Browsing articles tagged with " minority broker-dealer"
Muni Market New Issue Calendar Week 09-04-18
September 2018      Muni Market   

New Muni Debt Offerings Scheduled for the Holiday-Shortened Week of September 04-Last week muni volume was about $4.5 billion. This holiday-shortened week volume is expected to be $3.6billion. The negotiated market is led by $900.9million future tax bonds for New York City Transitional Finance Authority, New York. The competitive market is led by $989.3 million tax-exempt and taxable general obligation bonds for the State of California on Thursday.

As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and muni bond market participants with a summary of the prior week’s municipal bond market activity, including credit spreads and money flows, and a look at pending municipal finance offerings tentatively scheduled for the most current week.

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

muni-market-new-issue-calendar

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

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

Municipal Debt Market Sees Highest Volumes for Year; This Week’s Calendar
August 2018      Muni Market, Recent Deals   

Municipal Debt Market Sees Highest Volumes for Year; New Muni Debt Offerings Scheduled Week of August 13 2018-With last week’s muni debt secondary market volume setting a record for the year, new muni bond issues scheduled for issuance this week is expected to be $11.8bil, more than double the issuance of last week. As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and muni bond market participants with a summary of the prior week’s municipal bond market activity, including credit spreads and money flows, and a look at pending municipal finance offerings tentatively scheduled for the most current week.

The negotiated market is led by $2.3 billion Airport System Subordinate Revenue bonds for the City and County of Denver, Colorado. The competitive market does not have any financings greater than $100.0 million scheduled.

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

muni-market-new-issue-calendar-mischler

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

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

(more…)

EU & US Closer to Resolving Trade Tariff Tit-for-Tat; Debt Capital Markets Comment
July 2018      Debt Market Commentary, Recent Deals   

Quigley’s Corner 07.25.18 – EU & US Closer to Resolving Trade Tariff Tit-for-Tat

Investment Grade New Issue Re-Cap – Breaking News: Trump & Juncker Stymie Trade War Rhetoric

Today’s IG Primary & Secondary Market Talking Points – Mischler in the Selling Group for AT&T’s $25 par Global Notes Transaction

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

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

New Issues Priced

Indexes and New Issue Volume              

Global Market Recap

Lipper Report/Fund Flows-Week of July 18

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights – $463.96 Billion in Cumulative Enterprise Value

Economic Data Releases

Rates Trading Lab

UST Resistance/Support Table

Tomorrow’s Calendar

The “QC” Geopolitical Risk Monitor

Below is the opening extract from Quigley’s Corner aka “QC”  Wednesday,  July 25, 2018  edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans.

Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, the QC is one of three distinctive market comment pieces produced by Mischler Financial Group. The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our primary debt capital markets desk and includes a comprehensive “deep dive” with optics on the day’s investment grade corporate debt new issuance and secondary market data encompassing among other items, comparables, investment grade credit spreads, new issue activity, secondary market most active issues, and upcoming pipeline. 

To receive Quigley’s Corner, please email: rquigley@mischlerfinancial.com or via phone 203.276.6646 

 

Breaking News: Trump & Juncker Stymie Trade War Rhetoric

us-eu trade trade tariff dispute resolution

Amidst global trade tariff fears, U.S. President Trump met with European Commission President Jean-Claude Juncker in Washington to deliver what will hopefully lead to a resolution to the simmering ‘trade tarrif war’ between the US and the EU. Trump said today’s meeting at the White House “marks a new phase of close friendship and close trade relations, global security and jointly fighting against global terrorism.” President Trump further stated, “The U.S. and EU represent $838bn in trade and 50%+ of global trade. The U.S. and EU enjoy a $1 trillion bilateral trade relationship which is the largest in the world.” Trump and Juncker purportedly agreed to work toward “zero” trade tariff schemes, “zero” non-tariff barriers, and “zero” subsidies on non-auto goods. To reduce barriers in trade, soybeans foremost among them, it was reported the EU will start “almost immediately” to buy “vast amounts” of soybeans, helping US Midwest farmers and “resulting in greater prosperity for both the U.S. and EU, while making trade more fair and reciprocal.” The EU’s Juncker purportedly agreed to import “much more” liquefied natural gas and the U.S. agreed to make it easier for the EU to do so. Both leaders are said to have agreed to launch a dialogue to trade barriers, bureaucratic obstacles and to slash costs. There remain negotiations going forward, specifically on auto tariffs- but they both are said to have agreed to work toward a rapid resolution.

