Browsing articles tagged with "mischler financial group Archives - Mischler Financial Group"
Muni Bond Offerings Set To Take Off Week of May 14-San Fran Airport Commission
May 2018      Muni Market   

Municipal Bond New Issue Calendar Week of May 14:  Nearly $10bil in New Issues Scheduled…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 muni volume was about $6.6 billion. This week volume is expected to be about $9.9 billion. The negotiated market is led by $914.0 million tax-exempt, AMT and taxable bonds for the Airport Commission of the City and County of San Francisco, California. The competitive market is led by $1.2 billion general obligation bonds for the Commonwealth of Pennsylvania (Wednesday).

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

mischler-muni-market-comment 05142018

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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IG Debt Market Recap: Iran Deal Scuttled; Dynamite Day for General Dynamics
May 2018      Debt Market Commentary   

Quigley’s Corner 05.08.18: Iran Deal Scuttled; IG Debt Market Recap: Dynamite Deal Day for General Dynamics  

Investment Grade New Issue Re-Cap – Big Time Volume But Stuck at
“The Number Again. NYSE:GD, NYSE:VZ

Today’s IG Primary & Secondary Market Talking Points

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

Vaya Con Dios to Bloomberg Bob, a Great Man and a Dear Friend

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 May 2nd      

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

 

Investment Grade New Issue Re-Cap – Big Time Volume But Stuck at“The Number Again. NYSE:GD, NYSE:VZ
Today the IG dollar DCM hosted 7 issuers across 18 tranches totalling $15.539b. 48.3% of that total came in the form of the General Dynamics (NYSE:GD) 7-part transaction –which totalled $7.5b, and runner-up award to Verizon Communications (NYSE:VZ), which brought $1.788b to the corporate treasury. The SSA space was inactive again. Although the deals are clearing for issuers 10 of today’s 17 IG Corporate tranches were guided “at the number!”  Something to keep an eye on. 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 74.35% of this week’s syndicate midpoint average forecast or $23.389b vs. $31.46b.
  • MTD we’ve priced 27.64% of the syndicate forecast for April IG Corporate new issuance or $37.264b vs. $134.84b.
  • There are now 9 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 17 IG Corporate-only new issues was <11.09> bps.
  • BAML’s IG Master Index was unchanged at +117. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +1.12.  (0.85 is its post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +149. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $14.1b on Monday versus $13.9b on Friday and $20.9b the previous Monday.
  • The 10-DMA stands at $18.1b. 

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

 

IG Corporate New Issuance This Week
5/07-5/11
vs. Current
WTD – $23.389b
May 2018 vs. Current
MTD – $37.264b
Low-End Avg. $30.83b 75.86% $133.64b 27.88%
Midpoint Avg. $31.46b 74.35% $134.84b 27.64%
High-End Avg. $32.08b 72.91% $136.04b 27.39%
The High $20b 116.945% $110b 33.88%
The Low $40b 58.47% $150b 24.84%

 bloomberg

Vaya Con Dios to Bloomberg Bob, a Great Man and a Dear Friend

You have all read in the QC about how I frequently turn the lights off and lock the door behind me here at our nation’s oldest Service Disabled Veteran owned & operated broker-dealer. We always leave it on the floor, driven by a desire to be the best we can be and to always be allegiant to our value-added reputation as providing best in class debt capital market coverage and distribution.  It’s all about delivering high-quality work for our issuers and joint leads while building a sustainable and lasting company. We take great pride in that for we know that one day all we ever really take with us is our reputation.  It’s also what people will most remember us by.  Well, this evening, I got your attention with Bloomberg’s logo above but it’s about the manifestation of a mandate at a world-class company that has a culture unique to itself.  If one were to do a case study of corporate cultures, the names, IBM, GE, Apple, Disney and Bloomberg come to mind.  Each company has its family of employees while others are legendary for their work environments and commitment to make “lifers” out of their personnel. Tonight’s story is about Bloomberg’s commitment to veterans and a tribute/send-off to one veteran, in particular, Bob Elson who many of my 3,501 readers have also come to know.

This is not a deal drill-down day, during which I typically help promote an issuer’s diversity mandate and often more specifically, our veteran and service-disabled veteran certification. So, instead of going granular re General Dynamics’ massive debt issuance, tonight I’ve decided to do something different. Tonight I want to pay tribute to a business news industry legend.

I remember working at Merrill when I sat next to Mac Barnes on our trading floor. Mac was a legendary original Bloomberg programmer and techno-wizard who started with Michael Bloomberg way back when. He was also a super good guy.  Michael had been offered a nascent technology position by Merrill well before tech was remotely considered en vogue. In fact, it was anything but. It meant “the writing was on the wall.”  What emerged from that experiment is the Bloomberg we know today.  When the going gets tough, the tough get going, as they say.  Michael Bloomberg never looked back. His net worth is, as of today $51.2b………... Quite an achievement!

