iran. Shared interests against Iran are bringing both nation’s closer. Lebanon’s PM al-Hariri resigned from Saudi Arabia 11/05 blaming Iranian aggression. Abandons support of Iran’s Hezbollah terror group.  Beirut, is proving ground for Saudi-Iranian proxy wars. Consolidation of KSA power with Crown Prince Mohammed bin Salman breeds sweeping change in the Kingdom called “Vision 2030” to wean KSA off oil. bin Salman leadership saw more than 50 Saudi inner players arrested in anti-corruption probe including Prince Alwaleed bin Talal, Saleh Kamel & Khalid al-Tuwaijri to show he is clearly in charge.  Trump and House of Saud are close.  Both share strong views on an anti-nuclear Iran. KSA needs oil above $81 to break even. “Tensions” will surely boost the price of a barrel of “black gold.”

Negotiators reached agreement in principle on EU settlement demand or BREXIT “divorce bill.” Amount is heard to be in a €45b to €55b range down from the €60bn that the EU initially demanded. This breaks the deadlock and should promote further Dec. & Jan. negotiations. U.K. withdrawal from EU takes place in 3/2019. Moody’s downgraded the UK on 9/22 to Aa2 from Aa1. Critical that PM Theresa May has shown an ability to effectively.

Spain’s Rajoy announces snap elections on Dec. 21st to help defray the Catalonian independence crisis. Could result in breakaway = could spread thru EU. Former Catalan Pres. Puigdemont to appear in court 11/17. On 11/02: 8 Catalan gov’t. members jailed in Spain for role in independence rebellion & sedition.

The Caliphate is destroyed but ISIS is now scattered across a wider region including Europe. November MTD Terror Stats a/o 11/27: 39 terrorist attacks; 766+ dead; 705+ wounded. 

MODERATE
“China”
China hard landing: rising corporate debt & slower GDP growth are OECD and IMF concerns. Debt is 250% of GDP. National Congress of the Chinese Communists Party confirms Xi Jinping as its most powerful leader since Mao. Xi loyalists make up inner sanctum of Chinese politics into the next decade. 6% GDP in 2018 will be difficult.

Cybercrime, ransomware, viruses & hacking are winning cyber wars. Recent attacks have hit four continents, law firms, food companies, power grids, pharma and governments. 

Italian elections in March 2018.

MARGINAL
“2018 US Recession?
Bearish flattening signals danger for the U.S. economy. Recent bullish flattening has completely disregarded the absence of inflation. Jay Powell nominated as new fed Chief. Should provide stability/continuity; positive for GOP if latter gets their act together. The balance sheet or “b/s” normalization program is proceeding and will remain highly incremental. Fed signals 1 more rate hike in 2017 (December12/13 FOMC); 3 in 2018. Dot plots are unchanged for 2017 & ’18; lower for ’19 & longer-term. Shifts/adjustments in monetary policy outweigh chance of a 2018 recession.

 

Deutsche Bank AG New York Branch 15NC10 fxd-to-fxd Reset Sub Tier 2 Notes Deal Dashboard 

Mischler Financial Group, Inc., the nation’s oldest Service Disabled Veteran broker dealer was honored today to serve on today’s $1b Deutsche Bank AG/New York Branch 15NC10 fixed-to-fixed Reset Subordinated Tier 2 Notes new issue. We thank Team DB for selecting Mischler as a Junior Co-Manager from among the host of diversity firms in our industry.

For the DB fair value study I looked at the outstanding 4.296% 15NC10 Global Sub Notes (5/24/2028) that was 4.63% to call or 4.70 YTM which is equal to T+237 vs. T10.  Adding 9 bps to account for the swap curve from 2028s to 2032s gets you to T+246 pegging NIC on today’s T+255 print at 9 bps. A personal “thank you” to Margaret Szczerbicki!

