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

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

 

Investment Grade Corporate Bond New Issue Re-Cap
Today’s IG Primary & Secondary Market Talking Points
Syndicate IG Corporate-only Volume Estimates For This Week and March
Global Market Recap
The “QC” Geopolitical Risk Monitor
NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches
New Issues Priced
Indexes and New Issue Volume
2018 Lipper Report/Fund Flows – Week ending April 11th

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

 

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

 

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

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

  • MTD we’ve priced 51.92% of the syndicate forecast for February IG Corporate new issuance or $47.454b vs. $91.40b.
  • There are now 19 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s 12 IG Corporate-only new issue was <18.92> bps.
  • BAML’s IG Master Index tightened 1 bp to +111 vs. +112. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.06.  (0.85 is its post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +142 vs. +141. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $15.5b on Friday versus $17.3b on Thursday and $13.8b the previous Friday.
  • The 10-DMA stands at $17b.

 

Syndicate IG Corporate-only Volume Estimates for April

 

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

 

Global Market Recap

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

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

-Tony Farren

 

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

 

New Issues Priced

 

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

 

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

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

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Muni Deals This Week: State of CT, GWU; Go Colonials
March 2018      Muni Market   

Municipal Debt New Issue Outlook Week of 03-26-18 – $1.5b taxable for GWU (The George Washington University); Go Colonials. 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 $2.1 billion. This week volume is expected to be about $3.7 billion. The negotiated market is led by $1.5 billion for two taxable financings for George Washington University and Sutter Health and $617million of general obligation bonds for the State of Connecticut. The competitive market is led by $123.7 million tax-exempt and taxable general obligation bonds in two bids for the City of Oklahoma City, Oklahoma 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-issue-calendar-mischler

During 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 $600 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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Municipal Debt New Issue Outlook – State of California Spotlight
March 2018      Muni Market   

Municipal Debt New Issue Outlook Week of 03-05-18; State of California $2.1b GO Deal in the spotlight.   Mischler Muni Market Update looks back to last week’s new issue and muni fund flow metrics and provides a focused lens on municipal bond new issues 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 $4.5 billion. This week volume is expected to be about $7.5 billion. The negotiated market is led by $2.1 billion general obligation bonds for the State of California. The competitive market is led by $604.4 million general obligation and motor vehicle fuel bonds for the State of Washington 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

For reading ease, please click on image below

municipal-bond-offerings-scheduled 020518

During the past two years alone, minority broker-dealer Mischler Financial Group Inc.’s  presence across the primary Primary Debt Capital Markets (DCM) space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 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 veteran-owned broker-dealer 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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Trump Tries Trade War Saber Rattling; March IG DCM New Issue Madness
March 2018      Debt Market Commentary   

Quigley’s Corner 03.02.18 – Weekend Edition: Trump Tries Trade War Saber Rattling; March IG Issuance Madness

  

Investment Grade New Issue Re-Cap

Today’s IG Primary & Secondary Market Talking Points

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

The Best and the Brightest” Syndicate Forecasts and Sound Bites for Next Week; CVS Getting Set?

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

Syndicate IG Corporate-only Volume Estimates for Next Week

The “QC” Geopolitical Risk Monitor

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

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

2018 Lipper Report/Fund Flows – Week ending February 28th  

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

Economic Data Releases

Rates Trading Lab

 

Investment Grade New Issue Re-Cap

What with poor market tone, widening spreads, “chatter” of trade wars from Trump Twitter account, a major Northeast storm on the way and CVS heard rumbling into position for next week’s M&A related financing, it was indeed VERY WISE for the IG dollar DCM to stand down today.  I am once again honoured to have received 100% participation for my Friday “QC” edition, from Wall Street’s Best and Brightest Investment Grade Fixed Income Syndicate sophisticates  I surveyed all of them for next week’s forecast and for March IG Corporate volume.  Strap yourselves in for a humdinger of a week next week and what looks like March IG Issuance Madness. Their thoughtful comments, which add color to their forecast numbers are in-depth and formidable, especially in today’s edition.

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

  • The IG Corporate WTD total is 136.89% of this week’s syndicate midpoint average forecast or $36.85b vs. $26.92b.
  • There are now 11 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

  • BAML’s IG Master Index widened 3 bps to +104 vs. +101. (It’s post-Crisis low is +90 set on 2/01).
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 3 bps to 0.99 vs. 0.96.  (0.85 is its post-Crisis low set on 1/30).
  • Standard & Poor’s Investment Grade Composite Spread widened 3 bps to +138 vs. +135. (+125 represents its post-Crisis low set 2/02).
  • Investment grade corporate bond trading posted a final Trace count of $17b on Thursday versus $23b on Wednesday and $20.1b the previous Thursday.
  • The 10-DMA stands at $18.9b.

 

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

 

IG Corporate New Issuance This Week
2/26-3/02
vs. Current
WTD – $36.85b
Low-End Avg. $25.72b 143.27%
Midpoint Avg. $26.92b 136.89%
High-End Avg. $28.12b 131.05%
The Low $15b 245.67%
The High $40b 92.13%

 

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 25 syndicate desks surveyed for today’s “Best & Brightest” edition!  Thank you to all of them. 17 of today’s respondents are in the top 18 of the new 2018 League table including 19 of the top 21 according to today’s Bloomberg’s 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 (US Investment Grade Corporates).  The participating desks represent 82.87% 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 the most widely read!

“Happy Friday. You can almost hear the rumble of CVS getting into position! I am looking for forecasts for BOTH MARCH and NEXT WEEK today!

All the data you need to know is here. There’s lots to talk about so let’s run through this week’s key geopolitical risk recapas a segue to the big question: What does Wall Street’s Biggest Syndicate Desks Expect re: Next Week’s IG DCM?

 

NORTH KOREA
The U.S. imposed new sanctions against 28 NOKO ships registered under changing names and under different national flags including China. The ships funnel banned exports into NOKO. The action is another step the U.S. has taken toward a full NOKO blockade. With diplomacy the strongly favored path to resolution, the Trump Administration will agree to a diplomatic resolution to tensions only if NOKO agrees to put denuclearization on the table which it refuses to do. In the interim, the U.S. DoD conducted classified military exercises in Hawaii last weekend and the U.S. is pre-staging equipment and supplies in the Pacific. I reiterate that sources continue to tell me to “watch” mid-March thru April as NOKO will be back to its old tricks and the game will ratchet up with newly announced war games along with a much larger allied force participating together.