Today the IG dollar DCM hosted 6 issuers across 7 tranches totaling $5.15b.  The SSA space was quiet.

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

  • The IG Corporate WTD total is 59.73% of this week’s syndicate midpoint average forecast or $12.125b vs. $20.30b.
  • MTD we’ve priced 71.05% of the syndicate forecast for July IG Corporate new issuance or $57.936b vs. $81.54b.
  • There are now 15 issuers in the IG credit pipeline.                                 

Today’s IG Primary & Secondary Market Talking Points – Mischler in the Selling Group for AT&T’s $25 par Global Notes Transaction

 

  • Mischler Financial was honored to be a member of the Selling Group on today’s AT&T $25 par Global Notes transaction due 8/01/2067 (callable 8/01/2023). The deal from NYSE:ATT was upsized to $750mm from $250mm.
  • A notable rarity: Today’s Burlington Northern Santa Fe LLC 30-year Senior notes new issue was launched at T+112.5 which was 2.5bps tighter than the tightest side of +120 “area” (+/-5) Guidance.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 7 IG Corporate and Preferredonly new issues was <20.68> bps.
  • Not counting the Preferred and only counting the 6 IG Corporates, IPTs to the launch was <23.08>.
  • BAML’s IG Master Index tightened 1 bp to +120 vs. +121. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 2 bps to 1.13 vs. 1.15. (1.24 represents the high on 6/04; 0.85 is its post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +153. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $21.4b on Tuesday versus $15.4b on Wednesday and $18.3b the previous Tuesday.
  • The 10-DMA stands at $16.9b.

 

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

 

IG Corporate New Issuance This Week
7/23-7/27
vs. Current
WTD – $12.125b
July 2018 vs. Current
MTD – $57.936b
Low-End Avg. $18.60b 65.19% $81.04b 71.49%
Midpoint Avg. $20.30b 59.73% $81.54b 71.05%
High-End Avg. $22.00b 55.11% $82.04b 70.62%
The High $10b 121.25% $60b 96.56%
The Low $30b 40.42% $100b 57.94%

 

Below please find a synopsis of everything Syndicate & Secondary as seen from the perch of Mischler Financial Group’s Investment Grade Capital Markets Desk.

 

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

 

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

 

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.
7/23
TUES.
7/24
AVERAGES
WEEK 7/16
AVERAGES
WEEK 7/09
AVERAGES
WEEK 7/02
AVERAGES
WEEK 6/25
AVERAGES
WEEK 6/18
AVERAGES
WEEK 6/11
New Issue Concessions 2.64 bps 1.50 bps 3.90 bps 3.45 bps No Issuance 9.87 bps +7.50 bps +4.02 bps
Oversubscription Rates 3.32x 2.47x 2.33x 2.31x No Issuance 2.03x 2.59x 2.89x
Tenors 7.56 yrs 5.52 yrs 7.73 yrs 9.24 yrs No Issuance 8.99 yrs 11.08 yrs 11.10 yrs
Tranche Sizes $592mm $413mm $1,031mm $693mm No Issuance $504mm $1,134mm $724mm
Avg. Spd. Compression
IPTs to Launch
<15.39> bps <13.00> bps <13.79> bps <13.39> bps No Issuance <6.58> bps <13.11> bps <13.76> bps

 

New Issues Priced

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

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
AT&T Inc. Baa2/BBB 5.625% 8/01/2067 750 5.625%-5.75%
5.6875%a
5.625%  the # 5.625% $25 Pfd
Global Notes
BAML/MS/WFSJPM/RBC/UBS
Aviation Capital Group LLC A-/BBB+ FRN 7/30/2021 300 3mL+95-100
3mL+97.5a
+70a (+/-3) 3mL+67 3mL+67 BARC/BNPP/GS/JPM/MIZ
Aviation Capital Group LLC A-/BBB+ 4.125% 8/01/2025 500 +170a +150a (+/-5) +145 +145 BARC/BNPP/GS/JPM/MIZ
Burlington Northern
Santa Fe
A3/A+ 4.15% 12/15/2048 750 +135a +120a (+/-5) +112.5 +112.5 JPM/MS/WFS (a)
BAML/CITI/GS (p)
Nationwide Building Society Baa1/A 4.363% 6NC5 F-t-F
8/01/2024
1,000 +170a +160a (+/-5) +155 +155
Back-end:
3mL+139.2
BAML/BARC/CITI/JPM/
POSCO Baa1/BBB+ 4.00% 8/01/2023 500 +155a +130-135/+132.5a +130 +130 BAML/BNPP/HSBC/STAN
Temasek Financial (I) Ltd. Aaa/AAA 3.625% 8/01/2028 1,350 REV IPTs: +80a
+90-95/+92.5a
+75a (+/-3) +72 +72 BAML/CITI/HSBC/MS

