A robust comeback of markets is spurring for a second session more issuers into the US investment-grade corporate primary with at least 17 offerings set to price today, following seven issues yesterday.
Among the herd of issuers today is Meta with a five-part offering.
Global markets continued to recover on Wednesday after enduring a massive global selloff on Monday and Friday, triggered by a weak jobs report spawning concerns over a potential recession in the US. Stocks are opening higher again this morning and US Treasury bond and note yields are edging up, with the 10-year note yield higher at 3.94%.
"After a Manic Monday, the Eternal Flame of optimism was relit yesterday with a sizeable rebound in risk that started with the Nikkei up over 10% and ended with the S&P 500 gaining 1.04%, ending three days of consecutive losses that wiped out around 6% of the index’s value," Deutsche Bank Research said in a report today. "As equities recovered, 10-year Treasuries sold off as demand for safe assets faded."
The ECM arena woke up yesterday and saw ANI Pharmaceuticals launching one day of marketing to raise US$250m from the sale of a five-year convertible bond.
The US IG primary opened up yesterday after two days of quiet and issuers rushed into the market.
"With strong expectations for supply heading into the week and extremely supportive risk tone this morning, today is shaping up as a very active day in the IG primary market," BMO said in a report today. "The day has the potential to be an important tone setter for the IG primary market in the weeks ahead."
The US high-yield primary is coming to life today with its first offerings since last week.
On the US data front the only release scheduled today is June's consumer credit report at 3:00pm New York time. Yesterday economic data releases included trade.
On Tuesday seven IG offerings were priced totaling US$6.77bn, lifting August IG volume to US$15.595bn, according to IFR data.
Yesterday, the average IG new issue concession was 6.33bp and the average order book was 6.2x oversubscribed, according to the data. Average price progression from IPTs to pricing was tighter by 28.56bp.
"Given the extremely uncertain market backdrop, it’s not surprising to see concessions tick higher," BMO said.
No offerings were priced in the HY primary yesterday.
The average IG bond spread tightened by 4bp to 108bp on Tuesday and the HY bond spread narrowed by 26bp to 367bp, according to ICE BofA data.
"IG index spreads snapped approximately 4bp narrower on very strong volumes during yesterday’s session as the volatility that gripped financial markets for the previous week finally abated," BMO said.
HIGH GRADE
At least 17 US investment-grade bond offerings are expected to price on Wednesday.
Some of today's deals could be on the larger side. Technology giant Meta Platforms is returning to the market for the first time since May 2023 with a five-part bond offering.
Financing entities of car companies Volkswagen and BMW are also pricing bond offerings, while DR Horton is bringing a rare deal from a homebuilder.
Meanwhile, offerings from Coca-Cola and Unilever will give investors a bite of the consumer goods sector.
On top of yesterday's utility deals, Tucson Electric Power and Idaho Power are selling bonds.
Today's issuers also include GE HealthCare Technologies, REIT Extra Space Storage, car parts distributor Genuine Parts, car parts supplier BorgWarner, hospitality company Host Hotels & Resorts, paint maker Sherwin-Williams, infrastructure contractor Quanta Services, hospital operator HCA Healthcare and manufacturer IDEX.
LEVERAGE/HIGH YIELD
The US high-yield primary is seeing signs of life on Wednesday after a two-day lull following the market rout earlier this week.
InfraBuild Australia has announced a US$200m add-on to its existing senior secured 14.5% 2028s ahead of expected pricing today.
Those bonds have seen little trading recently but changed hands last week at a dollar price of 103.997 to yield 12.948%, according to MarketAxess data.
Lightning Power, meanwhile, is also moving forward with a US$1.5bn eight-year non-call three offering after releasing guidance at 7.5% area, the upper end of initial thoughts of 7.25%-7.50%. Pricing is also expected today.
The newly created power producer is using proceeds from the bond and a term loan B to refinance debt at subsidiaries and to pay shareholders.
STRUCTURED FINANCE
A couple of issuers across the asset-backed securities sector priced deals on Tuesday – while one, T-Mobile US, postponed a transaction.
T-Mobile US decided yesterday to postpone a US$500m sale of bonds backed by wireless equipment installment plans via joint lead arrangers RBC, Barclays and SMBC.
Meanwhile, Textainer printed an upsized US$452.1m offering of container lease asset-backed securities on Tuesday via Wells Fargo, Bank of America and RBC. The trade’s biggest tranche, a Double A-rated US$379.7m portion, has a weighted-average life of 6.01 years and printed at US Treasuries plus 155bp.
Also yesterday, Commercial Credit Group priced a US$458.7m transaction. The A2 tranche totals US$303.7m, has a WAL of 1.74 years and printed at plus 95bp.
Elsewhere, IPFS, M&T Bank and Sallie Mae are all planning to print deals this week.
LATAM
Telecom Argentina completed yesterday a tender offer to purchase up to US$100m of its outstanding 8.5% notes due August 6, 2025. A principal amount of US$58.382m was tendered and accepted for purchase. The offer expired on August 5.
LatAm sovereign five-year CDS widened 3bp for Colombia, and tightened 1bp for Chile, according to Lucror Analytics.
EQUITIES
ANI Pharmaceuticals broke the ice in a slow week for US ECM activity by launching one day of marketing to raise US$250m from the sale of a five-year convertible bond.
In the week's sole US ECM offering so far, JP Morgan, Jefferies and Leerink Partners are marketing the rare disease specialist’s new security at a coupon of 2.25%-2.75% and a conversion premium of 27.5%-32.5% through Wednesday for pricing after the close.
The biotech's shares closed at US$63.29 on Tuesday, putting the initial conversion price at roughly US$82 a share.
Ani is using some of the proceeds to purchase a call spread to offset future earnings dilution to a much higher share price and the rest to fund an acquisition.
In June, Ani agreed to pay US$381m in cash for Alimera Sciences.
JP Morgan and Blackstone Credit & Insurance committed US$280m of bridge funding for the deal.