 

TRUMP TO LAUNCH A TRADE WAR?
Sighting unfair trade practices and bad policy on the U.S. steel and aluminium industries, Pres. Trump invited sector CEOs to the White House on Thursday and when they departed, the current president declared he will impose trade tariffs/quotas on imports amounting to 25% on steel and 10% on aluminium. The announcement, which apparently did not include his sending any advance memos to key White House advisors such as Gary Cohn or TreasSec Mnuchin, was made in the name of “national security,” setting off the fear and tenor of new “trade wars.” The move, coupled with unrelated comments from newly-appointed Fed Chair Powell, weighed heavily on the DOW, which lost 550 points on Thursday and extended declines into Friday’s early trading.

THE FED
New Fed Chief Jay Powell delivered his testimony before the Senate Thursday. Powell sent jitters across markets on Tuesday following his House testimony and Q&A when he said, “my outlook for the economy has strengthened since December” albeit in the midst of the recent historic though transparent, healthy market correction. The market always likes to be ahead of the curve and is concerned over a tighter monetary policy stance with participants repricing in higher inflation and interests rates. Yesterday Powell said 4 hikes “would be gradual” and sighted that aggressive tightening is challenged with inflation so low.

GERMANY
A poll released today showed that 56% of Germans favor the SPD joining Merkel’s grand coalition or “marriage of convenience” to avoid another vote and further turmoil in the EU’s keystone nation. The SPD Party formally votes therein tomorrow March 2nd. The caveat is the poll surveyed a much wider group of voters whereas the Friday vote includes the actual hardcore Socialist members.

U.K. & BREXIT
Theresa May delivers a speech on Friday, March 2nd outlining her vision for the U.K.’s future relationship with the EU. Key points were hammered out at the PM’s country manor Chequers with her cabinet ministers on Feb. 22nd. After having drawn so many red lines pre-negotiations with the EU, May & Co. have backed themselves into a corner. Now Ireland and Wales are pushing back on May regarding her hard stance on the customs union. N. Ireland wants to remain under EU customs rules with a UK/EU border demarcation zone in the Irish Sea. Wales subsequently fears reduced trade as a result of EU and Irish ships avoiding British ports. Wales voted to leave the EU but favors some EU alignment.

ITALY

Italy’s Sunday March 4th election shows the combined right-wing alliance parties running around 37% likely enough for victory. Silvio Berlusconi’s Forza Italia has a narrow lead. The centre-right coalition is projecting sufficient votes to govern without a second ballot.

CHINA

China’s ruling Communist Party proposed lifting limits on presidential terms, a first step to assuring President Xi remains in power interminably. A vote on the proposal is slated for next month and is expected to pass marking a major departure from rules in place for decades. Power has never been as centralized since the days of Mao. Maybe Xi should contemplate a little red book a la Mao and call it “Xi’s Little Red Book Volume II.”

SPAIN

With no compromise in sight, Spain’s PM Rajoy is challenged by efforts to impose order on the Catalan region. It is highly improbable that self-exiled leader Carles Puigdemont governs de facto from Brussels. Meanwhile, PM Rajoy cannot pass a national budget having lost the support of the Basque party that backs Catalonian independence. This could force new elections. Nationalist parties are subsequently securing more support foretelling new tensions in a nation that was ravaged by civil war from 1936-1939.

Let’s now take a deep dive into the technical data.  Entering this morning’s Friday session – 

  • The IG Corporate WTD total stands at $36.85b. We priced $9.93b more than the week’s average midpoint estimate of $26.92b or +36.89%.
  • February finished the month having priced 105.77% of the syndicate midpoint forecast for IG Corporates new issuance or $94.117b vs. $88.98b.
  • Entering today’s session, the YTD IG Corporate-only volume is $229.452b vs. the $272.358b YoY or <$42.906b> / <18.70%> less than a year ago.
  • The all-in or IG Corporate plus SSA YTD volume is $311.067b vs. $354.608b YoY <$43.541b> or <14.00%> less than vs. 2017. 

Here are the five key primary market driver averages for the 29 IG Corporate-only deals that priced this week.   

o   NICS:  5.36 bps  

o   Oversubscription Rates: 2.52x

o   Tenors: 13.49 years

o   Tranche Sizes: $768mm

o   Spread Compression from IPTs to the Launch: <14.42> bps 

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

  • Week on week, average NICs widened considerably by 3.41 bps to an average 5.36 bps vs. 1.95 bps across this week’s IG Corporate-only new issues that displayed relative value.
  • Over subscription or bid-to-cover rates, the measure of demand, decreased by 0.77x to an average 2.52x vs. 3.29x. 
  • Average tenors extended by 1.52 years to an average 13.49 years vs. 11.97 years.
  • Tranche sizes grew by $142mm to $768mm vs. $626mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s 48 IG Corporate-only new issues widened by 2.04 bps to <14.42> bps vs. <16.46> bps.
  • Standard and Poor’s Investment Grade Composite Spread widened 5 bps to +138 vs. +133 week-on-week. 
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning widened 6 bps to 0.99 vs 0.93 week-on-week.
  • Investment grade corporate bond trading posted a final Trace count of $17b on Thursday versus $23b on Wednesday and $20.1b the previous Thursday.
  • The 10-DMA stands at $18.9b.
  • The VIX widened 5.98 or 36.26% to 22.47 at yesterday’s close vs. last Friday’s 16.49.
  • Week-on-week, BAML’s IG Master Index widened 5 bps to +104 vs. +99.  
  • Spreads across the four IG asset classes widened 4.75 bp week-on-week to 12.75 bps vs. 8.00 bps as measured against its cumulative post-Crisis low.
  • Spreads across the 19 major IG industry sectors gapped out 4.73 bps to an average 13.68 bps vs. 8.95 bps as measured against their average cumulative post-Crisis lows!
  • For the week ended February 28th, Lipper U.S. Fund Flows reported a net inflow of $1.372b into Corporate Investment Grade Funds (2018 YTD net inflow of $20.632b) and a net outflow of $702.879m from High Yield Funds (2018 YTD net outflow of $13.202b).
  • Taking a look at the secondary trading performance of this week’s 48 IG Corporate and 5 SSA new issues, of the 53 deals that printed, 11 tightened versus NIP for a 20.75% improvement rate, 33 widened  (62.25%), 9 were flat (17.00%).  