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

 

DB Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
15nc10
fxd-to-fxd
12/01/2032
+280a +260a (+/-5) +255 +255
Reset 5yr
MS +255.3
<25> bps 9 250/247 <5>

 

………and here’s a snap shot of today’s final book size and oversubscription rate – the measure of investor demand:

 

DB Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
15nc10 ftf
12/01/2032
$1bn $2.3b 2.30x

 

Final Pricing – Deutsche Bank AG New York Branch 15NC10 fixed-to-fixed Reset Subordinated Tier 2 Notes

DB $1bn 4.875% (15nc10) fxd-to-fxd due 12/01/2032 @ $99.968 to yield 4.878% or T+255  Reset 5yr MS +255.3

 

Synchrony Financial $1bn 10-year Senior Notes Deal Dashboard 

Mischler Financial Group, Inc., is proud to announce that it also served as an active 1.00% Co-Manager on Synchrony Financial’s $1bn 10-year Senior Notes new issue today.  We have enjoyed a longtime partnership with Synchrony.

For the Synchrony Financial relative value study I looked to the outstanding SYF 3.70% Senior Unsecured Global Notes due 8/04/2026 that were T+148 (G+153) pre-announcement. Adding 5 bps for the extension from the SYF 8/2026 to today’s SYF 12/2027 gets us to G+158 landing on today’s +165 print as 7 bps.

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

 

SYF Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
SYF 10yr +180a +165 the # +165 +165 <15> bps 7 165 (issue bid) 0/flat

 

………and here’s a snap shot of today’s final book size and oversubscription rate – the measure of investor demand:

 

SYF Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
SYF 10yr $1bn $2.4b 2.40x

 

Final Pricing – Synchrony Financial 10-year Senior Notes

SYF $1bn 3.95% due 12/01/2027 @ $99.714 to yield 3.985% or T+165

(more…)

Investment Grade Corporate Debt Issuance-A Common Thread
October 2017      Debt Market Commentary, Recent Deals   

Quigley’s Corner 10.24.17 – A Common Thread re Ford Motor Credit and Goldman Sachs Corporate Debt Issuance  

Investment Grade US Corporate Debt New Issue Re-Cap 

Today’s IG Primary & Secondary Market Talking Points: Spotlight on Ford Motor Credit & GS

Global Market Recap

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

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

Rates Trading Lab

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending October 18th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

The “QC” Geopolitical Risk Monitor

 

Investment Grade New Issue Re-Cap

Today the IG dollar DCM hosted 3 issuers across 7 tranches totaling $9.45b.  The SSA space featured 4 issuers and 6 tranches for $7.50b bringing the all-in IG day totals to 7 issuers, 13 tranches and $16.95b. Clearly the mega deal of the day belongs to The Goldman Sachs Group, Inc. that issued a $7b three-part Senior Unsecured Global Notes transaction for which Mischler served as an active Co-Manager on the 21nc20 fixed-to-floating tranche due 10/31/2038.  That deal and more specifically that tranche is today’s Deal-of-the-Day.

Here are the day’s recaps first:

The DOW skyrocketed 168 points to close at a new all-time high of 23,441 propelled by stellar earnings from the likes of Caterpillar, 3M, GM and Fiat Chrysler.

Here’s how the session’s IG Corporate new issue volume impacted the WTD and MTD syndicate estimates:

 

  • The IG Corporate WTD total is 108.88% of this week’s syndicate midpoint average forecast or $23.724b vs. $21.79b.
  • MTD we’ve priced 98.36% of the syndicate forecast for October IG Corporate new issuance or $90.178b vs. $91.68b.
  • There are now 8 issuers in the IG credit pipeline.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • Mischler Financial is proud to have been named a Selling Group member on today’s $1bn Ford Credit Auto Lease Trust Series 2017-B. Thank you Team Ford for choosing Mischler from among your diversity candidates.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 7 IG Corporate-only new issues was <18.71> bps.
  • BAML’s IG Master Index was unchanged at +101 tying its post Crisis low set with last Friday’s close.
  • BAML’s IG Master Index saw 3 of the 4 IG asset classes set or tied new post Crisis lows as follows: “AA” +59 (tied), “A” +79 (tied) and “BBB” +130 (set).
  • 3 of the 19 major IG sectors set new post Crisis lows as follows: Banking (+84), Basic Industry (+127) and Industrials (+105).
  • 6 of the 19 major IG sectors tied their post Crisis lows as follows: Cap Goods (+79), Consumer Products (+85), Insurance (+110), Services (+102), Technology (+76) and Transportation (+106).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 0.95 vs. 0.96 while setting yet another new low.
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +144 vs. +143.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $15.5b on Monday versus $13.8b on Friday and $14.3b the previous Monday.
  • The 10-DMA stands at $16.4b.