Mike Bloomberg may be a multi-billionaire, but he also knows that mandates at any company start from the top down.  Which brings me to veterans at Bloomberg.

In Mike’s own words, “Veterans have just the kind of leadership, discipline, and work ethic you need to launch a successful business and create jobs and we’re determined to help more veterans succeed.” The businessman, engineer, author, politician and philanthropist knows that both the military and Bloomberg embody a common spirit: the mission comes first. Teamwork. Communication. Adaptability. Integrity. Those are just some of the skills and characteristics that transfer well from military service to a career at Bloomberg.  Mike upped his game by recruiting veterans in software development, sales, data analysis, customer service and network support as well as in the newsroom to showcase the places at his company where veterans should look to work. He knew early on those employees who have served or currently serve in the military, military families and supporters who promote and maintain Bloomberg as a military-friendly work environment stay connected through the Bloomberg Military & Veterans Community. We here at Mischler embrace and endorse that kind of thinking.

bob-elson-bloomberg lp

Bob Elson, US Army Spec 5; Bloomberg LP

However, I’d like to go one further by highlighting one of those veterans whose last day is coming at Bloomberg next Tuesday, May 15th – Robert “Bob” Elson formerly the Bob from the now defunct but legendary Ed and Bob Show that was Bloomberg’s First Word new issue team.  I’ve known Bob since he joined Bloomberg and enjoyed our daily rapport.  He is the consummate professional, all about journalistic integrity, checking data sources multiple times before going out with anything on the tapes and a legend on Wall Street. Along with having logged 47 years working in our financial services industry comes a Yoda-like wisdom about and sense of our global financial markets. For all those millennials out there who have logged their first 10 years and are only now starting to see what an interest rate hike looks like, it’s critical to latch onto the knowledge that market professionals such as Bob Elson possess.  It’s invaluable. Bob certainly deserves his reputation as “Bond Salesman to the Stars Since 1971.”

When my Dad passed away last December, while the family gathered at his wake, Bob was the first person to sign in to pay his respects to our family.  That is the kind of person he is and friend he has become.

As I mentioned Bob’s last day will be next Tuesday, May 15th.  I wanted to scribe something in Bob’s honour BEFORE his last day. This way, you can reach out to Bob prior to his departure. Bob has left an indelible mark in the Bloomberg newsroom. I will personally miss his professional expertise, his unmatched experience although I look forward to more frequent lunches as they’ll be easier to come by given our proximity here in Stamford, Connecticut to his home in Westport. The Bloomberg chat room that both Ed and Bob years ago named “Quigmeister” will be a less active one. When in the throes of covering over 120 accounts, running order books and writing relative value and D&I stories I could always rely on Bob’s comic relief that would get me through the realization that I’d once again be sending my “QC” with an obscenely late time stamp. People come and go in this business and the ones you keep around long after are more than just good minds, great journalists, and experienced market professionals. They become friends.

For those who may not have known, Bob also proudly served his nation in Vietnam joining the U.S. Army in 1968. Following basic training at the Fort Eustis installation near Newport News, Virginia, Bob served in the First Infantry Division (The Big Red One) seeing action in Lai Khe, Vietnam. For those who may not know, Lai Khe was probably the most rocketed base camp in Vietnam except for Khe Sanh during the siege. Bob humbly recalls the sign that hung prominently at the camp’s entry that read, “Welcome to Rocket City.” Bob may well have cultivated his keen sense of humour and comic relief from the legendary Bob Hope who visited the base for his Christmas show. Hope greeted the crowd saying “Here we are in Lai Khe. I’ve been here five minutes and I don’t Like Kaye!  Bob was then off to 1st Field Force Headquarters in Nha Trang returning home in 1970 as a Spec 5 having earned a Bronze Star with Oak Leaf Cluster for service.

It is comforting to know that there’s a place like Bloomberg that gave our veteran a home in his later years. I must say, however, I wish it was longer stay though.

To my good friend, journalist and veteran, it is NEVER fun to see someone ride off into the sunset but as they say, old soldiers never die they simply…………and I choose not to finish that quote, folks!

Thank you for your friendship, professionalism, foresight, advice and market wisdom all these years. Having served on no deals today you Bob Elson are the reason why I’m, turning off the lights and locking the front door here at Mischler Financial this evening.  I’d like you and all 3,501 “QC” readers to know that this edition has been my privilege and honour to write.

Vaya Con Dios my friend! Please reach out to Bob Elson on your Bloomberg terminals to give our military veteran and financial services veteran the send-off he truly deserves.

Thank you all and as always, have a great evening!