 

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

  • IG Corps: $36.85b
  • All-in IG (Corps + SSA): $43.10b

And now it’s time for today’s question “what are your thoughts and numbers for MARCH and next week’s IG Corporate new issue volume?”
Thank you in advance for your time and contribution!


Please know that on each and every new issue, the guy-in-the-corner is ALWAYS be in YOUR corner on deal day! If an issuer asks you who some of the best diversity firms are, my hope is that you’ll mention Mischler Financial and the guy-in-the-corner.  Our distribution is high quality, prolific and consistent. On deal day, we perform enough to influence your bid-to-cover rates with REAL high quality and unpadded “sticky” account orders.    

Have a great weekend!

Ron Quigley, Managing Director, Head of Fixed Income Syndicate

The “Best and the Brightest” in Their Own Words

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Municipal Bonds “A Powerful New Appeal” – New Issue Schedule Week 022618
February 2018      Muni Market   

Municipal Bonds: New Federal Tax Laws Give Muni Bonds “A New Appeal”;  This Week’s New Issue Schedule   Mischler Muni Market Update looks back to last week’s metrics and provides a lens on municipal bond new issues 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 this week’s issuance.

Last week muni volume was about $5.3 billion. This week volume is expected to be about $4.8 billion. The negotiated market is led by $650.0 million for The Black Belt Energy Gas District, Alabama. The competitive market is led by $837.0 million general obligations for Baltimore County, Maryland, $346.0 million bonds in 2 bids on Wednesday and $491.0 million BAN’s in 2 bids on Thursday.

This past Sunday edition of the New York Times published an interesting snapshot re “new appeal” provided by municipal bonds consequent to the recently-passed federal tax legislation. While ‘academic’ for the universe of municipal debt analysts and professional muni fund managers, the narrative is topical and could be insightful to those who don’t subscribe to the publication. The piece written by NYT reporter Carla Fried is via this link

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

For reading ease, please click on image below

municipal-bond-new-issuance-scheduled-022618

During the past two years alone, minority broker-dealer Mischler Financial Group Inc.’s  presence across the primary Primary Debt Capital Markets (DCM) space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 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…)

Tax Reform Bill Passes Both Houses-Let The Good Times Roll
December 2017      Debt Market Commentary   

Quigley’s Corner 12.20.17 – Tax Reform Bill Heralded By US Corporations

 

Investment Grade New Issue Re-Cap -Tax Reform Bill Ready For President’s Signature

Investment Grade Credit Spreads at Post Financial Crisis Lows

Syndicate IG Corporate-only Volume Estimates For This Week, December & January 2018

Global Market Recap

The “QC” Geopolitical Risk Monitor

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

Indexes and New Issue Volume              

Lipper Report/Fund Flows – Week ending December 13th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Rates Trading Lab

Economic Data Releases

Tomorrow’s Calendar 

Below is the opening extract from Quigley’s Corner aka “QC”  Wednesday December 20 2017 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 fixed income trading and 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.

Investment Grade New Issue Re-Cap – It’s Official: Tax Reform Bill Has Passed in Both Houses

That is one heck of a Christmas present to the American middle class which – make no mistake about it – IS the engine that drives the greatest country on the planet. To illustrate just how great this event could prove to be, let’s turn to the world’s 15th largest global company AT&T Inc. (NYSE:ATT) which announced it will give over 200,000 U.S. employees a special $1,000 bonus – to celebrate the signing of today’s historic tax bill! AT&T also committed to invest $1b in the U.S. in 2018.
IG Spreads Set or Tie Post-Crisis Lows

The good news doesn’t stop there though! Getting more granular to our IG dollar DCM, today saw credit spreads set or tie new post-Crisis lows across the four IG asset classes and the 19 major industry sectors.  It was bound to happen as IG secondary spreads continue to tighten given the absence of any new issuance here at year end among others. I suspect that despite the 10% reduction in IG Corporate new issuance being called for in 2018 as a consequence of the 21% corporate tax rate, there should also be a positive impact of the massive repatriation of trillions of dollars of offshore funds back to domestic corporate coffers. Overall, the new tax reform bill should reflect positively on IG credit quality.

Year-to-date we priced $1.333 trillion in IG Corporate new issues. Many are calling for a 10% reduction in 2018 IG Corporate issuance versus 2017 thanks to repatriation of funds. That would bring the amount down to $1.2tln.  Backing out this year’s $200b in M&A related financings gets you to $1tln even. I think we’ll actually see another 5% increase to that number thanks to redemptions, etc so, and more utility and FIG activity that will bring us to $1.05tln. However, many issuers are looking at their new piles of cash as a “strategic asset” in which they will be asking, “what can we buy with all these new found greenbacks?”  I think we’ll actually see ~$250bn in M&A-related financings.  So, that would bring my total to $1.3tln.

So, $1.3tln is my call for 2018 IG Corporate new issuance. Remember I count split-rated issuance as long as one of the 3 IG ratings is by Moodys, S&P or Fitch and I also include IG rated $25 par Preferreds.

Additionally, today’s November Existing Home Sales beat by 5.06% or 5.81m vs. 5.53m the highest number in 11 years!  The MoM number was 5.6% vs. 0.9% forecasts.