               

Indexes and New Issue Volume              

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

*Denotes new high or low.

                                                                                             

Index Open Current Change
IG30 60.928 59.219 <1.709>
VIX 12.41 12.29 <0.12>
CT10 2.949% 2.975% 0.026
S&P 2,820 2,846 26  
DOW 25,241 25,414 173
Nasdaq 7,841 7,932 91
OIL 68.52 69.26 0.74  
GOLD 1,224.52 1,231.63 7.11  
 

USD

 

IG Corporates

 

USD

 

Total (IG + SSA)

DAY: $5.15 bn DAY: $5.15 bn
WTD: $12.125 bn WTD: $14.125 bn
MTD: $57.936 bn MTD: $73.436 bn
YTD: $759.129 bn YTD: $939.744 bn

 

Global Market Recap

 

  • USTs: Sold off late on news of U.S.-EU trade agreement.
  • Overseas 10-year: Bought globally ex Switz., NZ and Sweden.
  • SOFR: +0.03 to 1.90 vs. 1.87.
  • 3mth Libor: -0.001 to 2.334 vs. 2.335.
  • Overseas Stocks: U.S., Nikkei and HS rally; Core EU and U.K. sold off.
  • Currencies: DXY Index -0.416 to 94.197 vs. 94.613.
  • CDX HY: -5.847 to 329.940 vs. 335.787.
  • CDX EM: -8.068 to 165.647 vs. 173.715.

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

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

     

  • For the week ended July 11th, Lipper U.S. Fund Flows reported a net inflow of $2.021b into Corporate Investment Grade Funds (2018 YTD net inflow of $52.143b) and a net inflow of $260.016 into High Yield Funds (2018 YTD net outflow of $18.217b).
  • Over the same period, Lipper reported a net inflow of $358.528m into Loan Participation Funds (2018 YTD net inflow of $8.847b).
  • Emerging Market debt funds reported a net inflow of $320.443m (2018 YTD inflow of $1,142b).

 

IG Credit Spreads by Rating

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

Spreads across the four IG asset classes are 22.75 bps wider versus their new post-Crisis lows.

 

ASSET CLASS 7/24 7/23 7/20 7/19 7/18 7/17 7/16 7/13 7/12 7/11 1-Day Change 10-Day Trend PC
low
IG Avg. 120 121 122 123 123 123 123 124 125 125 <1> <5> 90 (2/01/18)
“AAA” 59 61 62 62 62 62 62 63 63 64 <2> <5> 48 (2/02/18)
“AA” 71 72 73 73 73 74 74 74 75 75 <1> <4> 51 (2/02/18)
“A” 96 98 98 99 99 99 99 100 100 101 <2> <5> 71 (2/01/18)
“BBB” 150 152 153 154 154 154 154 156 156 157 <2> <7> 115 (2/02/18)
IG vs. HY 227 229 233 236 233 235 236 238 236 241 <2> <14> 222 (5/15/18)

 

IG Credit Spreads by Industry

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

Spreads across the major industry sectors are an average 29.84 bps wider versus their post-Crisis lows.

