Browsing articles tagged with " mischler"
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

       (more…)

Debt Market Comment Week in Review and Looking Ahead -Mischler Viewpoint
May 2018      Debt Market Commentary   

Quigley’s Corner 05.04.18 Debt Market Comment Week in Review and Looking Ahead

Mischler 2018 Memorial Day Month Pledge Dedicated To…

Today’s IG Primary & Secondary Market Talking Points : Reprieve

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

The Best & Brightest Fixed Income Syndicate Forecasts and Sound Bites

QC Geopolitical Monitor

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

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

Indexes and New Issue Volume              

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

 

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) work 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.


Debt Market Comment |Investment Grade New Issue Re-Cap 


It was a great day for a goose egg with nothing having priced in our IG dollar DCM heading into the weekend and given the recent soft primary market tone in anticipation of a potentially much busier week ahead.  That’s right, I’ve spoken with the top 24 syndicate desks with some interesting sound bites. Most prominently, volume ahead can be heavily influenced by any one or a combination of anticipated M&A related financings among which are United Technologies Corp., Dr. Pepper Snapple Group, Bayer AG and General Dynamics Corp. Also, “if” HSBC decides to print a massive transaction, it too can upward skew the numbers. The big assumption, as one person in the know expressed, is, “it’s going to be busy if the market doesn’t completely melt down!”

 But why listen to me when you can read it direct from the 24 syndicate desks who price over 80% of the IG debt deals in Corporate America? That’s what the Friday “QC” brings you every week and that’s why this edition is called the “Best and the Brightest!” They are all waiting patiently below with their numbers and meaningful comments but as always let’s first run through this week’s recaps before I set the table for you for next week.

Get informed and enjoy the read but most of all…

Have a great weekend!

Ron Quigley, Managing Director & Head of Fixed Income Syndicate

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 85.00% of this week’s syndicate midpoint average forecast or $22.05b vs. $25.94b.
  • MTD we’ve priced 10.29% of the syndicate forecast for April IG Corporate new issuance or $13.875b vs. $134.84b.
  • There are now 12 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

  • BAML’s IG Master Index widened 1 bp to +116 vs. +115. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to +111 vs. 1.10.  (0.85 is its post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +150 vs. +149. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $16.4b on Thursday versus $19.3b on Wednesday and $22b the previous Thursday.
  • The 10-DMA stands at $18.8b.
  • Taking a look at the secondary trading performance of this week’s 35 IG Corporate and 1 SSA new issues, of the 36 IG deals that priced, 22 tightened versus NIP for a 61.00% improvement rate, 7 widened  (19.50%) and 7 were flat (19.50%).
  • For the week ended May 2nd, Lipper U.S. Fund Flows reported a net inflow of $996.495m into Corporate Investment Grade Funds (2018 YTD net inflow of $36.571b) and a net inflow of $526.111m into High Yield Funds (2018 YTD net outflow of $14.084b) which was the largest HY inflow since December 2016.

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

 

IG Corporate New Issuance This Week
4/30-5/04
vs. Current
WTD – $22.05b
May 2018 vs. Current
MTD – $13.875b
Low-End Avg. $25.24b 87.36% $133.64b 10.38%
Midpoint Avg. $25.94b 85.00% $134.84b 10.29%
High-End Avg. $26.64b 82.77% $136.04b 10.20%
The High $20b 110.25% $110b 12.61%
The Low $35b 63.00% $150b 9.25%

 

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

I am happy to announce that the “QC” once again received 100% unanimous participation from all 24 desks surveyed for today’s “Best & Brightest” Syndicate edition!  Thank you to all of them. 20 of today’s respondents are in the top 21 including 21 of the top 24 according to today’s Bloomberg U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  The 2018 League table can be found on your terminals at “LEAG” + [GO] after which you select (U.S. Investment Grade Corporates).  The participating desks represent 80.25% of all IG dollar-denominated new issue underwriting as of today’s table share percentage which simply means they are the ones with visibility.  But it’s not only about their volume forecasts; it’s also about their comments!  This core syndicate group does it best, they know best, so they are the ones you WANT and NEED to hear from.  It’s a great look at the week ahead.

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

As always “thank you” to all the syndicate desks that participated in today’s survey.  I greatly appreciate your time to contribute and for making this edition of the “QC” among Wall Street’s most widely read debt market commentaries. 

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

Kim Jong-Un offered to readjust North Korea’s “Pyongyang” time zone that runs 30 minutes behind South Korea to match its southern neighbor as a symbol of his commitment to peace. The heads of North and South Korea met on 4/27 in the demilitarized zone to begin negotiations and mutual commitments to completely denuclearize the Korean peninsula. The meeting was historic and made for great photo ops, but was devoid of details. Still, some are holding on to hope this meeting could be the start of one of the great foreign affairs coups of the past century. Meanwhile, U.S. Treasury Secretary Steve Mnuchin is “cautiously optimistic” about negotiations with China over trade tariffs and regulations in the aftermath of Trump’s $50b tariffs in retaliation for China’s stealing of corporate America’s intellectual property. Markets are fearful of a full blown trade war. Talks could reduce tensions, and perhaps even the playing field. China will NOT change its economic policies and was vocal when saying it won’t be “bullied” by the U.S. If talks do bear fruit, it could result in Trump backing off tariff threats. Members of the U.S. delegation include Peter Navarro, Larry Kudlow, Wilbur Ross, Robert Lighthizer and Ambassador Terry Branstad.   