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

  • The IG Corporate WTD total is 0.00% of this week’s syndicate midpoint average forecast or $0.00m vs. $994mm.
  • MTD we’ve priced 79.96% of the syndicate forecast for December IG Corporate new issuance or $26.387b vs. $33b.
  • There are now 5 issuers in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points  

  • The IG Average set a new post-Crisis low of +99; the “AA” asset class also set a new post-Crisis low of +56.
  • The “A” (+77) IG asset class tied its post-Crisis low for the second consecutive session. “BBBs” also tied it post-Crisis low of +129.
  • Of the 19 major industry sectors, a total of 9 of them (47.4%) set or tied their post-Crisis lows as follows: Basic Industry (+124) and Transportation (+102) set new lows while Banking (+82), Consumer Products (+84), Energy (+132), Industrials (+104), Insurance (+108), Real Estate (+111) and Services (+100) tied their post-Crisis lows.
  • BAML’s IG Master Index tightened 1 bp to +99 vs. +100.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 0.94 vs. 0.95.
  • Standard & Poor’s Investment Grade Composite Spread tightened 3 bps to +137 vs. +140 setting a new post-Crisis low dating back to July 30th 2014 (+140).
  • Investment grade corporate bond trading posted a final Trace count of $14.5b on Tuesday versus $12.9b on Monday and $18.6b the previous Tuesday.
  • The 10-DMA stands at $15.4b.

Syndicate IG Corporate-only Volume Estimates For This Week, December & January 2018

 

IG Corporate New Issuance Thru year End
12/18-12/29
vs. Current
WTD – $0.00b
December 2017 vs. Current
MTD – $26.387b
January 2018
Low-End Avg. $344mm 0.00% $31.33b 84.22% $128.54b
Midpoint Avg. $994mm 0.00% $33b 79.96% $129.29b
High-End Avg. $1.64b 0.00% $34.67b 76.11% $130.04b
The Low $0b 0.00% $25b 105.55% $100b
The High $5b 0.00% $28b 94.24% $150b

 Global Market Recap

  •  U.S. Treasuries – 30yr experienced its third terrible session in a row.
  • Overseas Bonds – JGB’s weaker. EU core and semi core lost. EU Peripherals mixed.
  • 3mth Libor – Set at 1.65793% the highest since December 2008.
  • Stocks – Small losses at 3pm.
  • Overseas Stocks – Asia lower except Nikkei. Europe closed red except Greece.
  • Economic – U.S. housing data continues to impress. Existing home sales best since 2006.
  • Overseas Economic – Japan data was mixed. German PPI was lower than the last.
  • Currencies – USD better vs. Yen, weaker vs. Euro/CAD and little changed vs. Pound/AUD.
  • Commodities – CRB, crude oil, gasoline, gold, copper, silver, wheat, etc higher.
  • CDX IG: -0.61 to 49.14
  • CDX HY: -1.46 to 308.13
  • CDX EM: -1.24 to 120.54

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

 

Risk Level/Main Factor Geopolitical Risks
HIGH +
“North Korea”
·        12/20 – U.K. successfully tests Sea Ceptor air defense aboard HMS Argyll recently sent to Sea of Japan to join U.S. Naval ships. System shields against multiple airborne targets protecting 500 square mile area.  NOKO pushed further into a corner. 12/05 – U.S. reveals powerful microwave pulses from missiles that can disable NOKO’s electronic missile/launch systems. 12/02 – WH Nat’l. Security Advisor H.R. McMaster says “possibility of war with NOKO increases every day.” 11/28 – South Korea’s Joint Chiefs of Staff verified that North Korea fired a ballistic missile that landed in the Sea of Japan. SOKO Olympics begin Friday 2/2018 thru Sunday 2/25. 11/20 – Pres. Trump announced the U.S. designated NOKO as a state sponsor of terrorism. Warns NOKO that “nuclearization puts its regime in grave danger & increases the peril it faces.”
ELEVATED
“MENA and
Trumponomics and Beltway Beginning to Function”
·        12/20 – The House, in its re-vote cleared the tax rewrite for Trump’s signature 224-201. Tax Reform is official.  One of the single greatest GOP legislative wins in history. 12/19 – The Senate passed the bill in a 51-48 vote after the House voted in support 227 to 203 (4 no votes) requiring a revote the 12/20 due to a 529 home schooling technicality.  A typical U.S. family will get an add’l. $2k in 2018, the U.S. Corporate tax rate would be reduced to 21%, Americans can choose their own healthcare and Tax  Form is simplified. These are the largest tax cuts in U.S. history. President Trump said he wanted to sign the bill into law before Christmas.

·        12/19 – Yemeni rockets launched at the royal palace in Riyadh intercepted by Saudi forces.  Iranian-backed rebels now targeting population and power centers in Saudi Arabia is more than enough to promote an act of war between KAS and Iran. 12/06 – Pres. Trump formally recognizes Jerusalem as Israel’s capital. Plans to move U.S. embassy there from Tel Aviv. Could take three years. Palestinian leader Mahmoud Abbas and Jordan’s King Abdullah warn Trump of dangerous consequences for stability and security in the Middle East. Turkey’s Erdogan threatens to cut ties with Israel calling the move a “red line for all Muslims” and decision puts “world and region in a ring of fire.” 12/04 – Former Yemeni President Ali Abdullah Saleh assassinated in Sanaa by former allied and Iranian-backed Houthis.  Yemen, like Lebanon are sights of proxy wars fought between Saudi Arabia and Iran. 11/28 – Israeli Mossad working with Saudi’s General Intelligence Presidency (GIP) over mounting tensions with Iran. Shared interests against Iran are bringing both nation’s closer. Lebanon’s PM al-Hariri resigned from Saudi Arabia 11/05 blaming Iranian aggression. Abandons support of Iran’s Hezbollah terror group.  Beirut, is proving ground for Saudi-Iranian proxy wars. Crown Prince Mohammed bin Salman’s plans sweeping with “Vision 2030” to wean KSA off oil. Saudi inner players arrested in anti-corruption probe involving multi-billion dollar “settlements.” Both Trump and KAS share strong views of an anti-nuclear Iran. KSA needs oil above $81 to break even. Mideast tension expected to boost the price of oil.

CAUTION
“Russia, Europe,
Uranium 1 & Terror”
·        December MTD Terror Stats a/o 12/20: 56 terrorist attacks; 225 dead; 414 wounded.

·        U.S. trade protectionism contrarian to the world coming together on trade. Long term impact?

MODERATE
“China”
·        12/19 – Spain’s Rajoy announces snap elections on Thursday, Dec. 21st to help defray the Catalonian independence crisis. Could result in breakaway = could spread thru EU. Separatists remain ahead in latest polls 46.9% to 43.7% for the Unionists. 7.8% are “non-aligned.”