INDUSTRY 7/24 7/23 7/20 7/19 7/18 7/17 7/16 7/13 7/12 7/11 1-Day Change 10-Day Trend PC
low
Automotive 108 109 109 110 110 111 111 112 112 114 <1> <6> 67
Banking 108 109 110 111 111 111 111 112 112 113 <1> <5> 75 (2/02/18)
Basic Industry 149 150 152 153 152 153 153 155 155 156 <1> <7> 110 (2/02/2018)
Cap Goods 97 99 100 100 101 101 101 101 101 102 <2> <5> 75 (1/12/18)
Cons. Prod. 107 110 110 111 111 111 111 112 113 114 <3> <7> 78 (2/01/18)
Energy 150 151 153 155 154 155 155 156 157 158 <1> <8> 115 (2/02/18)
Financials 126 127 128 129 129 130 130 131 132 132 <1> <6> 97
Healthcare 104 105 106 106 106 106 107 107 108 109 <1> <5> 77 (2/02/2018)
Industrials 122 124 125 126 125 126 126 127 127 128 <2> <6> 93 (2/02/18)
Insurance 133 134 135 136 136 136 136 137 137 138 <1> <5> 100 (2/02/18)
Leisure 115 116 116 117 117 117 118 118 119 119 <1> <4> 98 (2/01/18)
Media 155 158 159 159 159 159 159 161 162 163 <3> <8> 113
Real Estate 127 129 129 130 130 130 131 131 132 132 <2> <5> 100 (2/01/18)
Retail 108 110 111 111 111 112 111 112 112 114 <2> <6> 82 (2/02/18)
Services 113 114 114 115 115 116 115 116 116 117 <1> <4> 94  (1/31/18)
Technology 89 91 91 92 91 92 92 93 94 94 <2> <5> 71 (2/02/18)
Telecom 160 163 165 165 165 165 164 165 166 167 <3> <7> 122
Transportation 125 127 128 129 129 129 129 130 131 131 <2> <6> 91 (2/02/2018)
Utility 125 126 127 128 128 128 128 130 130 131 <1> <6> 96 (2/02/2018)

                             

New Issue Pipeline

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Corporate Bond Issuers Return to IG Dollar Market; Toyota Drives DCM
July 2018      Debt Market Commentary   

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

 

Investment Grade Corporate Bond New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

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

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

New IG Corporate Bond Issues Priced

Indexes and New Issue Volume              

Global Market Recap

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

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

Below is the opening extract from Quigley’s Corner aka “QC”  Tuesday,  July 10, 2018  edition distributed via email to institutional investment managers and Fortune Treasury clients of Mischler Financial Group, the investment industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans.

Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, the QC is one of three distinctive market comment pieces produced by Mischler Financial Group. The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our primary debt capital markets desk and includes a comprehensive “deep dive” with optics on the day’s investment grade corporate debt new issuance and secondary market data encompassing among other items, comparables, investment grade credit spreads, new issue activity, secondary market most active issues, and upcoming pipeline. 

To receive Quigley’s Corner, please email: rquigley@mischlerfinancial.com or via phone 203.276.6646 

Investment Grade New Issue Re-Cap

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

 

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

 

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

                                  

Today’s IG Primary & Secondary Market Talking Points

 

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

 

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

 

IG Corporate New Issuance This Week
7/09-7/13
vs. Current
WTD – $5.075b
July 2018 vs. Current
MTD – $5.075b
Low-End Avg. $16.84b 30.14% $81.04b 6.26%
Midpoint Avg. $18.08b 28.07% $81.54b 6.22%
High-End Avg. $19.32b 26.27% $82.04b 6.16%
The High $10b 50.75% $60b 8.46%
The Low $30b 16.92% $100b 5.075%

 

 

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.
7/09
AVERAGES
WEEK 7/02
AVERAGES
WEEK 6/25
AVERAGES
WEEK 6/18
AVERAGES
WEEK 6/11
AVERAGES
WEEK 6/04
AVERAGES
WEEK 5/28
New Issue Concessions N/A No Issuance 9.87 bps +7.50 bps +4.02 bps +6.31 bps +9.00 bps
Oversubscription Rates N/A No Issuance 2.03x 2.59x 2.89x 2.70x 2.73x
Tenors N/A No Issuance 12.58 yrs 11.08 yrs 11.10 yrs 9.25 yrs 9.69 yrs
Tranche Sizes N/A No Issuance $504mm $1,134mm $724mm $623mm $467mm
Avg. Spd. Compression
IPTs to Launch
N/A No Issuance <6.58> bps <13.11> bps <13.76> bps <13.80> bps <8.23> bps

 

New Issues Priced

(more…)

Holiday Time is Over for Muni Bond Issuance-NYS Dormitory is Open
July 2018      Muni Market   