In the Middle East, Israeli PM Netanyahu held a televised address last Monday, revealing 50k+ documents and 180+ CDs of data proving Iran’s secret nuclear weapons program is underway in violation of the 2015 deal that Trump wants to renegotiate or abandon. Netanyahu said the docs were moved to a secret Tehran locale post deal. The IAEA, however, sees no “credible indications of activities in Iran relevant to the development of a nuclear explosive device after 2009.”    

Italian President Sergio Mattarella prefers to resolve the coalition deadlock by ruling with a short-term gov’t. rather than new national elections. On 4/30, Italy’s leftist 5-Star Movement head, Luigi Di Maio acknowledged his failure to form a coalition gov’t, calling for new elections. 5SM approached the center-left Democratic Party (“PD”) to enter into exploratory talks after it refused to negotiate with the right alliance lest ties with Berlusconi are severed. The nation has had no government for 58 days, or 24 days less than the record 82 set in 1992. Italy had 70 post WWII gov’ts in 72 post-WWII years – one every 1.02 years! – and it is the EU’s 3rd largest economy, the world’s 3rd highest debt-to-GDP ratio at 132.5% and a $2.8 trillion (equiv.) national debt. It’s the EU’s biggest economic risk. Italy’s banking sector holds $220bn of bad loans. 

Soft market tone prevails in our IG dollar DCM. In terms of primary markets, of the last 69 IG Corporate deals that priced, 32 saw guidance stagnate “at the number” while 3 of those deals launched at the widest side of guidance. That’s 46.4% of all deals priced in the past 9 sessions!  What’s more, many have traded in the gray wider to much wider and with 4 bps average NIC across that period, that’s going in the wrong direction.  This week should have been a table setter for what’s expected to be a much bigger week next week in a month that is historically robust.  

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

  • The IG Corporate WTD total stands at $22.05b. We priced $3.89b less than this week’s average midpoint estimate of $25.94b or <15.00%>.
  • MTD we priced 10.29% of the syndicate midpoint forecast for IG Corporate new issuance or $13.875b vs. $134.84b.
  • Entering today’s session, the YTD IG Corporate-only volume is $478.546b vs. the $515.420b YoY which is <$36.874b> or <7.15%> less than a year ago.
  • The all-in or IG Corporate plus SSA YTD volume is $622.111b vs. $647.736b YoY making it  <$25.625b> or <3.96%> less than vs. 2017.

Here are the five key primary market driver averages for the 35 IG Corporate-only deals that priced this week.   

o   NICS:  5.92 bps  

o   Oversubscription Rates: 2.16x

o   Tenors: 13.17 years

o   Tranche Sizes: $630mm

o   Spread Compression from IPTs to the Launch: <12.54> bps 

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

  • Week on week, average NICs widened 2.29 bps to an average 5.92 bps vs.  3.63 bps across this week’s 35 IG Corporate-only new issues that displayed relative value.
  • Over subscription or bid-to-cover rates, the measure of demand, decreased by 0.37x to an average 2.16x vs. 2.53x. 
  • Average tenors extended by 3.98 years to an average 13. 17 years vs. 9.19 years.
  • Tranche sizes decreased by $156mm to $630mm vs. $786mm last week.
  • Spread compression from IPTs to the launch/final pricing of this week’s 35 IG Corporate-only new issues widened by 1.31 bps to <12.54> bps vs. <13.85> bps.
  • Standard and Poor’s Investment Grade Composite Spread widened 4 bps to +150 vs. +146 week-on-week. 
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning widened 3 bps to 1.11 vs. 1.08 week-on-week.
  • Investment grade corporate bond trading posted a final Trace count of $16.4b on Thursday versus $19.3b on Wednesday and $22b the previous Thursday.  
  • The 10-DMA stands at $18.8b.
  • The VIX widened 0.49 or 3.18% to 15.90 at yesterday’s close vs. last Friday’s 15.41 close.
  • Week-on-week, BAML’s IG Master Index widened 4 bps to +116 vs. +112.  
  • Spreads across the four IG asset classes widened 3.50 bps week-on-week to 22.00 vs. 18.50 bps as measured against its cumulative post-Crisis low.
  • Spreads across the 19 major IG industry sectors widened 4.84 bps to an average 27.05 vs. 22.21 bps as measured against their average cumulative post-Crisis lows!
  • For the week ended May 2nd, Lipper U.S. Fund Flows reported a net inflow of $996.495m into Corporate Investment Grade Funds (2018 YTD net inflow of $36.571b) and a net inflow of $526.111m into High Yield Funds (2018 YTD net outflow of $14.084b) which was the largest HY inflow since December 2016.

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

  • IG Corps: $22.05b
  • All-in IG (Corps + SSA): $22.60b

And now it’s time for today’s question posed  to the industry’s leading investment grade debt syndicate desks:  “What are your thoughts and numbers for next week’s IG Corporate new issue volume?”
Wishing you and yours a wonderful weekend!
Ron

 

The “Best and the Brightest” in Their Own Words

(more…)