·        Italian elections to be held no later than March 20th, 2018. 5-Star Populist Party leader Luigi Di Maio is hopeful for EU negotiations but said he would vote for an ITALEXIT if discussions fail. Italians are resistant to the EU’s stringent austerity measures. 5-Star holds a lead in polls.

·        China hard landing: rising corporate debt & slower GDP growth are OECD and IMF concerns. Debt is 250% of GDP. 6% GDP in 2018 will be difficult.

·        Cybercrime, ransomware, viruses & hacking.

MARGINAL
“2018 US Recession?”
·        12/13 – FOMC raises rates 0.25% recognizes prolonged inflation miss that is globally low. Sees faster 2018 growth and strong labor market. Economic activity and investment picked up. Low odds of a recession. Concerned about debt. Asset prices characterized as being “elevated.”

 

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Investment Grade Debt New Issuance: FIG Heaven
December 2017      Debt Market Commentary   

Quigley’s Corner 12.18.17  FIG Heaven – Make Reservations Now for January Seating

 

Investment Grade New Issue Re-Cap – 2017 Sets Two All-Time Volume Records

Looking Ahead to Potential FIG Issuance in January 2018

Today’s IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates For This Week, December & January 2018

Global Market Recap

The “QC” Geopolitical Risk Monitor

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

Indexes and New Issue Volume              

Lipper Report/Fund Flows – Week ending December 13th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Rates Trading Lab

Economic Data Releases

Tomorrow’s Calendar 

Below is the opening extract from Quigley’s Corner aka “QC”  Monday December 18 2017 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 fixed income trading and 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.

Investment Grade New Issue Re-Cap
IG Corporate and SSA new issuance posted another shut-out today.  However, even if we get no new supply for the remainder of this year, 2017 already won out as the highest volume year on record for both IG Corporate and all-in IG Corporate + SSA new issuance.  This year’s IG Corporate total beat last year by $48.138b or 3.75% more while all-in volume beat by $23.595b or 1.45%.  Congratulations to all the issuers, bankers, syndicate desks and accounts that made it possible.

Taking a look at the prior six years, each year’s total volume surpassed the prior in both categories:

Year IG Corporates (bn) IG Corps + SSA (bn)
2017 $1,333.355 $1,648.746
2016 $1,285.217 $1,625.151
2015 $1,268.448 $1,512.838
2014 $1,129.33 $1,367.97
2013 $1,051.19 $1,334.76
2012 $1,025.31 $1,254.33

 

It’ll be tough to do this again next year though as the call is for a 10% reduction in 2018 IG Corporate issuance should the new tax reform bill be signed law and the subsequent repatriation of billions of dollars of offshore funds combining with a new and improved 21% corporate tax.

NAHB Housing was the lone piece of economic data today and it surprised to upside in a big way posting a 74 from 70 expectations and a 69 prior reading. That’s an 18-year high! It’s a strong market for homebuyers with national home prices up about 6% YoY.  With strong labor and an improving economy, the outlook is good for home real estate sales.

Looking Ahead to Potential FIG Issuance in January 2018

Next up, I guess we were all a bit stymied by today’s zero issuance activity. But some good souls out there turned it into an opportunity to get creative and work on things they might otherwise not have the time to. So, without further ado, I decided to re-print (with permission of course) a very interesting and informative piece written by none other than Bob Elson. Many of you with Bloomberg terminals may know Bob.  Most everyone in syndicate does.  For the following piece, Bob did the heavy-lifting on what to expect from the big banks or the U.S. six-pack as we roll into the new year.  Not bad for an old dog who remembers when the T30 14% due 2011 traded at a discount.  Given the aforementioned Oscar lead in who else to better give a shout out than Bob Elson who has been “Bond Salesman to the Stars since 1971?”  They don’t make’em like they used to folks and he/they are a class act.

Take it away Bobby E. –

The Large Banks Have January Maturities, They Have a History of January Issuance and for Some, Strikingly Large 2018 Maturities:

Bank of America has $3b maturing Jan. 11

  • Jan. 17, 2017: priced $6.75b in 4 parts
  • Issued in Dec. 2015, rather than Jan. 2016
  • Jan. 16, 2015: priced $2.5b
  • Jan. 15, 2014: priced $4.5b in 2 parts
  • Jan. 8, 2013: 3 tranche deal totaling $8.25b
  • Jan. 19, 2012: $2.25b 10Y
  • Hasn’t been seen since Sept.
  • Has near $28b of 2018 maturities, by far the largest year in its debt distribution
  • Scheduled to announce earning Jan. 17

Citigroup has near $25b maturing in the new year, the largest in its debt distribution

  • Jan. 4, 2017: priced 3-part deal for $5.25b; this was prior to announcing earnings Jan. 18
  • Jan. 5, 2016: priced $2b 10Y; prior to earnings Jan. 15
  • Jan. 29, 2015: priced $2.5b 3Y after announcing earnings Jan. 15
  • Jan. 3, 2013: priced $1.75b 3Y prior to its Jan. 17 earnings
  • Jan. 19, 2012: priced $1b 30Y following its Jan. 17 earnings release
  • Citi will announce earnings Jan. 16

Goldman Sachs has near $6b due Jan. 18-22

  • Jan. 23, 2017: priced $8b in 3 parts
  • Jan. 20, 2015: priced $5.5b in 3 parts
  • Jan. 28, 2014: priced $2.5b 5Y
  • Jan. 16, 2013: priced $5b in 2 parts
  • Jan. 19, 2012: priced $4.5b 10Y
  • 2018 maturities near $26b, the largest in its debt distribution
  • Earnings scheduled for Jan. 17

JPMorgan has ~$8.7b due Jan. 15-25

  • Jan. 25, 2017: $2.75b priced
  • Jan. 15, 2015: priced $6.25b in 2 parts
  • Jan. 14, 2014: priced $2b Jr Sub
    • Jan. 21, 2014: priced $5.25b in 5 parts
  • Jan. 17, 2013: priced 3 part deal for $6.4b
  • Jan. 13, 2012: priced $3.25b 10Y
  • Has near $27b coming due next year, the largest in its debt distribution
  • Will exit earnings blackout Jan. 12