Below please find a complete synopsis of the day’s debt capital market activity as seen from the perch of the nation’s oldest investment bank / institutional brokerage owned & operated by Service-Disabled Veterans.

Ron Quigley, Managing Director, Head of Fixed Income Syndicate

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Municipal Bond New Issue Calendar Week of May 7 : Energy Northwest
May 2018      Muni Market   

Municipal Bond New Issue Calendar Week of May 7:  Tax Exempt and Taxable Bonds from Energy Northwest…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 municipal debt new issue calendar 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 $4.7billion. This week volume is expected to be about $6.3 billion. The negotiated market is led by $634.0 million tax-exempt and taxable bonds for Energy Northwest, Washington. The competitive market is led by $382.0 million tax-exempt and taxable general obligation bonds for the City and County of San Francisco, California in 3 bids (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-update-municipal-debt-offering-calendar week may 7 2018

Mischler 2018 Memorial Day Month Pledge Dedicated To…

Those not familiar with the financial industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans should know that our capital market desk(s) works with more than 135 Fortune corporation treasury teams, each of Wall Street’s lead underwriter investment banks, dozens of municipal debt issuers and a discrete spectrum of the industry’s most demanding investment managers and public plan sponsors. Of equal importance, our ethos is driven by giving back and paying forward to those members of the US military service-disabled veteran community and their families who simply do not have the depth of resources and access to advanced education programs and private sector job opportunities that so many of us take for granted.

Throughout the year, Mischler Financial Group advocates on behalf of the SDV community through sponsorship of mentoring programs and direct financial assistance to veteran-centric philanthropic organizations. During the months of May and November, we dedicate a percentage of the firm’s profits to honor Memorial Day and Veterans Day respectively. In our recognition of Memorial Day 2018, we have made our annual Memorial Day Month pledge to the Semper Fi Fund, one of the highest rated non-profit organizations. A full release of this announcement was made May 1 and we thank our clients and partners in advance for working with our primary DCM and ECM teams and our secondary market trading desks to make this Memorial Day month memorable for the veterans and their family members who have sacrificed so much to make our lives safer.

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. (more…)

Investment Grade Debt: Widening Warning
April 2018      Debt Market Commentary   

Quigley’s Corner 04.30.18- Widening Warning Investment Grade Debt

Investment Grade New Issue Re-Cap – “Warning! Warning! Danger Will Robinson! Haggard IG Primary Markets!”

Today’s IG Primary & Secondary Market Talking Points : Daimler Finance Guidance: “at the number”

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

Global Market Recap

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

QC Geopolitical Risk Monitor

New Issues Priced

Indexes and New Issue Volume              

Lipper Report/Fund Flows – Week ending April 25th     

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

Well, despite the primary market respite given last Thursday’s light calendar (2 issues across 5 tranches) followed by a no-print Friday, the IG dollar DCM’s primary marketplace continued to struggle along.  Although today’s IG dollar DCM hosted 6 issuers across 13 tranches totalling $8.175b – with a quiet SSA space – all 7 of Daimler’s tranches were guided “at the number.” Somewhat more disconcerting was the fact that two issues – Indiana Michigan Power Co. (power) and Kansas City Southern (rail) – both launched at the widest side of guidance. That’s not a sector-specific event either! That’s atypical spread compression. It is concerning given the duration of syndicate price evolution mechanics across the past week. Additionally, most of today’s new issues broke an average of 2-3 bps wider………what’s more – the average concession across today’s 13 new issues was 4 bps.  That’s what I call trending in the wrong direction folks! Not encouraging as syndicate desks expect a much busier calendar beginning next week and a focused $135b month of May.

On a geopolitical note, just when Korean peninsula denuclearization negotiations are about to begin, Israeli President Benjamin Netanyahu revealed physical evidence today in the form of over 55,000 documents and 183 CDs taken from Iranian nuclear archives proving that Iran has been pursuing its nuclear ambitions in violation of the horrible treaty signed in 2015.  As Gilda Radner’s SNL character Rosanna Danna would say, “There’s always something…..if it’s not one thing, it’s another.”

Having said that I will also point out that we crushed the syndicate midpoint estimate for April IG Corporate new issuance by $26.212b having closed out the month today with a total of $117.612b versus $91.40b estimates or 128.68%.

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 31.52% of this week’s syndicate midpoint average forecast or $8.175b vs. $25.94b.
  • MTD we’ve priced 128.68% of the syndicate forecast for April IG Corporate new issuance or $117.612b vs. $91.40b.
  • There are now 9 issuers in the IG credit pipeline.

 

Today’s IG Primary & Secondary Market Talking Points

 

  • Kansas City Southern upsized today’s 30-year Senior Notes new issue $500mm from $450mm at the launch although at the widest side of 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 <14.54> bps.
  • BAML’s IG Master Index was unchanged at +112. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at +1.08.  (0.85 is its post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +146. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $14.2b on Friday versus $22b on Thursday and $16.2b the previous Friday.
  • The 10-DMA stands at $18.6b.

