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Mischler Investment Grade Debt Market Commentary-Memorial Day 2017 Edition
May 2017      Debt Market Commentary   

“Quigley’s Corner” – Memorial Day 2017 Edition; Best & Brightest Sound Off re: Investment Grade Corporate Debt Forecast

mischler financial veteran-owned broker-dealer-memorial-day-2017

Investment Grade Debt New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

The “QC” Geopolitical Risk Monitor

Syndicate IG Corporate-only Volume Estimates This Week and May

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

“Knowing the Past for the Future” – A Look at a Decade’s Worth of June IG Corporate and SSA Issuance

About Memorial Day

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

Lipper Report / Fund Flows

IG Credit Spreads by Rating

IG Credit Spreads by Industry

Economic Data Releases

New Issue Pipeline

M&A Pipeline

Rates Trading Lab


A “thank you” goes out to all the 24 syndicate desk operatives who I polled this morning in the “QC” and who truly are the “Best and the Brightest” in our world of fixed income syndicate.  You see, SIFMA has declared today an early close ahead of Monday’s Memorial Day and as such we’re all looking to get out a bit ahead of the crowd so-to-speak.  They all complied and I have for your reading pleasure all 24 of those syndicate gurus patiently waiting below with their IG corporate new issue thoughts and forecasts not only for next week’s supply but for all of June as well.  So, sit back, relax and before your long weekend begins, get the data download as to what we expect for next week and month. After that enjoy this weekend with your families and please remember those sacrifices made by our nation’s men and women in uniform.  Please also take the time to read the Memorial Day piece above that says it all and the scroll below for General John A. Logan’s Memorial Day Order known as General Order No.11 May 5th, 1868 issued to honor our nation’s dead in the Civil War. It is the foundational starting point to our nation’s honoring our veterans on Memorial Day this Monday.

Thank you all! -RQ


Today’s IG Primary & Secondary Market Talking Points


  • BAML’s IG Master Index was unchanged at +118.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.13.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +161.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $17.2b on Thursday versus $19.7b on Wednesday and $15.2b the previous Thursday.
  • The 10-DMA stands at $16.9b.


The “QC” Geopolitical Risk Monitor


Risk Level/Main Factor Geopolitical Risks
Asian Political Tensions
·     ISIS attack in Manchester, U.K. kills 22 wounds 59/U.K. on highest terror alert – “CRITICAL”

·     N. Korea “deployment and mass production” of ballistic missiles that could reach Japan & Guam.

·     Increasing tensions between North Korea (pop: 24mm) & South Korea (pop: 44mm).

·     Dictator Kim Jong-Un increasingly belligerent./Political disruption in Pacific Rim.

BREXIT Fallout
·     Pres. Trump labels terrorists “Losers”; urges unity of all faiths to destroy radical factions.

·     Contentious U.K./EU negotiations over BREXIT. U.K. threatens to abandon talks.

·     2nd Scottish independence referendum Fall 2018 or Spring 2019. Also support for a vote in Ireland.

“Trump Factor”
Fed Balance Sheet
·     Trump tax reform challenges & consensus GOP support to pass legislation questioned.

·     FBI Controversy over firing of Comey & Russia scandal.

·     Potential mid-term election loss to Dems in 11/2018 will impede any progress/GOP dissension.

·     U.S. partisan politics/gridlock/media war against Trump

·     China hard landing?/L-T Moody’s downgrade to A1 vs. Aa3; outlook to “stable” from “negative.”

·     Shrinking Fed balance sheet/weaker technicals/wider spreads/higher volatility 2H17.

MODERATE ·     Syria/Terrorism/Venezuelan civil unrest/Brazil’s scandal & new recession.

·     Russia meddling in international elections/Russia in expansion mode.

2018 U.S. Recession
·    Highly fractious Italian political landscape. 64 governments in 72 Post WWII years.

·    Italy’s 5 Star Movement & EU skeptic parties have more influence than in other EU elections.

·    As Italian elections approach, EU risks increase significantly/Italian debt-to-GDP ratio is 133%.

·    A “QUITALY” referendum vote?

·    Chance of a 2018 U.S. recession.