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

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

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

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

mischler-muni-market-update-070918During first half of 2018, and full years 2017 and 2016 alone, minority broker-dealer Mischler Financial Group Inc. underwriting roles (for which MFG has led, co-managed and/or served as selling group member) have included more than $625 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

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

(more…)

Despite Trade War Saber-Rattling-Bayer’s 15b Bond Issuance is Headache Free
June 2018      Debt Market Commentary   

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

 

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

Today’s IG Primary & Secondary Market Talking Points

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

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

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

New Issues Priced

Indexes and New Issue Volume              

Global Market Recap

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

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

Economic Data Releases

Tomorrow’s Calendar

 

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

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

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

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

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

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

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

 

Today’s IG Primary & Secondary Market Talking Points

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

 

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

 

IG Corporate New Issuance This Week
6/18-6/22
vs. Current
WTD – $16.00b
June 2018 vs. Current
MTD – $78.58b
Low-End Avg. $37.36b 42.83% $91.24b 86.12%
Midpoint Avg. $38.16b 41.93% $90.44b 86.89%
High-End Avg. $38.96b 41.07% $89.64b 87.66%
The High $30b 53.33% $75b 104.77%
The Low $46b 34.78% $110b 71.44%

 

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

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

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

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

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

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

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

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

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

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

Below find a synopsis of everything syndicate and secondary from the day’s IG debt capital markets as seen from the perch of Mischler’s Fixed Income Syndicate Desk. Have a great evening!

Ron Quigley, Managing Director, Head of Fixed Income Syndicate

 

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

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Muni Bond Inflows Continue To Creep Up; Mischler New Issue Outlook
June 2018      Muni Market   

Municipal Debt Deals-New Issue Calendar Week of June 18:  Muni Bond Inflows Continue To Creep Up…Mischler Muni Market Update looks back to last week’s new issuance, muni bond fund flow metrics and a focused lens on the muni bond offerings for this week.  As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and muni bond market participants with a summary of the prior week’s municipal bond market activity, including credit spreads and money flows, and a look at pending municipal finance offerings tentatively scheduled for the most current week.

Last week muni volume was about $6.8 billion. This week volume is expected to be about $7.0 billion. The negotiated market is led by $1.7 billion asset-backed tobacco bonds for Golden State Tobacco Securitization Corporation,California. The competitive market is led by $1.2 billion for the State of Georgia (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

Muni Market New Offerings week June 18

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

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

 

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Debt Markets Remember D-Day: Normandy 1944; Mischler Financial Comment
June 2018      Debt Market Commentary   

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

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

Today’s IG Primary & Secondary Market Talking Points

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

Remembering D-Day

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

The “QC” Geopolitical Risk Monitor

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

New Issues Priced

Indexes and New Issue Volume 

Global Market Recap

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

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar     

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

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

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

Today’s IG Primary & Secondary Market Talking Points

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

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

 

IG Corporate New Issuance This Week
6/04-6/08
vs. Current
WTD – $33.45mm
June 2018 vs. Current
MTD – $34.055b
Low-End Avg. $24.44b 136.87% $91.24b 37.32%
Midpoint Avg. $25.24b 132.53% $90.44b 37.65%
High-End Avg. $26.04b 128.46% $89.64b 37.99%
The High $20b 167.25% $75b 45.41%
The Low $35b 95.57% $110b 30.96%

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

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

remember-D-Day-Normandy-Mischler-Financial

Never forget!

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

 

 

 

*Normandy – American Cemetery

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

 