 

Global Market Recap

 

  • U.S. Treasuries – USTs market continues to struggle. 10yr closed over 2.40%.
  • Overseas Bonds – JGB’s mixed & flatter. Down day in Europe.
  • 3mth Libor – Set at its highest yield (1.37064%) since January 2009.
  • Stocks – Earnings sends U.S. stocks higher. Dow at all-time high.
  • Overseas Stocks – Asia weaker expected. Japan (record winning streak). Europe better.
  • Economic – All 3 Markit PMI’s were better but Richmond manufacturing was weaker.
  • Overseas Economic – Japan data weaker. Europe data mixed but solid overall.
  • Currencies – USD better bid vs. 4 of the Big 5 bit the DXY Index was little changed.
  • Commodities – CRB traded at high since May. Crude & gasoline up. Gold down.
  • CDX IG: -0.20 to 52.73
  • CDX HY: -0.44 to 308.86
  • CDX EM: +0.34 to 174.84

*CDX levels are as of 3:30PM ET today.

-Tony Farren

 

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

 

IG Corporate New Issuance This Week
10/23-10/27
vs. Current
WTD – $23.724b
October 2017 vs. Current
MTD – $90.178b
Low-End Avg. $20.75b 114.33% $90.96b 99.14%
Midpoint Avg. $21.79b 108.88% $91.68b 98.36%
High-End Avg. $22.83b 103.92% $92.42b 97.57%
The Low $15b 158.16% $110b 81.98%
The High $30b 79.08% $75b 120.24%

 

The Goldman Sachs Group, Inc. $2.5b 21nc20 Fixed-to-Floating Senior Unsecured Global Notes

 

Today’s Goldman Sachs transaction was a $7bn three-part comprised of a 5nc4 fixed-to-floater as well as a 5yr FRN both due 10/31/2022.  Mischler proudly served as an active Co-Manager on today’s longest tranche of that issuance – the 21nc20 fixed-to-floating due 10/31/2038 so I am writing about that tranche this evening.

It’s important to note that in speaking with today’s accounts they like the pro-U.S. growth sentiment and rates that are helping to boost markets especially for bank and finance issuers.  Broader corporate tax reform will certainly lead to additional M&A activity ahead which is good for banks/finance. Several international accounts expressed their view that U.S. banks as flight to relative safety underscore an overall bullish sentiment in the sector.  Other investors were attracted by some additional yield compared to the risk-reward in European banks and Asian banks.  We’ve seen some front-loaded supply in the sector post Q3 earnings but the demand for GS paper has been consistently strong.

  • BAML’s IG Master Index was unchanged at +101 tying its post Crisis low set with last Friday’s close.
  • BAML’s IG Master Index saw 3 of the 4 IG asset classes set or tied new post Crisis lows as follows: “AA” +59 (tied), “A” +79 (tied) and “BBB” +130 (set).
  • 3 of the 19 major IG sectors set new post Crisis lows as follows: Banking (+84), Basic Industry (+127) and Industrials (+105).
  • 6 of the 19 major IG sectors tied their post Crisis lows as follows: Cap Goods (+79), Consumer Products (+85), Insurance (+110), Services (+102), Technology (+76) and Transportation (+106).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 0.95 vs. 0.96 while setting yet another new low.

 

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

For relative value we looked to the outstanding GS 3.691% due 6/05/2028 6nc5 fixed-to-floating that priced on May 31st that was quoted today T+119 (G+120) pre-announcement.

Curves on comparable FIGs show an average 11- to 21-year spread differential of <13> bps. Applying that to the GS 11nc10 pegs fair value at T+106 nailing NIC on today’s new 21nc20 F-t-F as 2 bps.

 

GS Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
21nc20 F-t-F
10/31/2038
+120-125 +110a (+/-2) +108 +108 <14.5> bps 2 bps 106/104 <2>

 

………and here’s a snap shot of today’s final book size and oversubscription rate:

 

GS Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
21nc20 F-t-F
10/31/2038
$2.5b $5bn 2.00x

 

Final Pricing – The Goldman Sachs Group, Inc. f-t-f Perp NC5 Preferred

GS $2.5b 4.017% 10/31/2038 21nc20 fixed-to-floating @ $100.00 T+108 (Back-end: 3mL+137.3)

 

Have a great evening!