 

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

 

IG Corporate New Issuance This Week
4/30-5/04
vs. Current
WTD – $8.175b
April 2018 vs. Current
MTD – $117.612b
May 2018
Low-End Avg. $25.24b 32.39% $90.60b 129.81% $133.64b
Midpoint Avg. $25.94b 31.52% $91.40b 128.68% $134.84b
High-End Avg. $26.64b 30.69% $92.20b 127.56% $136.04b
The High $20b 40.88% $80b 147.02% $110b
The Low $35b 23.36% $110b 106.92% $150b

 

Global Market Recap

 

  • U.S. Treasuries – Better bid except 2yr. Supported by month end buying and Iran nuke news.
  • Overseas Bonds – JGB’s closed. Bunds and Gilts better bid. Peripheral’s mostly red.
  • SOFR – Unchanged at 1.72%.
  • 3mth Libor – Set at 2.36294% from 2.35805%.
  • Stocks – Started with gains but rolled over and traded poorly into the close.
  • Overseas Stocks – HS strong rally. China/Japan closed. Europe closed with gains.
  • Economic – PCE Deflator and PCE Core tame MoM but jumped higher YoY.
  • Overseas Economic – German CPI was tame and Retail Sales were weak.
  • Currencies – USD better bid vs. all of the Big 5.
  • Commodities – Crude was under pressure and then rallied on the Iran/Israel news.
  • CDX IG: +0.73 to 60.89
  • CDX HY: +1.98 to 339.77
  • CDX EM: +2.40 to 142.59
  • VIX: +0.38 to 15.79

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

-Tony Farren

 

Have a great evening!
Ron Quigley

 

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

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Muni Bond New Issues Week 04-30-2018 : Edu 201: DASNY
April 2018      Muni Market   

Muni Bond New Issues Scheduled Week of 04-30-18: Taxable Bonds for NYU and Columbia University….Mischler Muni Market Update looks back to last week’s new issue and muni bond fund flow metrics and provides a focused lens on municipal debt new issue calendar 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 $8.0 billion. This week volume is expected to be about $4.3 billion. The negotiated market is led by $606.1 million tax-exempt and taxable bonds for New York University issued by the Dormitory Authority of the State of New York. The competitive market is led by $416.8 million general obligation bonds for Prince George’s County, Maryland (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

municipal-debt-new-issue-week-04302018

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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Muni Market Deals on the Tarmac-NYTDC’s Delta Airlines LGA
April 2018      Muni Market   

Municipal Debt New Issue Outlook Week of 04-23-18: Muni Market Deals on the Tarmac- New York Transportation Development Corp. (Delta Air facilities at LGA), GO Bonds from Mass and IL….Mischler Muni Market Update looks back to last week’s new issue and muni bond fund flow metrics and provides a focused lens on municipal debt new issuance scheduled 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 $6.9 billion. This week volume is expected to be about $7.8 billion. The negotiated market is led by $1.4 billion bonds for Delta Airlines LaGuardia Facilities issued by New York Transportation Development Corporation. The competitive market is led by a pair of $500.0 million general obligation financings for the Commonwealth of Massachusetts (Tuesday) and the State of Illinois (Wednesday).

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

mischler-muni-market-calendar-week-04-23-18

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.

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

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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

  (more…)

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

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

Underwriters include Veteran-Owned Mischler Financial Group

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

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

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

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

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

The full new story is available via this link

Debt Capital Market Comment: Sizing Up CenterPoint Energy
March 2018      Debt Market Commentary   

Quigley’s Corner 03.26.18: Sizing Up CenterPoint Energy Debt Issuance

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
CenterPoint Energy Resources Corp. Lands on Point with Two-Part 5- and 10-Year Transaction
CenterPoint Energy Resources Corp. – Commitment to Our Nation’s Veterans
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 March 21st
IG Credit Spreads by Rating
IG Credit Spreads by Industry
New Issue Pipeline
M&A Pipeline
Economic Data Releases
Rates Trading Lab

Today the IG dollar DCM hosted 7 issuers across 13 tranches totaling $5.60b. The SSA space was quiet.
Mischler Financial was honored to serve as an active Co-Manager on today’s $600mm two-part transaction for CenterPoint Energy Resources Corp. It is today’s Deal-of-the-Day. But before we get to that deal drill down and the good things that CNP does for our nation’s veterans, let’s first take a look at the recaps.