Here’s a review of this week’s five key primary market driver averages for IG Corporates only through Tuesday’s session followed by the averages over the prior six weeks:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
6/04
TUES.
6/05
AVERAGES
WEEK 5/28
AVERAGES
WEEK 5/21
AVERAGES
WEEK 5/14
AVERAGES
WEEK 5/07
AVERAGES
WEEK 4/30
AVERAGES
WEEK 4/23
New Issue Concessions 6.33 bps 6.61 bps 9.00 bps 9.67 bps 4.59 bps 4.10 bps 5.92 bps 3.63 bps
Oversubscription Rates 2.77x 2.77x 2.73x 2.93x 2.96x 2.70x 2.16x 2.53x
Tenors 7.92 bps 10.40 bps 9.69 yrs 7.70 yrs 10.18 yrs 7.04 yrs 13.17 yrs 9.19 yrs
Tranche Sizes $622mm $741mm $467mm $952mm $842mm $805mm $630mm $786mm
Avg. Spd. Compression
IPTs to Launch
<13.38> bps <13.51> bps <8.23> bps <18.71> yrs <15.12> bps <12.91> bps <12.54> bps <13.85> 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
Alliant Energy Finance Baa1/A- 3.75% 6/15/2023 400 +115a +100a (+/-5) +95 +95 BAML/JPM/MIZ
Alliant Energy Finance Baa1/A- 4.25% 6/15/2028 300 +145a +135a (+/-5) +130 +130 BAML/JPM/MIZ
Compass Bank Baa2/BBB+ FRN 6/11/2021 450 3mL+equiv 3mL+73 the # 3mL+73 3mL+73 BBVA/CITI/GS/MS
Compass Bank Baa2/BBB+ 3.50% 6/11/2021 700 +110a +95 the # +95 +95 BBVA/CITI/GS/MS
Credit Suisse Group AG BBB+/A- FRN 6NC5
6/12/2024
750 3mL+equiv N/A 3mL+124 3mL+124 CS-sole
Credit Suisse Group AG BBB+/A- 4.207% 6NC5
6/12/2024
1,250 +150a N/A +140 +140
Reset:
3mL+124
CS-sole
Edwards Life Sciences Baa2/BBB- 4.30% 6/15/2028 600 +150-155/+152.5a +140a (+/-5) +135 +135 BAML/JPM (a) + 4 (p)
Jackson Na’l. Life Glbl. Fdg. A1/AA- FRN 6/11/2021 500 3mL+equiv 3mL+48-50 3mL+48 3mL+48 BAML/DB/GS/JPM
Jackson Na’l. Life Glbl. Fdg. A1/AA- 3.30% 6/11/2021 300 +80-85/+82.5a +70-72 +70 +70 BAML/DB/GS/JPM
Jackson Na’l. Life Glbl. Fdg. A1/AA- 3.875% 6/11/2025 400 +110a +98-100 +98 +98 BAML/DB/GS/JPM
KeyBank NA/Cleveland, OH A3/A- 3.35% 6/15/2021 500 +85a +72a (+/-2) +70 +70 GS/JPM/KEY/MS
NiSource Inc. Baa2/BBB+ 3.65% 6/15/2023 350 +105-110/+107.5a +90a (+/-2.5) +87.5 +87.5 CS/JPM/MS/MUFG
NiSource Inc. BBB-/BB+ 5.65% PerpNC5 400 5.875%a 5.70%a (+/-5) 5.65% $1000 par CS/JPM/MS/MUFG
Western Union Co. Baa2/BBB+ 4.25% 6/09/2023 300 +145a N/A +145 +145 BAML/BARC

 

SSA

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
KfW Aaa/AAA 2.75% 7/15/2020 4,000 MS<2>a MS<2>a MS<3> +23.8 BARC/HSBC/RBC

 

Indexes and New Issue Volume              

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

*Denotes new high or tight.

 

Index Open Current Change  
IG30 64.169 63.742 <0.427>
VIX 12.40 11.64 <0.76>
CT10 2.929% 2.973% 0.044
S&P 2,749 2,772 23  
DOW 24,800 25,146 346
Nasdaq 7,638 *7,689 51
OIL 65.52 65.01 <0.51>  
GOLD 1,296 1,296 0  
 

USD

 

IG Corporates

 

USD

 

Total (IG + SSA)

DAY: $7.20 bn DAY: $11.20 bn
WTD: $33.45 bn WTD: $37.95 bn
MTD: $34.055 bn MTD: $38.555 bn
YTD: $618.251 bn YTD: $772.816 bn

 

Global Market Recap

 

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

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

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

  • For the week ended May 30th, Lipper U.S. Fund Flows reported a net inflow of $848.978m into Corporate Investment Grade Funds (2018 YTD net inflow of $43.822b) and a net outflow of $17.869m from High Yield Funds (2018 YTD net outflow of $15.138b).
  • Over the same period, Lipper reported a net inflow of $274.880m from Loan Participation Funds (2018 YTD net inflow of $7.156b).
  • Emerging Market debt funds reported a net inflow of $27.322m (2018 YTD inflow of $1.990b). 