Ron Quigley

 

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.
10/23
AVERAGES
WEEK 10/16
AVERAGES
WEEK 10/09
AVERAGES
WEEK 10/02
AVERAGES
WEEK 8/25
AVERAGES
WEEK 8/18
AVERAGES
WEEK 9/11
New Issue Concessions 1.33 bps 0.41 bps <0.38> bps 1.18 bps 1.38 bps 0.62 bps 1.40 bps
Oversubscription Rates 2.23x 2.89x 3.03x 3.50x 3.31x 3.18x 3.27x
Tenors 6.20 yrs 8.85 yrs 9.77 yrs 12.00 yrs 8.50 yrs 8.21 yrs 9.84 yrs
Tranche Sizes $793mm $804mm $906mm $608mm $645mm $483mm $674mm
Avg. Spd. Compression
IPTs to Launch
<12.75> bps <16.81> bps <19.81> bps <18.40> bps <20.19> yrs <18.40> bps <18.91> bps

  

Rates Trading Lab

 

Most of today’s trading was confined to a tight range with yields slowly migrating higher as the curve steepened. Then came the news that John Taylor had reportedly won a straw poll on a show of hands when President Trump asked GOP Senators about their Fed pick. Market got hit with the belly leading the sell-off and 5yrs traded at 2.044%, 10yr at 2.4225% and 30yr 2.934%. Stops were hit in futures as TY touched 124-18 before bouncing. Taylor had a big day in the betting pools, for what it’s worth, solidifying his second place standing. https://www.predictit.org/Market/3306/Who-will-be-Senate-confirmed-Fed-Chair-on-February-4%2C-2018 Lost in the fray were reports that the trio of Corker, McCain and Paul might not support a tax cut program if not revenue neutral and that Jeff Flake bowed out of the Arizona Republican race, but not before saying that “[w]ithout fear of the consequences and without consideration of the rules of what is politically safe, we must stop pretending that the conduct of some in our executive branch are normal. They are not normal. Reckless, outrageous and undignified behavior has become excused as telling it like it is when it is actually reckless, outrageous and undignified.” Meanwhile, stocks carried on, with records falling once again and the financial networks straining to contain their giddiness.

 

Thoughts:

Today’s price action was a textbook case of why this market is becoming so difficult to trade. I understand that a Taylor chairmanship and its potentially consequential rules-based policy metrics is a decidedly hawkish event. Countering that, however, is more stagnation on the legislative front. Senators Corker and Flake are now question marks in the Republican camps along with the fiscal conservatives. I know we have broken through established support levels and that it may trigger a further sell-off on that basis alone, but I think this is a counter-trade. Whatever happens, it will happen fast. Machines can hit bids and lift offers faster than you can blink.

-Jim Levenson

 

UST Resistance/Support Table

 

CT3 CT5 CT7 CT10 CT30
RESISTANCE LEVEL 99-30 99-19+ 99-22 99-10 97-23
RESISTANCE LEVEL 99-27+ 99-14 99-14+ 99-00 97-12+
RESISTANCE LEVEL 99-25 99-102 99-08+ 98-23+ 96-28
         
SUPPORT LEVEL 99-22+ 99-052 99-02+ 98-15+ 96-11
SUPPORT LEVEL 99-196 99-01+ 98-28+ 98-07+ 95-30
SUPPORT LEVEL 99-17+ 98-31 98-24+ 98-01 95-24

 

New Investment Grade Corporate Debt Issues Priced

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

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State of CA GO Bond Leads Muni Deals Scheduled For Week; Harvey Upends Texas
August 2017      Muni Market, Recent Deals   

Mischler Muni Market Market Update for the week of 08-28-17 looks back to last week’s metrics and provides a focused lens on muni bond new issuance scheduled for the upcoming week. Of greatest importance, the entire team at Mischler Financial Group extends heartfelt prayers and thoughts to the tens of thousands of Texans who are impacted by Hurricane Harvey. As always, the Mischler Muni Market Outlook offers public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of the prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings tentatively scheduled for this week’s issuance.

Last week muni volume was about $4.4 billion. This week volume is expected to be $6.9 billion. The negotiated market is led by $2.5 billion general obligation bonds for the State of California. The competitive market has only two bond issues more that $100 million, and is led by $480.9 million for Prince George’s County, Maryland in 2 bids on Tuesday. 