Morgan Stanley has ~$2b due Dec. 28 and ~$2.1b due Jan. 5

  • Jan. 17, 2017: priced $8.25b in 3 parts
  • Jan. 22, 2016: priced 3-part deal totaling $5.5b
  • Jan. 22, 2015: $5.5b in 3 parts
  • Jan. 21, 2014: $2.75b in 2 parts
  • Jan. 23, 2013: $500m 3Y
  • Its 2018 maturities total ~$17.4b
  • Has not been seen since July
  • Earnings scheduled for Jan. 16

Wells Fargo, ~$4.1b Jan. 16-22

  • Jan. 17, 2017: priced $5b in 2 parts
  • Jan. 22, 2016: priced $4b in 2 parts
  • Jan. 15, 2015: priced $2b Jr Sub
    • Jan. 26, 2015: priced $2.65b in 2 parts
  • Jan. 16, 2014: priced $1.7b 7Y
  • Priced $2.1b in Dec. 2012 rather than Jan. 2013
  • 2018 maturities total ~$12.3b
  • Has issued in Nov.-Dec. in four of the past five years
    • Last issued in July
  • Earnings are Jan. 12

If you have a Bloomberg terminal, my strong advice is to reach out to Bob Elson and ask him to add you to his distribution list.  It’s free and you’ll likely get good intel along with some very funny jokes now and then. Please tell him “the guy-in-the-corner” sent you.  Thanks Bob! -RQ

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

  • The IG Corporate WTD total is 0.00% of this week’s syndicate midpoint average forecast or $0.00m vs. $994mm.
  • MTD we’ve priced 79.96% of the syndicate forecast for December IG Corporate new issuance or $26.387b vs. $33b.
  • There are now 5 issuers in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points

  • The “AA” (+57) and “A” (+78) IG asset classes tied their post Crisis lows for the fourth consecutive session.
  • The Real Estate (+111) and Services (+100) sectors set new post-Crisis lows.
  • The Banking (+82) and Transportation (+104) investment grade sector spreads tied their post Crisis lows for the fourth consecutive day.
  • The average spread compression from IPTs and/or guidance thru the launch/final pricing of today’s X IG Corporate-only new issues was <XX.XX> bps.
  • BAML’s IG Master Index tightened 1 bp to +100 vs. +101.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 0.95.
  • Standard & Poor’s Investment Grade Composite Spread tightened 1 bp to +140 vs. +141.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $12.7b on Friday versus $15.9b on Thursday and $14.7b the previous Friday.
  • The 10-DMA stands at $16b.

Syndicate IG Corporate-only Volume Estimates For This Week, December & January 2018

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Investment Grade Corporate Debt Issuance Cools
December 2017      Debt Market Commentary   

Quigley’s Corner 12.08.17 : IG Corporate Debt Issuers Standing Pat

Investment Grade US Corporate Debt New Issue Re-Cap 

Today’s IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates For This Week

Global Market Recap

The “QC” Geopolitical Risk Monitor

The Best and the Brightest” Investment Grade Corporate Syndicate Forecasts and Sound Bites for Next Week & November

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

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

New Issues Priced

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

Indexes and New Issue Volume

Rates Trading Lab

Lipper Report/Fund Flows – Week ending Dec 6th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline Highlights

Rates Trading Lab

Economic Data Releases 

 

Investment Grade New Issue Re-Cap

Today the IG dollar DCM produced zero…….zilch……….nada. It was a December Friday goose egg as they say! The geopolitical risk monitor featured quite a bit of fluid news this week so be sure to review the QC monitor by scrolling below.  Also, the “Best and the Brightest” are back this week albeit there is not much activity lining up to get done. Next week looks like a light front-loaded week of between $5-10b. The average estimate of the 25 top syndicate desks for next week’s IG Corporate only issuance is $7.58b. The FOMC holds its final meeting of 2017 next Tuesday and Wednesday the 12th and 13th with overwhelming expectations for a rate hike that has long been baked into the market………..and despite the absence of inflation.  It looks like December issuance will come to an end a few days earlier than is the historical average with a chance of posting the lowest December IG Corporate issuance volume since $21.10b printed the same week back in 2008.  Team B&B are all waiting below for you to take in their forecasts and comments.  Enjoy the read.

 

Here’s how the session’s IG Corporate new issue volume impacted the WTD and MTD syndicate desk estimates:

  • The IG Corporate WTD total is 98.31% of this week’s syndicate midpoint average forecast or $18.434b vs. $18.75b.
  • MTD we’ve priced 55.86% of the syndicate forecast for December IG Corporate new issuance or $18.434b vs. $33b.
  • There are now 7 issuers in the IG credit pipeline. 

Today’s IG Primary & Secondary Market Talking Points

  • BAML’s IG Master Index was unchanged at +102.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 0.97.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +143.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $16b on Thursday versus $17.9b on Wednesday and $23.6b the previous Thursday.
  • The 10-DMA stands at $16b.

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

IG Corporate New Issuance This Week
12/04-12/08
vs. Current
WTD – $18.434b
December 2017 vs. Current
MTD – $18.434b
Low-End Avg. $17.50b 105.34% $31.33b 58.84%
Midpoint Avg. $18.75b 98.31% $33b 55.86%
High-End Avg. $20.00b 92.17% $34.67b 53.17%
The Low $15b 122.89% $25b 73.74%
The High $25b 73.736% $28b 65.84%

 

Global Market Recap 

  • U.S. Treasuries – Closed mixed with no move greater than 0.7 bps.
  • Overseas Bonds – JGB’s unchanged to better. Bunds & Gilts small red. Peripherals more green.
  • 3mth Libor – Set at highest yield (daily occurrence) since December 2008 (1.54878%).
  • U.S. Stocks – Higher heading into the last hour.
  • Overseas Stocks – Global stock rally.
  • U.S. Economic – Very good U.S. Employment Report with tame average hourly earnings.
  • Overseas Economic – China (trade) & Japan (GDP) were strong. Europe data was mixed.
  • Currencies – USD was better bid vs. all of the Big 5.
  • Commodities – Crude oil ended the week with 2 good days. Gold struggled all week.
  • CDX IG: -0.67 to 50.93
  • CDX HY: -4.47 to 316.39
  • CDX EM: -1.37 to 177.35

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

-Tony Farren

 

The “QC” Geopolitical Risk Monitor

Updates are in BOLD print!