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 37.18% of this week’s syndicate midpoint average forecast or $5.60b vs. $15.06b.
• MTD we’ve priced 85.57% of the syndicate forecast for February IG Corporate new issuance or $114.444b vs. $133.74b.
• There are now 18 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points
o Allstate Corp. increased its $25 par PerpNC5 non-cumulative Preferred, Series “G” to $500mm from $200mm at the launch and at the tightest side of guidance.
o Valero Energy Partners LP upsized today’s 10-year Senior Notes new issue to $500mm from $400mm at the launch.
o The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 12 IG Corporate-only new issues was <12.71> bps.
o BAML’s IG Master Index widened 1 bp to +115 vs. +114. (It’s post-Crisis low is +90 set on 2/01).
o Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.10 vs. 1.09. (0.85 is its post-Crisis low set on 1/30).
o Standard & Poor’s Investment Grade Composite Spread was unchanged at +147. (+125 represents its post-Crisis low set 2/02).
o Investment grade corporate bond trading posted a final Trace count of $16.4b on Friday versus $20.5b on Thursday and $16.2b the previous Friday.
o The 10-DMA stands at $18.2b.

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

 

IG Corporate New Issuance This Week
3/26-3/30
vs. Current
WTD – $5.60b
March 2018 vs. Current
MTD – $114.444b
Low-End Avg. $14.16b 39.55% $133.24b 85.89%
Midpoint Avg. $15.06b 37.18% $133.74b 85.57%
High-End Avg. $15.96b 35.09% $134.24 85.25%
The High $10b 56.00% $150b 76.30%
The Low $25b 22.40% $100b 114.44%

 

Global Market Recap

 

  • U.S. Treasuries – In the red except the 30yr. UST supply and higher stocks were the catalyst.
  • Overseas Bonds – JGB’s, Bonds and Gilts were little changed. Peripherals were mixed.
  • 3mth Libor – Set at 2.29496% the highest yield since November 2008.
  • Stocks – Huge gains at 3pm.
  • Overseas Stocks – Nikkei/HS up. China mixed. Europe traded poorly during NY time.
  • Economic – Regional data was mixed.
  • Overseas Economic – France’s GDP was solid as expected.
  • Currencies – USD was weaker vs. 4 of the Big 5. The DXY Index struggled.
  • Commodities – Could not rally despite higher stocks and weaker USD.
  • CDX IG: -3.15 to 65.83
  • CDX HY: -13.53 to 341.80
  • CDX EM: -2.29 to 143.54
  • VIX: -3.21 to 21.65

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

-Tony Farren

 

 CenterPoint Energy Resources Corp. Lands on Point with Two-Part 5- and 10-Year Transaction 

It was “risk on” this morning with global equity markets well in the black, DOW futures pointing to a +300 point open and the CT10-year at 2.85%  Given the very stable backdrop we expected many of last week’s stand downs to announce this morning so, CenterPoint wasted no time to act aggressively being the first IG Corporate to announce thereby taking full advantage of the strong and stable market backdrop. Levels quoted last week for today’s print were still good if not even more stable with the sheer volume of deals expected in this holiday-shortened week. The green light was given and CenterPoint Energy Resources Corp. announced a two-part $600mm “will not grow” SEC-registered Senior Notes transaction comprised of a $300mm 5-year due 4/01/2023 and a $300mm 10-year due 4/01/2028 at 8:20am ET. As mentioned on last week’s due diligence call “tariffs are a benefit to utilities. As one moves onshore to the U.S. whether tariffs or tax reform, it is helpful to CNP’s and any utility’s everyday business.”

When the big book went subject, the guidance call was postponed for an additional 10 minutes to allow for a large Tier I investor to complete their evaluation which was a great recommendation. That extra anchor order helped propel the 5yr order book to launch at the tightest side of guidance on both. Although spread compression was <3> bps on each of the 5s and 10s the issuer did secure tighter funding levels.  A good day for CenterPoint, securing their funding needs, a good day for their rate payers and a nice execution on a relatively busy day by the joint leads of Bank of America/Merrill Lynch, Citigroup, Credit Suisse and MUFG.

Now let’s look at two very different approaches to valuation on today’s two-part:  

 

5-year Relative Valuethe Centerpoint Resources 4.50% due 1/15/2021 was T+80 this morning (G+87).  The 3s/5s curve should be 10 bps getting us to G+97 nailing NIC on today’s new 5-year as flat or “0”.  The 5s/10s curve is worth between 15-20 bps, let’s call it 17.5 gets you to T+114.5 pegging NIC on today’s new 10-year as 2.5 bps versus T+117 final pricing.