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

For reading ease, please click on image below 

mischler muni market outlook week aug 28

Minority broker-dealer Mischler Financial Group Inc., the oldest diversity firm owned and operated by Service-Disabled Veterans is widely-known for our presence across the primary Primary Debt Capital Markets (DCM) space. Since 2014 alone, Mischler Financial has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt underwriting and issuance of preferred shares 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 are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

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Aloha GO Bonds-Hawaiian Style-Muni Deals Scheduled This Week
August 2017      Muni Market, Recent Deals   

Mischler Muni Market Market Update for the week of 08-14-17 looks back to last week’s metrics and provides a focused lens on muni bond new issuance scheduled for the upcoming week, with a “Aloha” to GO Bonds-Hawaiian Style, as City and County of Honolulu, Hawaii is scheduled to issue $411 mil in tax exempt and taxable general obligation bonds. As always, the Mischler Muni Market Outlook offers public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of the prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings tentatively scheduled for this week’s issuance.

Last week muni volume was about $5.6 billion. This week volume is expected to be $6.7 billion. The negotiated market is led by $411.0 million tax exempt and taxable general obligation bonds (GO Bonds) for the City and County of Honolulu, Hawaii. The competitive market is led by $1.3 billion general obligation bonds for the State of Maryland 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 203.276.6656

For reading ease, please click on image below aloha-GO-Bonds-Hawaiin Style-Muni Deals This Week

Since 2014 alone, minority broker-dealer Mischler Financial Group Inc.’s  presence across the primary Primary Debt Capital Markets (DCM) space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 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 are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

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Day’s IG DCM: 14 Issuers Float $14.67b in New Corporate Debt
August 2017      Debt Market Commentary, Recent Deals   

Quigley’s Corner 08.07.17 :  Another New Corporate Debt Issue Milestone


Investment Grade New Issue Re-Cap – Most Amount of Issuers YTD; 14 Issuers, $14b+

Today’s IG New Debt Issuance & Secondary Market Talking Points

Global Market Recap

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and August

The Best and the Brightest: IG DCM Syndicate Forecasts and Sound Bites for Next Week 

This Week’s IG New Issues and Where They’re Trading

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

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending August 2nd               

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

 

Today’s IG Corporate dollar DCM finished with a YTD record of 14 issuers that priced 22 tranches between them totaling $14.675b.  Leading the pack: Aetna (NYSE: AET), American Water Capital, Ares Capital (NASDAQ: ARCC), Duke Energy (NYSE: DUK), Kraft Heinz (NYSE:HNZ), Regions Financial (NYSE: RF), and UBS Group (NYSE: UBS).  The SSA space was quiet.  This past March 6th the IG Corporate space featured 12 issuers and April 27th also hosted 12 IG Corporate issuers.  But today takes the cake for the most number of issuers YTD. The DJIA closed at its 9th consecutive new high. The S&P also ended the session at a new all-time high.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

  • The IG Corporate WTD total is 42.80% of this week’s syndicate midpoint average forecast or $14.675b vs. $34.29b.
  • MTD we’ve priced 45.13% of the syndicate forecast for July or $35.70b vs. $79.10b.
  • There are now 4 issuers in the IG credit pipeline.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • Kimco Realty Corp. upsized its $25 par PerpNC5 Class “L” cumulative redeemable preferred stock new issue to $225mm from $150mm at the launch and at the tightest side of price talk.
  • Regions Financial Corp. dropped the 5-year FRN tranche from today’s earlier announced two-part 5-year FXD/FRN new issue having secured sufficient funding in the 5-year fixed rate tranche.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 20 IG Corporate-only but ex-Kimco Realty $25 par Preferred new issues, was <15.69> bps.
  • The spread compression across all 21 IG Corporate new issues including the Kimco Realty $25 par Preferred was <15.24> bps.
  • The average spreads of 1 of the 19 major industry sectors set a new post-Crisis low while 2 of the 19 tied their post-Crisis lows. That’s 15.79% of the sectors.
  • BAML’s IG Master Index was unchanged at +109.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.05 vs. 1.04.
  • Standard & Poor’s Investment Grade Composite Spread tightened 2 bps to +150 vs. +152.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $14.2b on Friday versus $19.6b on Thursday and $14.3b the previous Friday.
  • The 10-DMA stands at $17.6b.