Syndicate IG Corporate-only Volume Estimates This Week and May


IG Corporate New Issuance This Week
vs. Current
WTD – $39.20b
May 2017
vs. Current
MTD – $148.138b
Low-End Avg. $29.69b 132.03% $122.27b 121.16%
Midpoint Avg. $30.48b 128.61% $123.42b 120.03%
High-End Avg. $31.27b 125.36% $124.56b 118.93%
The Low $20b 196.00% $100b 148.138%
The High $40b 98.00% $150b 98.76

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

I am happy to announce that the “QC” once again received 100% unanimous participation from all 24 syndicate desks surveyed for today’s “Best & Brightest” edition!  19 of those participants are among 2017’s YTD top 21 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  23 are in the top 27 of that same table. The 2017 League table can be found on your terminals at “LEAG” + [GO] after which you select (US Investment Grade Corporates).  The participating desks represent 81.39% of all IG dollar-denominated new issue underwriting as of today’s table share percentage which simply means they’re the ones with visibility.   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. My weekly technical data re-cap and question posed to the “Best and the Brightest” early this morning was as follows:

To frame this week’s survey question, here are this week’s IG new issue volume talking points:

  • The IG Corporate WTD total finished over 128% above this week’s syndicate midpoint average forecast or $39.200b vs. $30.48b.
  • MTD we’ve now priced just over 120% of the syndicate projection for May or $148.138b vs. $123.42b.
  • The all-in MTD total (IG Corporates plus SSA) currently stands at $171.038b ranking this May as the 7th highest volume month of all-time and second largest of 2017 behind January’s #1 overall ranking at $227.283b.
  • As of today, the YTD IG Corporate-only volume is $624.514b vs. $602.869 on May 25th, 2016 or 3.59% more than a year ago.
  • The all-in or IG Corporate plus SSA YTD volume is $778.656b vs $791.618 on May 25th, 2016 or <1.64%> less than last the year ago total.

Here are this week’s five key primary market driver averages from the 48 IG Corporate-only deals that priced:

  • NICS:  <5.45> bps
  • Oversubscription Rates: 3.74x
  • Tenors:  11.37 years
  • Tranche Sizes: $817mm
  • Spread Compression from IPTs to the Launch: <20.05> bps

Here’s how this week’s performance data compares against last week’s:

  • Average NICs tightened dramatically by <6.69> bps to <5.45> bps vs. 1.24 bps.
  • Over subscription or bid-to-cover rates, the measure of demand, increased 0.54x to 3.74x vs. 3.20x. 
  • Average tenors extended by 2.68 years to 11.37 vs. 8.69 years.
  • Tranche sizes decreased by $114mm to $817mm vs. $931mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s 48 IG Corporate-only new issues tightened <2.24> bps to <20.05> bps vs. <17.81> bps.
  • Standard and Poor’s Investment Grade Composite Spreads tightened 1 bp to +161 vs. +162.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning was unchanged at 1.13. 
  • Week-on-week, BAML’s IG Master Index tightened 1 bp to +118 vs. +119. 
  • Spreads across the four IG asset classes widened 0.25 bps to 13.25 bps vs. 13.00 as measured against their post-Crisis lows. 
  • The 19 major industry sectors also tightened 0.68 bps to 16.58 vs. 17.26.
  • For the week ended May 24h, Lipper U.S. Fund Flows reported an inflow of $2.089b into Corporate Investment Grade Funds (2017 YTD net inflow of $57.067b) and a net outflow of $567.960m from High Yield Funds (2017 YTD net outflow of $6.008b).
  • The OIS forward market – the best measure of implied probability for a June rate hike – is 80%.
  • Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 54 deals that printed, 43 tightened versus NIP for a 79.50% improvement rate while 6 widened (11.00%) and 5 were flat (9.50%).

Entering today’s Friday’s session here’s how much we issued this week:

  • IG Corps: $39.20b
  • All-in IG (Corps + SSA): $49.70b

This week lived up to expectations and to within 3.50% of the highest estimate which was $40b.  The headliner was of course this week’s terrible suicide bombing in Manchester, U.K. targeting children at a concert leaving 22 killed, 59 wounded and the U.K. on its highest national terror alert – “CRITICAL.” Trump controversies (FBI/Russia) remained backstage as his first foreign tour took center stage. The takeaways were the Middle East trip with net positives in Saudi Arabia and Israel. Trump also challenged European leadership to pay their fair share as NATO members.  He was vocal about the war on terror, labeling terrorists “LOSERS” and emphasized the unity of all faiths particularly Christians, Jews and Muslims to “eradicate terrorists from our planet.” The OIS forward market – the best measure of implied probability for a June rate hike – is 80%. North Korea continued test firing missiles; China was downgraded to “A1” from Aa3” by Moody’s though placed on outlook “stable” from “negative”; Italian elections are the next big event coming to Europe with a possible “QUITALY” on tap as myriad political factions share one commonality – leaving the EU in a nation that has seen 72 post WWII governments in 72 years!; Italian debt to GDP is a staggering 133%; There are 5 IG Corporate or Yankee new issues in the pipeline that we know about.