 

Risk Level/Main Factor Geopolitical Risks
HIGH +
“North Korea”
·        12/05 – U.S. reveals CHAMPs or powerful microwave pulses emitted from missiles launched from B-52s that can disable NOKO’s electronic missile and launching systems. 12/02 – WH Nat’l. Security Advisor H.R. McMaster says “possibility of war with NOKO increases every day.” 11/28 – South Korea’s Joint Chiefs of Staff verified that North Korea fired a ballistic missile that landed in the Sea of Japan. SOKO Olympics begin Friday 2/2018 thru Sunday 2/25. 11/20 – Pres. Trump announced the U.S. designated NOKO as a state sponsor of terrorism. Warns NOKO that “nuclearization puts its regime in grave danger & increases the peril it faces.”
ELEVATED
“MENA and
Trumponomics and Beltway Dysfunction”
·        12/06 – Pres. Trump formally recognizes Jerusalem as Israel’s capital. Plans to move U.S. embassy there from Tel Aviv. Could take three years. Palestinian leader Mahmoud Abbas and Jordan’s King Abdullah warn Trump of dangerous consequences for stability and security in the Middle East. Turkey’s Erdogan threatens to cut ties with Israel calling the move a “red line for all Muslims” and decision puts “world and region in a ring of fire.” 12/04 – Former Yemeni President Ali Abdullah Saleh assassinated in Sanaa by former allied and Iranian-backed Houthis.  Yemen, like Lebanon are sights of proxy wars fought between Saudi Arabia and Iran. 11/28 – Israeli Mossad working with Saudi’s General Intelligence Presidency (GIP) over mounting tensions with Iran. Shared interests against Iran are bringing both nation’s closer. Lebanon’s PM al-Hariri resigned from Saudi Arabia 11/05 blaming Iranian aggression. Abandons support of Iran’s Hezbollah terror group.  Beirut, is proving ground for Saudi-Iranian proxy wars. Crown Prince Mohammed bin Salman’s plans sweeping with “Vision 2030” to wean KSA off oil. Saudi inner players arrested in anti-corruption probe involving multi-billion dollar “settlements.” Both Trump and KAS share strong views of an anti-nuclear Iran. KSA needs oil above $81 to break even. Mideast tension expected to boost the price of oil.

·        12/01 – U.S. Senate GOP passes the most sweeping tax overhaul in over 30 years in a 51-49 vote. This is the biggest tax bill and tax cuts in U.S. history. As promised, President Trump wants to sign the bill into law before Christmas.

·        12/01 – Former Trump national security advisor Michael Flynn pleaded guilty to lying to the FBI about contacts with Russia’s ambassador in 12/2016. This places a senior Trump insider in a cooperative position for the investigators.  Then again, how much credibility does a liar have?

·        U.S. trade protectionism contrarian to the world coming together on trade. Long term impact.

CAUTION
“Russia, Europe,
Uranium 1 & Terror”
·        12/06 – Enjoying an 82%+ Russian approval rating, Vladimir Putin announced he will seek a 4th term as President. Serving out a 4th 6-year term would mean 24 years at the top  including P.M. posts. Only Stalin ruled longer at 29 years. Putin moves 2018 election date to 3/18 – the 4th anniversary of annexation of Crimea….in response to Olympic Committee ruling?

·        12/05 – Russian team barred from 2018 Seoul Winter Olympics. Olympic Committee will allow Russian athletes to compete who meet stringent drug testing but they will be referred to as “athletes from Russia” in which no Russian flag can fly, no Russian anthem played and no Russian gov’t. officials can attend.

·        12/03 – Germany’s Social Democrats (Socialist Party) urged by French President Macron to from ruling coalition with Merkel’s conservative bloc.  Following the 11/20 collapse of the “Jamaica coalition” negotiations in the worst crisis of Merkel’s 12yr chancellorship.  New elections as early as next spring may still be the only solution. Sources of tension are immigration, taxation & the environment. Right wing has seat in German decision-making and wants new elections.

·        12/08 – Britain and Ireland agree on Irish border regulations mainly acknowledging there will be no border controls on the Irish Sea. It clears the way for a second a phase of talks with the EU. Negotiators reached agreement in principle on the BREXIT “divorce bill” earlier in the week in the €45b to €55b range down from €60bn that the EU initially demanded. Agreement promotes further December & January negotiations. U.K. withdrawal from EU takes place in 3/2019.

·        Atty. Gen. Sessions raised the possibility of a special counsel appointment to investigate the Uranium One Deal involving the Clinton Foundation in which a Russian company took control of 20% of entire supply of U.S. uranium supply used to make nuclear weapons in exchange for Clinton Foundation donations. In a decree on March 20, 2008 Russia’s Vladimir Putin, abolished the Federal Agency for Nuclear Power. The public corporation Rosatom (he owns) was vested with the authority to implement on behalf of the Russian Federation the rights of shareholders in the joint-stock companies in the nuclear energy industry. In 2013 Rosatom retained full ownership. Matter of U.S. national security.

·        December MTD Terror Stats a/o 12/08: 21 terrorist attacks; 114 dead; 187 wounded.

MODERATE
“China”
·        China hard landing: rising corporate debt & slower GDP growth are OECD and IMF concerns. Debt is 250% of GDP. National Congress of the Chinese Communists Party confirms Xi Jinping as its most powerful leader since Mao. Xi loyalists make up inner sanctum of Chinese politics into the next decade. 6% GDP in 2018 will be difficult.

·        Cybercrime, ransomware, viruses & hacking are winning cyber wars. Recent attacks have hit four continents, law firms, food companies, power grids, pharma and governments.

·        Spain’s Rajoy announces snap elections on Dec. 21st to help defray the Catalonian independence crisis. Could result in breakaway = could spread thru EU. Former Catalan Pres. Puigdemont to appear in court 11/17. On 11/02: 8 Catalan gov’t. members jailed in Spain for role in independence rebellion & sedition.

·        Italian elections in March 2018.