IG Credit Spreads by Rating

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

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

*Denotes new post-Crisis low

 

ASSET CLASS 6/05 6/04 6/01 5/31 5/30 5/29 5/28 5/25 5/24 5/23 1-Day Change 10-Day Trend PC
low
IG Avg. 121 120 121 122 120 120 116 116 115 115 +1 +6 90 (2/01/18)
“AAA” 62 62 62 63 63 63 60 60 60 60 0 +2 48 (2/02/18)
“AA” 72 71 71 72 70 69 67 67 67 67 +1 +5 51 (2/02/18)
“A” 97 96 97 98 97 96 92 92 92 92 +1 +5 71 (2/01/18)
“BBB” 152 152 153 154 152 151 147 147 146 146 0 +6 115 (2/02/18)
IG vs. HY 229 229 234 241 244 255 237 237 234 233 0 <5> 222 (5/15/18)

 

IG Credit Spreads by Industry

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

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

INDUSTRY 6/05 6/04 6/01 5/31 5/30 5/29 5/28 5/25 5/24 5/23 1-Day Change 10-Day Trend PC
low
Automotive 106 105 106 107 106 104 102 102 102 102 +1 +4 67
Banking 109 109 110 111 110 109 103 103 102 102 0 +7 75 (2/02/18)
Basic Industry 154 153 154 155 153 154 148 148 147 147 +1 +7 110 (2/02/2018)
Cap Goods 99 98 99 99 99 98 96 96 95 95 +1 +4 75 (1/12/18)
Cons. Prod. 109 108 110 110 108 107 105 105 105 105 +1 +4 78 (2/01/18)
Energy 154 152 153 154 150 150 146 146 145 145 +2 +9 115 (2/02/18)
Financials 124 124 124 125 122 121 119 119 119 118 0 +6 97
Healthcare 105 105 105 106 104 103 102 102 101 101 0 +4 77 (2/02/2018)
Industrials 124 123 124 125 123 122 119 119 119 119 +1 +5 93 (2/02/18)
Insurance 130 130 130 132 130 130 127 127 126 125 0 +5 100 (2/02/18)
Leisure 129 127 128 127 126 125 125 125 125 123 +2 +6 98 (2/01/18)
Media 156 156 157 157 155 154 150 150 150 148 0 +8 113
Real Estate 129 129 129 130 129 129 128 128 127 127 0 +2 100 (2/01/18)
Retail 111 111 112 112 112 111 109 109 108 108 0 +3 82 (2/02/18)
Services 111 111 112 112 110 109 108 108 107 107 0 +4 94  (1/31/18)
Technology 90 89 91 91 90 90 86 86 86 86 +1 +4 71 (2/02/18)
Telecom 159 159 160 162 161 160 155 155 154 153 0 +6 122
Transportation 128 124 127 127 125 124 122 122 121 121 +4 +7 91 (2/02/2018)
Utility 124 127 124 125 123 123 119 119 119 119 <3> +5 96 (2/02/2018)

                                   

New Issue Pipeline

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Muni Bond New Issue Volume Bumps Up to 2018 Record-Mischler Update
June 2018      Muni Market   

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

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

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

muni-market-new-issue-calendar-mischler

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

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

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Wall Street Rating Interest Rates: Trading at the Corner of Hollywood and Wall
May 2018      Debt Market Commentary   

Quigley’s Corner 05.16.18 – Financial Markets Rating Impact of Higher Interest Rates: Trading at the Corner of Wall Street & Hollywood Blvd.

Investment Grade New Issue Re-Cap – Wall Street & Hollywood; Reality & Illusion

Today’s IG Primary & Secondary Market Talking Points

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

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

2018 Lipper Report/Fund Flows – Week ending May 9th       

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 the suddenly subdued IG dollar DCM hosted one $800mm two-part deal from Harley-Davidson Financial Services in the form of a 2-year FRN and a 3-year fixed rate senior unsecured transaction. In fact, the SSA space outperformed on the volume front thanks to Kommuninvest’s $1b 3-year bringing the all-in IG day total to 2 issuers, 3 tranches and a mere $1.8b…………What gives?  Well, look at the CT10-year that closed out yesterday’s session yielding 3.07% and 3.10% today. U.S. interest rates are going up, though they’ve been tame thus far as they begin their trajectory.