There is another way to approach fair value. Let’s check out scenario #2:

10-year Fair Value – the outstanding CNP (“CenterPoint Energy Resources Corp.”) 4.10% due 9/01/2047 was T+115 pre-announcement this morning. The 10s/30 curve is worth 15-20 bps so, let’s call it 17.5, pegging fair value as T+97.5 vs. today’s T+117 final pricing for a 19.5 bps NIC. The 5s/10s curve is also worth 15-20 bps so, let’s also take the midpoint of 17.5 bps on that as well.  97.5 <17.5> = T+80 landing concession on the 5-year as 17 bps.

I elect to take the mid-point of the two studies calling NIC on today’s 5-year in scenario one (flat or “0”) and 17bps in the latter. So, 17 / 2 = 8.5 bp NIC on the 5yr tranche.

The 10yr is either 2.5 or 19.5 so add them together to getting 22 bps / 2 = 11 bps NIC.

By no coincidence, the average NIC across every IG Corporate new issue that priced last week was 11.82 bps.  So, I’d argue that CNP secured nice executions today in light of the new market norm in here.  The deal got done and tomorrow is another day!

Relative value, as they say, is part art and …………part science!

CenterPoint Energy Resources Corp. Deal Dashboard

 

Use of proceeds from today’s transaction will be used for general corporate purposes, including the repayment of a portion of borrowing under the CenterPoint Energy money pool and commercial paper.

 

CNP Issue RATING IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NIC
(bps)
Trading at
the Break
+/-
(bps)
5yr FXD Baa2(s)/A-(s) +100a +100a (+/-3) +97 +97 <3> bps 8.5 97/95 0
10yr FXD Baa2(s)/A-(s) +120a +120a (+/-3) +117 +117 <3> bps 11 116/114 <1>

 

………and here’s a snapshot of today’s final CenterPoint Energy Resources Corp. book sizes and oversubscription rates – the measure of investor demand:

 

Today’s cumulative $600mm order book total finished at $1.4b making the two-part transaction 2.33x-times oversubscribed with each tranche split as follows:

CNP Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
5yr FXD $300mm $700mm 2.33x
10yr FXD $300mm $700mm 2.33x

 

Use of proceeds from today’s transaction is for general corporate purposes including prepayment of commercial paper and the money pool.

 

Final Pricing – CenterPoint Energy Resources Corp.
CNP $300mm 3.55% due 4/01/2023 @ $ @ $99.782 to yield 3.598% or T+97  MW+15
CNP $300mm 4.00% due 4/01/2028 @ $99.942 to yield 4.007% or T+117  MW+20


CenterPoint Energy Resources Corp. – Commitment to Our Nation’s Veterans
 

A Military-Friendly Employer – Always There

centerpoint energy

If you’ve served our country in the military, CenterPoint Energy knows that you understand the level of commitment it takes to get the job done which is why the Company developed formidable initiatives for veterans, reservists and those in the transition from military to civilian life. Candidates who have military experience will readily identify with CenterPoint’s corporate core values of safety, integrity, accountability, initiative and respect for fellow employees, customers and the communities that it serves.

 

Veterans can view  “Job Openings” on the company’s website to find out what kind of opportunities CenterPoint Energy currently has available for veterans, reservists and those in the transition from military to civilian life. 

Additionally, U. S. Veteran Magazine  recently named CenterPoint Energy one of its “Top Veteran-Friendly Companies.” The company was recognized for its hiring practices, as well as participation in military job fairs and accessible hiring practices for those with disabilities.

Mischler Financial also does its part to give back to our veteran community by donating 10% of its profits to heavily vetted military non-profit organizations throughout the year.  By selecting Mischler to serve as an active Co-Manager on today’s two-part 5- and 10-year transaction it clearly illustrates CNP’s veteran/diversity initiative at work.  The entire team here at Mischler sends its five-star salute to the Treasury/Funding Team at CenterPoint Energy who I worked with today on the transaction specifically Carla, Robert and Erik. You’ve once again helped to move our platform forward in a sustainable way by granting us the opportunity to actively participate in your transaction.  We also thank the Captain at the helm of CNP Treasury/Funding – William “Buck” Rogers, Executive Vice President & Chief Financial Officer. Bill is a distinguished graduate of the U.S. Military Academy with a bachelor’s degree in engineering and economics. Prior to his financial career, he served as a captain in the Army Corps of Engineers for five years. During his service in the Army, he was a master parachutist. So, you see, he’s not only a CFO but he really is THE Captain! We appreciate the meaningful way that you included Mischler on all the transaction calls from initial diligence and market update calls last week through today’s bookbuild.  It also meant a lot that Treasury/Funding reached out this morning with a number where the Treasury/Funding team could be reached during the offering.

Thank you also to team Citigroup Syndicate’s K.O. – Kevin O’Sullivan, and his support crew.  Their data exchanges were seamless and there were constant contact and info flow throughout the book build which I always greatly appreciate from lead left book runners. All three of them were accessible to me, updated me in a timely and efficient way and have always been a pleasure to work with. They are consummate professionals.  So, once again Team Citi Syndicate gets an “A+” from this guy!

