Browsing articles tagged with "CITI Archives - Mischler Financial Group"
Quigley’s Corner 04.16.18 : Bank Earnings Bolster Bond Issuance
April 2018      Debt Market Commentary   

Quigley’s Corner 04.16.18 : Bank Earnings Bolster Bond Issuance; Citi &JPM Float $6.5b

 

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 March
Global Market Recap
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
2018 Lipper Report/Fund Flows – Week ending April 11th

IG Credit Spreads by Rating
IG Credit Spreads by Industry
New Issue Pipeline
M&A Pipeline
Economic Data Releases
Rates Trading Lab

 

Investment Grade New Issue Re-Cap – Citi & JPM Ride Strong Earnings to Print $6.5b

 

Today the IG dollar DCM hosted 6 issuers across 12 tranches totalling $12.05b.  Investors bought on earnings today with both Citigroup and J.P. Morgan Chase & Co. leading the way.  The two six-pack banks represented $6.50b or 54% of today’s issuance on the heels of last Friday’s earnings beats. Citigroup topped estimates posting $1.68 EPS vs. $1.61 forecasts. JPM delivered $2.37 vs. $2.28. 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:

  • MTD we’ve priced 51.92% of the syndicate forecast for February IG Corporate new issuance or $47.454b vs. $91.40b.
  • There are now 19 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 12 IG Corporate-only new issue was <18.92> bps.
  • BAML’s IG Master Index tightened 1 bp to +111 vs. +112. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.06.  (0.85 is its post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +142 vs. +141. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $15.5b on Friday versus $17.3b on Thursday and $13.8b the previous Friday.
  • The 10-DMA stands at $17b.

 

Syndicate IG Corporate-only Volume Estimates for April

 

IG Corporate New Issuance April 2018 vs. Current
MTD – $47.454b
Low-End Avg. $90.60b 52.38%
Midpoint Avg. $91.40b 51.92%
High-End Avg. $92.20b 51.47%
The High $80b 59.32%
The Low $110b 43.14%

 

Global Market Recap

  • U.S. Treasuries – Closed red except the 30yr. Nice bounce back during NY trading hours.
  • Overseas Bonds – JGB’s, Bunds and Gilts all lost ground.
  • SOFR – Set at 1.72%.
  • 3mth Libor – Set at the highest yield since November 2008 (2.35509%).
  • Stocks – Strong gains heading into the close.
  • Overseas Stocks – Nikkei up. China and Hong Kong hit. Europe more red than green.
  • Economic – Best reading for retail sales in the last 4 months.
  • Overseas Economic – German wholesale price index was tame.
  • Currencies – USD was weaker vs. all of the Big 5.
  • Commodities – Energy struggled today after rallying last week.
  • CDX IG: -1.89 to 59.45
  • CDX HY: -7.84 to 331.95
  • CDX EM: -0.62 to 138.91
  • VIX: -0.65 to 16.76

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

-Tony Farren

 

Below please find a synopsis of the day’s primary investment grade corporate bond market issuance activity, along with the full view of the debt capital markets from the perch of Mischler Financial Group’s Fixed Income Syndicate desk. Have a great evening!
Ron Quigley, Managing Director

 

New Issues Priced

 

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Abu Dhabi Nat’l. Energy Co. A3/A 4.375% 4/23/2025 750 +185a +165a (+/-5) +160 +160 CITI/HSBC/FRAB/ING/MIZ
SCOT/SMBC
Abu Dhabi Nat’l. Energy Co. A3/A 4.875% 4/23/2030 1,000 +240a +210a (+/-5) +205 +205 CITI/HSBC/FRAB/ING/MIZ
SCOT/SMBC
Citigroup Inc. Baa1/A 4.075% 11nc10 F-t-F
4/23/2029
2,000 +140a +125-128 +125 +125
Back-end:
3mL+119.2
CITI-sole
Delta Air Lines Inc. Baa3/BBB- 3.40% 4/19/2021 600 +115a +95a (+/-5) +90 +90 BNPP/CS/DB/FITB/MS/WFS(a)
+11 (p)
Delta Air Lines Inc. Baa3/BBB- 3.80% 4/19/2023 500 +140a +120a (+/-5) +115 +115 BNPP/CS/DB/FITB/MS/WFS(a)
+11 (p)
Delta Air Lines Inc. Baa3/BBB- 4.375% 4/19/2028 500 +170a +160a (+/-5) +155 +155 BNPP/CS/DB/FITB/MS/WFS(a)
+11 (p)
Hanwha Life Insurance A3/A- 4.70% 30nc5
4/23/2023
1,000 5.00%a 4.75%a (+/-5) 4.70% $100.00
Reset:+200
then +300
BAML/JPM/NOM/UBS/HANW
J.P. Morgan Chase & Co. A3/A+ FRN 6nc5
4/23/2024
500 3mL+equiv 3mL+equiv 3mL+73 3mL+73 JPM-sole
J.P. Morgan Chase & Co. A3/A+ 3.559% 6nc5
4/23/2024
1,750 +95a +90a (+/-2) +88 +88 JPM-sole
J.P. Morgan Chase & Co. A3/A+ 4.005% 11nc10
4/23/2029
2,250 +125a +120a (+/-2) +118 +118 JPM-sole
United Overseas Bank Aa1/AA- FRN 4/23/2021 500 3mL+equiv 3mL+equiv 3mL+48 3mL+48 CITI/CS/HSBC/JPM/UOB
United Overseas Bank Aa1/AA- 3.20% 4/23/2021 700 REV. IPTS: +85a
+90a
+72-75 +72 +72 CITI/CS/HSBC/JPM/UOB

 

…..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.
4/09
TUES.
4/10
WED.
4/11
TH.
5/12
FRI.
5/13
AVERAGES
WEEK 4/09
AVERAGES
WEEK 4/02
AVERAGES
WEEK 3/26
AVERAGES
WEEK 3/19
AVERAGES
WEEK 3/12
AVERAGES
WEEK 3/05
New Issue Concessions 10.80 bps 2.60 bps N/A 8.00 bps N/A 7.13 bps 0.57 bps 8.18 bps 15.80 bps 9.16 bps 5.05 bps
Oversubscription Rates 3.78x 2.13x N/A N/A N/A 3.10x 4.07x 2.53x 2.86x 2.16x 2.88x
Tenors 9.63 yrs 3.80 yrs N/A 10.00 yrs N/A 7.57 yrs 10.55 yrs 13.15 yrs 11.82 yrs. 9.49 yrs 10.43 yrs
Tranche Sizes $679mm $900mm N/A $600mm N/A $752mm $812mm $488mm $784mm $568mm $1,559mm
Avg. Spd. Compression
IPTs to Launch
<17.86> bps <14.70> bps N/A <15.00> bps N/A <16.42> bps <21.41> bps <12.41> bps <13.78> bps <7.92> bps <15.63> bps

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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

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