Along those lines today’s once a month TWO-PART question is, “what are your thoughts and numbers for BOTH NEXT WEEK and JUNE IG Corporate new issue volume? Thank you in advance for your time and contribution! 

I hope my daily “QC” and these Friday data downloads are helpful and informative to you.  Without your input this “QC” survey can’t get done.  I truly appreciate your meaningful sound bites that bring your numbers and ranges to life. A LOT of issuers that your firm banks read this every day and they love it!  I consistently receive positive feedback about the “QC” from them directly.  So, you should know that you are personally contributing to a much bigger picture while also helping the nation’s oldest Service Disabled Veteran broker-dealer build in a more meaningful and sustainable way especially during this – our Memorial Day Monthly Pledge Drive in which we donate 10% of our firm’s profits to veteran and other worthy causes.

Thank you very much and have a great Memorial Day weekend! -Ron


The “Best and the Brightest” in Their Own Words

Responses from fixed income syndicate desks and bookrunners canvassed in this week’s poll is available exclusively to QC email distribution list members. To receive the QC, please contact Rob Karr, Managing Director, Head of Capital Markets via



“Knowing the Past for the Future” – A Look at a Decade’s Worth of June IG Corporate and SSA Issuance


  • Across the past ten years, all-in dollar-denominated IG Corporate plus SSA June new issuance averaged $84.61b.
  • Over the past five years, all-in IG June new issuance averaged $93.03b.
  • Over the past three years, all-in IG June issuance has averaged $113.65b.
  • The past three years, June IG Corporate only issuance averaged $98.37b.
  • June SSA issuance has averaged $15.27b across the last three years.


All-in IG Issuance ($bn) IG Corps
only ($bn)
only ($bn)
2016 98.422 87.922 10.50
2015 111.906 97.156 14.75
2014 130.61 110.04 20.57
2013 42.19 40.24 1.95
2012 82.01 67.95 14.06
2011 51.24 31.33 19.91
2010 67.13 43.52 23.61
2009 119.77 64.29 55.48
2008 59.88 42.43 17.45
2007 83.00 63.07 19.93

*Note: includes TARP/TALF & FDIC insured issuance


About Memorial Day
mischler financial service-disabled veteran-owned broker-dealer
Memorial Day was the result of the Civil War with a strong desire to honor our nation’s dead. It was proclaimed by General John Logan commander of our U.S. National Army on May 30th, 1868.  New York was the first state to recognize Memorial Day in 1873. By 1890, all northern states recognized the Day.  The South refused to do so until after World War I when it was not solely to commemorate those lost in the Civil War. Memorial Day officially became a national holiday in 1971 thru an Act of Congress.

Here is how it all got started:


General Orders No.11, WASHINGTON, D.C., May 5, 1868


  1. The 30th day of May, 1868, is designated for the purpose of strewing with flowers or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion, and whose bodies now lie in almost every city, village, and hamlet church-yard in the land. In this observance no form of ceremony is prescribed, but posts and comrades will in their own way arrange such fitting services and testimonials of respect as circumstances may permit.

We are organized, comrades, as our regulations tell us, for the purpose among other things, “of preserving and strengthening those kind and fraternal feelings which have bound together the soldiers, sailors, and marines who united to suppress the late rebellion.” What can aid more to assure this result than cherishing tenderly the memory of our heroic dead, who made their breasts a barricade between our country and its foes? Their soldier lives were the reveille of freedom to a race in chains, and their deaths the tattoo of rebellious tyranny in arms. We should guard their graves with sacred vigilance. All that the consecrated wealth and taste of the nation can add to their adornment and security is but a fitting tribute to the memory of her slain defenders. Let no wanton foot tread rudely on such hallowed grounds. Let pleasant paths invite the coming and going of reverent visitors and fond mourners. Let no vandalism of avarice or neglect, no ravages of time testify to the present or to the coming generations that we have forgotten as a people the cost of a free and undivided republic.

If other eyes grow dull, other hands slack, and other hearts cold in the solemn trust, ours shall keep it well as long as the light and warmth of life remain to us.

Let us, then, at the time appointed gather around their sacred remains and garland the passionless mounds above them with the choicest flowers of spring-time; let us raise above them the dear old flag they saved from hishonor; let us in this solemn presence renew our pledges to aid and assist those whom they have left among us a sacred charge upon a nation’s gratitude, the soldier’s and sailor’s widow and orphan.