In speaking with Mischler’s resident Treasury guru Tony Farren about the subject of rising rates today, the very first week of 2018 (Jan. 2-5) saw the 2yr (1.891%), 5yr (2.213%), 10yr (2.416%) and the 30yr (2.749%) all trading at their 2018 YTD low yields. Fast forward to today – both the 2yr (2.589%) and 5yr (2.941%) are at the highest yields since 2008; the 10yr (3.10%) is at its highest yield dating back to 2011 while the CT30yr (3.22%) came to within 1 bp of its YTD high which was the highest yield since 2015. The market IS and always has been ahead of the curve, while the Fed has ALWAYS and will forever be a market laggard. It’s the nature of the beast we call “the market.”  Rates are finding a new level and that level is HIGHER folks!

Things could certainly be changing especially after S.F. Fed Chief Williams’ comments yesterday in which he said he’s “very positive” on the domestic economic outlook and shared his view that we can sustain 3 to 4 rate hikes in 2018!  The statement has more impact than it typically would, especially considering that Mr Williams will soon upgrade to a much more powerful role as the NY Fed Chief. There is a large contingent of people and market participants who would like to see Fed-speak banned (other than post-FOMC Press Conferences and Q&A). Still, rates are going up folks. Just have a look at the emboldened U.S. dollar for evidence. Look at Emerging Markets, especially Argentina and Turkey. They are signals not only of their own domestic issue,s but also the rising rate environment.  Sprinkle on some powerful geopolitical risk factors like the bubbling Middle East, Iran vs. the unlikely Dynamic Duo that is quickly becoming Saudi Arabia and Israel, and Kim Jong-un’s recent comments threatening to un-schedule the June 12th denuclearization talks.  China, Italy, Washington dysfunction – they are all among the starring players in an endlessly rewritten historical epic scenario that beckons a script doctor’s skills to fill in the holes, add some character arcs and tie all the plots and subplots together to achieve a nice, neat denouement.  Guess what? That happy ending is not coming; after all, this is the reality, not illusion and we, readers are realists.  This is Wall Street, not Hollywood. At least I think and hope so.

So, the 3.095% CT10yr yield was the wake-up call that gave pause for today.  We are also running $7b shy of this week’s syndicate estimate, but tomorrow’s another day!

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

  • The IG Corporate WTD total is 79.32% of this week’s syndicate midpoint average forecast or $26.905b vs. $33.92b.
  • MTD we’ve priced 64.28% of the syndicate forecast for April IG Corporate new issuance or $86.675b vs. $134.84b.
  • There are now 15 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 2 IG Corporate-only new issues was <15.00> 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 tightened 1 bp to +145 vs. +146. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $19.9b on Tuesday versus $16b on Monday and $17.4b the previous Tuesday.
  • The 10-DMA stands at $17.4b.

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

 

IG Corporate New Issuance This Week
5/14-5/18
vs. Current
WTD – $26.905b
May 2018 vs. Current
MTD – $86.675b
Low-End Avg. $32.52b 82.73% $133.64b 64.86%
Midpoint Avg. $33.92b 79.32% $134.84b 64.28%
High-End Avg. $35.32b 76.17% $136.04b 63.71%
The High $20b 134.53% $110b 78.80%
The Low $40b 67.26% $150b 57.78%

 Global Market Recap

  • U.S. Treasuries – Small losses. 2yr reached its highest yield since 2008.
  • Overseas Bonds – JGB’s mixed. Bunds/Gilts better. Italy/Greece hit very hard.
  • SOFR – 1.79% from 1.70%.
  • 3mth Libor – 2.32563% from 2.32063%.
  • Stocks – Solid gains at 3pm with the NASDAQ leading the way.
  • Overseas Stocks – Asia closed down. Europe more green than red. Italy hit hard.
  • Economic – Mixed U.S. data with more good than bad.
  • Overseas Economic – Japan GDP was negative. EU, Germany and Italy CPI’s were tame.
  • Currencies – DXY Index traded at its YTD high and the Euro its YTD low.
  • Commodities – Small gains. Gold hit its YTD low. Gasoline reached its high since 2014.
  • CDX IG: -0.59 to 60.68
  • CDX HY: -2.45 to 338.22
  • CDX EM: -2.13 to 158.88
  • VIX: -1.19 to 13.44

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

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