 

Global Market Recap

 

  • U.S. Treasuries – Not fazed by strong Employment Report & this week’s Treasury Refunding.
  • Overseas Bonds – JGB’s down. Good day Gilts. Bund unchanged. Peripherals better.
  • Stocks – Dow looking for 9th record high close & 11th winning day in a row.
  • Overseas Stocks – Asia rallied to a 10yr high. Europe had more red than green.
  • Economic – Not a factor in the U.S. today. PPI on Thursday & CPI on Friday.
  • Overseas Economic – China foreign reserves up. Japan better. Germany IP weaker.
  • Currencies – Quiet day on the FX front. U.S. outperformed 4 of the Big 5 (small).
  • Commodities – Crude oil small loss, gold basically unchanged & copper 2+ year high.
  • CDX IG: +0.24 to 57.95
  • CDX HY: +0.38 to 322.22
  • CDX EM: -3.47 to 183.20

*CDX levels are as of 3:30PM ET today.

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH
Asian Political Tensions
·        N. Korea launches ICBM on 7/28. Jong-Un claims Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population).  Fear that NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has failed. U.S. lofts Trident missile in Pacific Ocean in response. China insiders say PRC does not have the influence on NOKO that the U.S. thinks it does.
ELEVATED
BREXIT Fallout
·        U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent.
Venezuela – civil unrest as Maduro dictatorship claims bogus election outcome favors unlimited powers and a new constitutional assembly in elections that U.S. and key LATAM nations will not acknowledge. Caracas named most dangerous city in the world with highest murder rate. VZ gov’t stopped publishing crime stats a decade ago. Dictatorship in our Western Hemisphere. U.S. Tsy. freezes Maduro family assets.
CAUTION
“U.S. political gridlock”
·        Trump financial, healthcare, tax and infrastructure reform challenges & consensus GOP support to pass legislation questioned; U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions against Russia in 98-2 vote. Russia in expansion mode.

·        GCC Crisis as Saudis, UAB, Egypt, Bahrain & 5 others cut diplomatic ties with Qatar; Land, air and sea blockade. Demands include closing its Al Jazeera network & a Turkish military base, severing ties w/Muslim Brotherhood, Hezbollah, al-Qaeda & ISIS.

·        Italian debt-to-GDP ratio is 133% – world’s 3rd highest.

·        Despite destroying the Caliphate, ISIS will be scattered across a wider MENA region and Europe.

·        Cybercrime, ransomware, viruses & hacking are winning cyber wars. The latest attack hit four continents, law firms, food companies, power grids, pharma & gov’ts (Ukraine & Russia).

·        Central banks shrinking balance sheets/higher volatility in 2H17; ECB dovishness; low rates persist.

·        Renewed tensions along the India-Pakistan cease fire line dividing Indian-controlled Kashmir.

MODERATE ·        China hard landing – rising corporate debt have the OECD and IMF concerned.
MARGINAL
2018 U.S. Recession
·        Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak?; “Maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns.

 

Syndicate IG Corporate-only Volume Estimates This Week and August

 

IG Corporate New Issuance This Week
8/07-8/11
vs. Current
WTD – $14.675b
August 2017 vs. Current
MTD – $35.70b
Low-End Avg. $33.46b 43.86% $78.37b 45.55%
Midpoint Avg. $34.29b 42.80% $79.10b 45.13%
High-End Avg. $35.12b 41.79% $79.83b 44.72%
The Low $30b 48.92% $60b 59.50%
The High $45b 32.61% $100b 35.70%

 

UBS Funding Group (Switzerland) AG $3.25bn 2-part 6NC5 Fixed-to-Floating and 6NC5 FRNs Deal Dashboard

Let’s go straight to the “QC” Deal Dashboard for pricing intel and book sizes/bid-to-cover rates.  Here’s a look at spread compression throughout price evolution during today’s two-part book build from IPTs to the launch and final pricing:

Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
6NC5 FRNs 3mL+equiv 3mL+equiv 3mL+95 3mL+95 <20> bps 2.5
6NC5F-t-F +125a +110a (+/-5) +105 +105 <20> bps 2.5

 

………and here’s a snap shot of today’s final book sizes and oversubscription rates:

 

Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
6NC5 FRNs $1.25bn $2.20bn 1.76x
6NC5 F-t-F $2bn $3.5bn 1.75x

 

Final Pricing – UBS Funding Group (Switzerland) AG $3.25bn 2-part 6NC5 Fixed-to-Floating and 6NC5 FRNs

UBS $1.25bn 6nc5 FRNs due 8/15/2023(22) @ $100.00 3mL+95.