  1. It is the purpose of the Commander-in-Chief to inaugurate this observance with the hope that it will be kept up from year to year, while a survivor of the war remains to honor the memory of his departed comrades. He earnestly desires the public press to lend its friendly aid in bringing to the notice of comrades in all parts of the country in time for simultaneous compliance therewith.
  2. Department commanders will use efforts to make this order effective.

By order of


Adjutant General


Remember our Veterans

mischler financial veteran-owned broker-dealer-memorial-day-2017

Never forget those who made the ultimate sacrifice so that we can all do what we do every day.

God Bless our nation’s veterans and their families; God Bless you and your families and God Bless America!

Have a safe and wonderful Memorial Day weekend everyone!
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


IG Debt Market Issuers Confounded By Dysfunction Junction; Mischler Debt Market Comment
March 2017      Debt Market Commentary   

Quigley’s Corner 03.23.17 –Dysfunction Junction


A Very Important Message

Investment Grade Corporate Debt New Issue Re-Cap – “Dysfunction Junction”

IG Primary & Secondary Market Talking Points

Global Market Recap

Syndicate IG Corporate-only Volume Estimates for This Week and March

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

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending March 22th      

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab –Courtesy of Jim Levenson

Tomorrow’s Calendar


 Important Message to all “QC” readers:  Before we dive into the session  details re: today’s corporate debt issuance, I’d like to call your attention to a very important message from one the Fixed Income Syndicate world’s truly good people, Greg Baker of Bank of America/Merrill Lynch.  Greg is going to be competing in his third 140.6 IRONMAN challenge to raise money for a critically important cause. Without further ado I will hand it over to Greg to tell you more about it. 


Dear Friends,

I will be participating in IRONMAN Lake Placid on July 23rd, 2017 as part of the Multiple Myeloma Research Foundation (MMRF) Team For Cures.

The Goal:
Raise $10,000 for the MMRF
Swim: 2.4 miles
Bike: 112 miles
Run: 26.2miles

Multiple myeloma is the second most common form of blood cancer and, sadly, has one of the lowest five-year relative survival rates of all cancers. But while there is no cure, great progress is being made.

In fact, thanks to the important work of the MMRF, the world’s leading private funder of myeloma research, the FDA has approved TEN new treatments, including FOUR in just the past 18 months – a track record that’s unparalleled in the world of oncology. These drugs have almost tripled the lifespan of myeloma patients. And now the MMRF is funding over 20 additional treatments in various stages of development, giving hope to tens of thousands of patients and their families.

All donations are GREATLY appreciated! Thank you very much.

To donate, please click on the link:

As Winston Churchill so eloquently put it, “We make a living by what we get, but we make a life by what we give.” Greg is giving of himself, and I ask that you please find it in yourselves to donate what you can to help this incredible cause.  In the name of social responsibility, a heartfelt thank you from the guy-in-the-corner who is always in your corner.
Good luck Greg! -RQ


Investment Grade New Issue Re-Cap – Zip, Zero, Zilch Thanks to Capitol Hill and “Dysfunction Junction”

Why did nothing price in today’s rare non-Friday goose egg in our IG DCM?  Simple!  Market participants and issuers are wondering if the Trump rally will stop dead in its tracks if it cannot get an Obama Care replacement bill approved by Congress.  Fractional divides within the majority controlled Republican Party reminds us all of the “circus” that is our nation’s capital known as “The Beltway.”  If support is not achieved, this writer will forever refer to Washington, D.C. as “Dysfunction Junction.”

We are already living in a nation divided with the worst media wars being fought between left and right.  Congress made some “headway” this morning by throwing out the minimum benefits that insurers are required to provide.  The final iteration, however, may not reflect the many months that Trump and his campaign staff and advisors have had to work on a replacement plan promised to be better, stronger, more efficient and one that will save the average American lots of money, while upgrading their care and keeping their choice of doctors.  Anything less than that and it will be perceived as a failure.  The session expected an announcement from House Speaker Paul Ryan – it did not happen.  A vote was expected this evening – it will not happen. The vote on legislation has officially been delayed.  Discussions will be ongoing, beginning this evening in the House at 7:00 pm ET. Markets awaited today’s healthcare/legislative conundrum with the eagerness with which it typically saves for FOMC Press Conferences.  That’s the kind of impact this decision and how it is handled will have.