And of course, a thank you to our formidable high-quality middle markets distribution network.  I appreciate the loyalty and patronage of all the accounts that participated today!  You know who you are.

 

The “QC” Geopolitical Risk Monitor

Updates are highlighted and in BOLD print!

Risk Level/Main Factor Geopolitical Risks
HIGH ·        N/A
ELEVATED
“North Korea”
·        3/19 – Representatives from the U.S., North and South Korea agreed to meet in Finland to begin talks on the denuclearization of the Korean Peninsula. Sweden meanwhile is involved in talks with NOKO to discuss the fate of three Americans held in the North.  In a major global development on 3/14 and following his full court press against North Korea, President Trump said he would agree to meet with NOKO’s dictator Kim Jong Un under the precondition of a total denuclearization of the Korean Peninsula.
CAUTION
Trade Wars,
Trumponomics
& The Beltway;
BREXIT;
Terror
·        3/23 Trade Wars – China responded to Trump’s planned $50b in tariffs by countering with reciprocal tariffs on 128 U.S. products with more behind that should an agreement not be reached. The PROC also announced it will ease its pace of U.S. Treasury purchases. China owns nearly 20% of all foreign holdings of Treasury securities. Pres. Xi recently had term limits recently lifted. He will now serve for life and so, time is on his side vs. Trump’s 4-year term and elections.

·        3/23 – President Trump replaced national his national Security Advisor H.R. McMaster with John Bolton one day after Trump’s top lawyer John Dowd resigned signaling a more aggressive stance with FBI Director Mueller’s investigation.

·        3/19 the U.K. and EU agreed on a transitional BREXIT arrangement, the first big step toward an orderly withdrawal. Agreement was reached on just about all issues though the question of the Irish border remains to be solved. 3/14 – PM Theresa May announced the expulsion of 23 Russian diplomats from U.K. the most since the Cold War in response to Russia’s state attempted murders of a former spy defector and his daughter on U.K. soil.

·        March 2018 Terror Events and Casualty Total: 86 terrorist attacks; 510 dead; 692 wounded

MODERATE

China, Russia, Italy
& CyberCime
·        3/19 – China threatened military action if the U.S. goes ahead with its Taiwan Travel Act encouraging high level contact with Taiwanese officials that Pres. Trump signed on Friday 3/16. China considers the island nation a province, the U.S. sees it an independent nation. On 3/11 China’s ruling National People’s Congress voted to lift all Presidential term limits assuring President Xi remains in power for life. He is now as powerful as Mao.

·        3/26 President Trump expelled 60 Russian diplomats/spies from the U.S. in response to Russia’s attempted murder of a former agent and his daughter who were granted asylum in London.  Additionally, over 100 Russia spies were sent back to Russia from a coalition of 18 countries. 

·        3/05 – Italy’s anti-establishment parties gained widespread support in elections. Its center-right coalition has 37%. 5-Star Movement (left) has most single party support (32%). Nationalist Northern League is the dominant conservative party. Both right & left are anti-immigration, anti-austerity and support leaving the EU. Italy will have a hung Parliament, however. The result hurts French/German plan for more EU integration. Italy is the EU’s 3rd largest economy, has the world’s 3rd highest debt-to-GDP ratio at 132.5% and a national debt of $2.8 trillion (equiv.) It’s the EU’s biggest economic risk. Italy’s banking sector holds $220bn of bad loans.

·        Cyber Crime: Crypto-jacking, PowerShell-based attacks, cybercriminal underground, ransomware, viruses, hacking, worms and malware estimated to cost the world $6 trillion by 2021. Watch Russia’s involvement.

MARGINAL ·        N/A

 

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

 