MARGINAL
“2018 US Recession?”
·        12/05 – Senate committee approved Jay Powell nomination to replace Janet Yellen in a 22-1 vote.

·        12/08 – FOMC Meeting Tues/Wed Dec. 12th/13th. Rate hike baked in despite absence of inflation. Bearish flattening signals danger for the U.S. economy. Recent bullish flattening has completely disregarded the absence of inflation. The balance sheet or “b/s” normalization program is proceeding and will remain highly incremental. Fed signals 1 more rate hike in 2017 (December12/13 FOMC); 3 in 2018. Dot plots are unchanged for 2017 & ’18; lower for ’19 & longer-term. Shifts/adjustments in monetary policy outweigh chance of a 2018 recession.

 

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

 

I am happy to announce that the “QC” once again received 100% unanimous participation from all 25 syndicate desks surveyed for today’s “Best & Brightest” edition!  Thank you to all of them. 20 of today’s respondents are in the top 21 while 23 are among 2017’s YTD top 27 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.  The 2017 League table can be found on your terminals at “LEAG” + [GO] after which you select (US Investment Grade Corporates).  The participating desks represent 81.38% of all IG dollar-denominated new issue underwriting as of today’s table share percentage which simply means they’re 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’re 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.  Below is opening to this week’s survey. 

 “Welcome to Friday. In preparation for takeoff, please ensure all negative attitudes are properly stowed. On behalf of QC Air welcome aboard. I expect sunshine and good intel today for our trip. Enjoy the ride and thanks for flying QC Air.

This week’s geopolitical recap: 

The FOMC meets next Tuesday and Wednesday the 13th and 14th.  Over 94% believe the Fed will hike rates which is already baked in. The nation’s largest Tax Reform bill in over 30 years may in fact get signed by President Trump by Christmas. The situation in North Korea remains the lone high risk event on the global risk monitor despite the U.S. claim to possess powerful CHAMPS microwave pulse technology that can disable NOKO’s missile launch systems. The situation in MENA has been upgraded to elevated with Trump’s announcement that the U.S. formally recognizes Jerusalem as Israel’s capital following warnings from Jordanian, Palestinian and Turkish leadership among others that it will destabilize the region. Yemeni President Ali Saleh was assassinated and Prince Mohammed bin Salman’s “Vision 2030” resulted in multi-billion dollar anti-corruption settlements with members of the house of Saud and major KAS players. MBS, as the Saudi Prince is commonly known, also purged rivals in order to anchor his leadership and future plans. Germany’s Social Democrats agreed to pursue preliminary talks to form a coalition government with Merkel’s conservative CDU party and will include a third CSU party. German political stability is needed to cement the EU’s keystone economy. Ireland and Britain are near an accord on future Irish border regulations that would help promote an agreement in principle on the BREXIT “divorce bill.”  Leveraging his 85% approval rating at home, Vlad Putin announced he will seek a 4th 6-year term as President of Russia that would make it the second longest tenure to Stalin’s 29 year reign. Putin also moved the Russian election to coincide with the 4th year anniversary of its annexation of Crimea, possibly in reaction to the prior day’s Olympic Committee ruling that bars Russian officials, flags and anthem at the 2018 Seoul Olympics in which Russian athletes must also agree to stringent drug testing.       

Entering this morning’s Friday session –  

  • The IG Corporate WTD total stands at $18.434b. We priced $316mm less than this week’s average midpoint estimate of $18.75b or 98.31%.
  • MTD we priced 55.86% of the syndicate projection for November IG Corporates or $18.434b vs. $33b.
  • Entering today’s session, the YTD IG Corporate-only volume is $1,325.402b vs. $1,281.017b on December 8th, 2016 or $44.385b (3.46%) more than a year ago.
  • The all-in or IG Corporate plus SSA YTD volume is $1,640.543b vs. $1,620.951b on December 8th, 2016 or $19.592b (1.21%) more than the year ago total. 

Entering this morning’s session, here are the five key primary market driver averages for the 33 IG Corporate-only deals that priced this week. 

o   NICS:  1.62 bps  

o   Oversubscription Rates: 3.18x

o   Tenors: 10.69 years

o   Tranche Sizes: $576mm

o   Spread Compression from IPTs to the Launch: <16.34> bps 

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

  • Week on week, average NICs widened by 1.11 bps to an average 1.62 bps vs.0.51 bps across this week’s 33 IG Corporate-only new issues displayed relative value.
  • Over subscription or bid-to-cover rates, the measure of demand, decreased by 0.13x to an average 3.18x vs. 3.31x. 
  • Average tenors narrowed by 0.74 years to an average 10.69 years vs. 11.43 years.
  • Tranche sizes decreased by $72mm to $576mm vs. $648mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s IG Corporate-only new issues widened by 1.26 bps to <16.34> bps vs. <17.60> bps.
  • Standard and Poor’s Investment Grade Composite Spreads was unchanged at +143.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS thru this morning tightned 1 bp to 0.97 vs. 0.98 week-on-week. 
  • Week-on-week, BAML’s IG Master Index tightened 1 bp to +102 vs. +103. 
  • Spreads across the four IG asset classes tightened 0.25 bps to 3.00 bps vs. 3.25 bps as measured against their post-Crisis lows. 
  • The 19 major industry sectors tightened 0.68 bps to 6.32 bps from 7.00 bps as measured against their post-Crisis lows.
  • For the week ended December 6th, Lipper U.S. Fund Flows reported an inflow of $622.386b into Corporate Investment Grade Funds (2017 YTD net inflow of $116.331b) and a net inflow of $217.412m into High Yield Funds (2017 YTD net outflow of $12.633b).
  • Taking a look at the secondary trading performance of this week’s 33 IG Corporate and 6 SSA new issues, of the 39 deals that printed, 23 tightened versus NIP for a 59.00% improvement rate, 11 widened  (28.25%) and 5 were flat 12.75%).

 

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

  • IG Corps: $18.434b
  • All-in IG (Corps + SSA): $24.684b 

And now it’s time for today’s question “what are your thoughts and numbers for next week’s IG Corporate new issue volume?” Thank you in advance for your time and contribution! 

 

The “Best and the Brightest” in Their Own Words

 

……..……and here are their responses:

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