Unfortunately, and further underlying all the suspense, is the real story of political dysfunction within the GOP.  A new, improved Obama Care seems to be taking a back seat to the question “will the Freedom Caucus continue to agitate any progress within the party?” If so, it will mean a long and painful 4-year term for the Trump Administration, likley result in a loss of seats in the next election and potential control of his ability to effectively govern.  Without support from within his own party effectively means no control at all.  This is all about breaking the party’s House Freedom Caucus, comprised of 20+ Republicans who have been a thorn in the side of any Republican headway.  For now, however, just getting support for whatever bill is being rushed through is challenged to find the necessary 215 votes for its passage.  The legacy of Trump’s legendary negotiating ability – recall his book “The Art of the Deal” – is also being called into question as he faces off with the nation’s lawmakers.

For the more objective Trump supporters, this could be a major disappointment and usher in more toxic additives to the “swamp” that Trump has promised to drain.  The main issue here, however, is that as important as Trump’s first real litmus test is to keep his promises on a full repeal and replacement of Obama Care is that he and his Administration will not be able to focus on any other plans unless and until he overcomes this first major hurdle.  If it fails, President Trump’s ability to achieve his eagerly anticipated and market moving tax reduction plan will be questioned and a financial crisis of confidence could likely ensue.  Perhaps the ultimate deal maker is working on health care concessions in return with a sledge hammer of a tax reduction plan. We’ll have to wait and see. I do think we could see a CT10-year below 2.00% again in short order, after which issuers will gladly hop off the fence in unison and act on a more clear view of rate direction. Robust issuance will be the flavor of the day, but first, we could see a quiet period in our primary markets.  We’ll know more tomorrow when I send out the Friday “QC” featuring the syndicate world’s “Best and the Brightest” and their views and comments on next week’s IG Corporate issuance. So, stay tuned it will be a critically important read for all of you.  For today and in conclusion, “Dysfunction Junction” is why our IG DCM was stalemated today.

IG Primary & Secondary Market Talking Points


  • BAML’s IG Master Index widened 1 bp to +123 vs. +122.  +106 represent the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.18 vs. +117.
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +165 vs. at +164.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $19.2b on Wednesday versus $20.5b on Tuesday and $21.6b the previous Wednesday.
  • The 10-DMA stands at $17.9b.


Global Market Recap


  • U.S. Treasuries – 4-day winning streak was snapped.
  • Overseas Bonds – JGB’s closed better bid. European bonds traded poorly.
  • Stocks – U.S. stocks little changed with 45 minutes left in the session.
  • Overseas Stocks – Asia closed with small gains. Europe had a good day.
  • Economic – New home sales & KC Fed manufacturing were strong.
  • Overseas Economic – U.K. retail sales were strong.
  • Currencies – The USD was mixed vs. the Big 5. The DXY Index had a small gain.
  • Commodities – Crude oil & gold closed in the red.
  • CDX IG: -0.97 to 67.37
  • CDX HY: -3.17 to 330.27
  • CDX EM: -1.52 to 216.16

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

-Tony Farren


Syndicate IG Corporate-only Volume Estimates for This Week and March


IG Corporate New Issuance This Week
vs. Current
WTD – $19.375b
March 2017
vs. Current
MTD – $107.848b
Low-End Avg. $24.92b 77.75% $113.79b 94.78%
Midpoint Avg. $25.65b 75.54% $114.31b 94.35%
High-End Avg. $26.38b 73.45% $114.83b 93.92%
The Low $20b 96.87% $80b 134.81%
The High $35b 55.36% $140b 77.03%

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.

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

WEEK 3/13
WEEK 3/06
WEEK 2/27
WEEK 2/20
WEEK 2/13
WEEK 2/06
New Issue Concessions 0.57 bps 0.11 bps 4.62 bps N/A 0.00 bps 1.17 bps <3.15> bps <0.16> bps <0.86> bps <3.44> bps
Oversubscription Rates 3.08x 3.68x 1.77x N/A 3.08x 2.73x 3.39x 3.26x 3.76x 3.92x
Tenors 15.35 yrs 10.83 yrs 8.82 yrs N/A 10.05 yrs 9.65 yrs 8.04 yrs 8.37 yrs 8.03 yrs 12.04 yrs
Tranche Sizes $578mm $788mm $650mm N/A $859mm $671mm $738mm $695mm $744mm $735mm
Avg. Spd. Compression
IPTs to Launch
<17.69> bps <19.23> yrs <7.5> bps N/A <17.99> bps <20.00> bps <16.79> bps <18.47> bps <18.45> bps <19.60> bps


New Issue Pipeline (more…)