UBS $2bn 2.859% 6nc5 due 8/15/2023(22) @ $100.00 to yield 2.859% or T+105.

 

 

Have a great evening!

Ron Quigley

 

Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

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

…..and here’s another look at last week’s day-by-day re-cap of key primary market driver averages for IG Corporates only followed by the prior six week’s averages:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
7/31
TUES.
8/01
WED.
8/02
TH.
8/03
FRI.
8/04
AVERAGES
WEEK 7/31
AVERAGES
WEEK 7/24
AVERAGES
WEEK 7/17
AVERAGES
WEEK 7/10
AVERAGES
WEEK 7/03
AVERAGES
WEEK 6/26
New Issue Concessions <4.05> bps 0.375 bps 1.19 bps 6.80 bps N/A 0.06 bps 1.68 bps <0.05> bps 2.46 bps 2.25 bps <0.24> bps
Oversubscription Rates 4.35x 2.82x 3.09x 1.95x N/A 3.34x 3.30x 3.37x 2.97x 2.38x 3.29x
Tenors 12.83 yrs 12.80 yrs 12.55 yrs 8.12 yrs 6.5 yrs 11.96 yrs 13.03 yrs 10.28 yrs 8.96 yrs 12.50 yrs 9.43 yrs
Tranche Sizes $466mm $933mm $627mm $721mm 325 $651mm $1,512mm $1,187mm $765mm $1,437mm $527mm
Avg. Spd. Compression
IPTs to Launch
<19.73> bps <15.33> bps <17.98> yrs <19.92> bps N/A <18.56> bps <21.15> bps <18.10> bps <19.80> bps <20.50> bps <17.35> bps

 

New Issues Priced

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Muni Bond New Issuance Scheduled Week 080717-Mischler
August 2017      Muni Market, Recent Deals   

Mischler Muni Market Market Update for the week of 08-07-17 looks back to last week’s metrics and provides a focused lens on muni bond new issuance scheduled for the upcoming week. As always, the Mischler Muni Market Outlook offers public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of the prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings tentatively scheduled for this week’s issuance.

Last week muni volume was about $7.0 billion. This week volume for muni bond issuance is expected to be $7.3 billion. The negotiated market is led by $1.1 billion tax-exempt and taxable bonds for Cleveland Clinic Health System issued by the State of Ohio. The competitive market is led by $1.5 billion tax-exempt and taxable bonds for New York City Transitional Finance Authority, New York, on Tuesday.

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

For reading ease, please click on image below

muni-bond-new-issuance-080717

Since 2014 alone, Mischler Financial Group Inc.’s  presence across the primary Primary Debt Capital Markets (DCM) space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 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 are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

(more…)

Mischler Muni Market Outlook; Pending Municipal Debt Deals Week of March 20
March 2017      Muni Market, Recent Deals   

Mischler Muni-bond Market Outlook for the week commencing 03.20.17 looks back to last week’s metrics and provides a lens focused on pending municipal debt deals scheduled. As always, the Mischler Muni Market snapshot provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads, money flows and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $4.4 billion. This week volume is expected to be $4.5 billion. The negotiated market is led by $594.0 million for the New York State Environmental Facilities Corp on behalf of New York City Municipal Water Finance Authority. The competitive market is led by $239.9 million general obligation bonds for San Francisco Unified School District, California in 2 bids on Tuesday.

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

For reading ease, please click on image below

mischler-muni-market-outlook

 

 

 

 

 

 

 

 

 

Mischler Financial Group debt capital market expertise includes Debt Origination, Distribution, Primary Market Access and Secondary Market trading across the full spectrum of fixed income markets. Our value-add is courtesy of our 18-member team of debt market veterans. a team that makes MFG’s Fixed Income Group a compelling partner to Fortune issuers, corporate treasurers, municipal debt market issuers and the world’s leading institutional investors.

To illustrate our presence within the Debt Capital Markets space: since 2014 alone,  Mischler has led, co-managed and/or served as selling group member for more than $600 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 a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE) and a recognized minority broker-dealer. Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

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