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

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
3/19
TUES.
3/20
WED.
3/21
TH.
3/22
FRI.
3/23
AVERAGES
WEEK 3/19
AVERAGES
WEEK 3/12
AVERAGES
WEEK 3/05
AVERAGES
WEEK 2/26
AVERAGES
WEEK 2/19
AVERAGES
WEEK 2/12
New Issue Concessions 18.75 bps 12.78 bps N/A 15.13 bps 15.80 bps N/A 9.16 bps 5.05 bps 5.36 bps 1.95 bps 2.62 bps
Oversubscription Rates 2.26x 2.91x N/A 3.42x 2.86x N/A 2.16x 2.88x 2.52x 3.29x 1.96x
Tenors 10.36 yrs 16.32 yrs N/A 9.58 yrs 11.82 yrs N/A 9.49 yrs 10.43 yrs 13.49 yrs 11.97 yrs 18.16 yrs
Tranche Sizes $788mm $1,173mm N/A $450mm $784mm N/A $568mm $1,559mm $768mm $626mm $499mm
Avg. Spd. Compression
IPTs to Launch
<10.75> bps <13.80> bps N/A <18.00> bps <13.78> bps N/A <7.92> bps <15.63> bps <14.42> bps <16.46> bps <12.82> 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
ABB Finance (USA) Inc A2/A 2.80% 4/03/2020 300 +70a +60a (+/-5) +55 +55 CITI/CS/JPM
ABB Finance (USA) Inc. A2/A 3.375% 4/03/2023 450 +85a +80a (+/-5) +75 +75 CITI/CS/JPM
ABB Finance (USA) Inc. A2/A 3.80% 4/03/2028 750 +110-115/+112.5a +100a (+/-5) +95 +95 CITI/CS/JPM
Allstate Corporation A3/A- FRN 3/29/2021 250 3mL+62.5a 3mL+45a (+/-2) 3mL+43 3mL+43 BAML/JPM/MS/WFS
Allstate Corporation A3/A- FRN 3/29/2023 250 3mL+80a 3mL+65a (+/-2) 3mL+63 3mL+63 BAML/JPM/MS/WFS
Allstate Corporation Baa3/BBB- 5.625% PerpNC5
4/15/2023
500 N/A 5.625-5.75%
5.6875%a
5.625% $25 Pfd MS (Phys)BAML/UBS/WFS
Bell Canada Inc. Baa1/BBB+ 4.464% 4/01/2048 750 +160a +145a (+/-5) +140 +140 BAML/BARC/CITI/RBC/TD
CenterPoint Energy ResourceCorp. Baa2/A- 3.55% 4/01/2023 300 +100a +100a (+/-3) +97 +97 BAML/CITI/CS/MUFG
CenterPoint Energy ResourcesCorp. Baa2/A- 4.00% 4/01/2028 300 +120a +120a (+/-3) +117 +117 BAML/CITI/CS/MUFG
Citizens Bank NA
Providence RI
Baa1/A- FRN 3/29/2023 250 3mL+equiv 3mL+equiv 3mL+95 3mL+95 CITI/CS/MS/WFS
Citizens Bank NA
Providence RI
Baa1/A- 3.70% 3/29/2023 500 +115-120/+117.5a +110 the # +110 +110 CITI/CS/MS/WFS
Dollar General Corp. Baa2/BBB 4.125% 5/01/2028 500 +150a +135a (+/-5) +130 +130 BAML/GS/WFS
Valero Energy Partners LP Baa3/BBB- 4.50% 3/15/2028 500 +180-185/+182.5a +170 the # +170 +170 BARC/CS/MIZ/MUFG

                                                             

 

Indexes and New Issue Volume              

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

*Denotes new high or tight.
  Please note that the below levels are as of 2:30pm ET. Thanks! –RQ

                                                                                                                                         

Index Open Current Change  
IG29 61.007 57.208 <3.799>
VIX 24.87 21.03 <3.84>
CT10 2.814% 2.853% 0.039
S&P 2,588 2,658 70  
DOW 23,533 24,202 669
Nasdaq 6,992 7,220 228
OIL 65.88 65.49 <0.39>  
GOLD 1,347 1,353 6  
 

USD

 

IG Corporates

 

USD

 

Total (IG + SSA)

DAY: $5.60 bn DAY: $5.60 bn
WTD: $5.60 bn WTD: $5.60 bn
MTD: $114.444 bn MTD: $133.544 bn
YTD: $340.946 bn YTD: $441.411 bn

 

2018 Lipper Report/Fund Flows – Week ending March 21st   

     

  • For the week ended March 21st, Lipper U.S. Fund Flows reported a net inflow of $3.484b into Corporate Investment Grade Funds (2018 YTD net inflow of $26.692b) and a net outflow of $1.174b from High Yield Funds (2018 YTD net outflow of $14.889b).
  • Over the same period, Lipper reported a net inflow of $513.286m from Loan Participation Funds (2018 YTD net inflow of $2.630b).
  • Emerging Market debt funds reported a net inflow of $51.470m(2018 YTD inflow of $2.204b).

 

IG Credit Spreads by Rating

(more…)

New York Leads Municipal Debt New Issuance This Week
March 2018      Muni Market   

Municipal Debt New Issue Outlook Week of 03-12-18; New York Top of Muni Issuer List  Mischler Muni Market Update looks back to last week’s new issue and muni fund flow metrics and provides a focused lens on municipal debt new issuance scheduled 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 $8.0 billion. This week volume is expected to be about $6.1 billion. The negotiated market is led by $1.0 billion building aid revenue bonds for New York City Transitional Finance Authority, New York. The competitive market is led by $1.33 billion state sales tax bonds issued by Dormitory Authority of the State of New York in 5 bids on Tuesday.

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

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