Just two offerings are expected to price in the US investment-grade corporate bond primary on Tuesday as a summer lull continues in the last week of August.
No offerings are expected in the high-yield primary.
A small menu of economic data releases are slated for release today, including the Conference Board's Consumer Confidence Index.
On Monday one IG offering was priced totaling US$300m, lifting August IG issuance to US$105.745bn, according to IFR data.
No offerings were priced in the HY primary yesterday, leaving August HY issuance at US$18.05bn, the data show.
The average IG bond spread was unchanged at 96bp on Monday and the HY bond spread tightened by 4bp to 315bp, according to ICE BofA data.
"High grade spreads were unchanged yesterday in a mostly non-descript session likely to exemplify this pre-holiday week as a whole," BMO said.
HIGH GRADE
At least two issuers are slated to price bonds in the US investment-grade market on Tuesday, after investors welcomed just one deal yesterday.
Today’s two fundraisings are both from Yankee borrowers. This morning Hong Kong-listed BOC Aviation launched a US$500m offering of seven-year senior unsecured bonds at US Treasuries plus 105bp, following initial price guidance of 140bp area.
The other deal is from Allianz. The German insurance giant is preparing to price a benchmark offering of 30-year non-call 10-year Tier 2 notes. Initial price thoughts have been revised in to 6% area from 6.125% area.
LEVERAGE/HIGH YIELD
It is another dead day for the primaries, and trading in the secondary market has also been lighter as Wall Street takes its summer leave.
JP Morgan estimates that trading volumes in the high-yield market reached about US$5.3bn yesterday versus average daily volumes so far this year of US$8.7bn.
The 9.875% 2031 issued by JetBlue earlier this month has been one of the more actively traded bonds as it continues to wallow below its reoffer price of 99.363.
The bond traded yesterday afternoon at 98.875, though that is off its low of 97.345, according to MarketAxess data.
Elsewhere, Safeway’s 7.25% 2031 has changed hands in the secondaries over the past few days. It was quoted this morning at 103.765 after trading as high as 105.50 on Friday.
The supermarket chain is part of grocery company Albertsons, which is in the process of being bought by Kroger.
STRUCTURED FINANCE
The mortgage sector will provide a bit of action in the securitization primary in an otherwise quiet week.
A&D Mortgage is expected to price a US$343.4m non-QM RMBS offering on Wednesday, a person familiar with the deal said.
LATAM
Engie Energia Chile has mandated BNP Paribas and UBS as joint leads on an inaugural green Swiss franc-denominated bond offering. Meetings with fixed income investors are scheduled for tomorrow.
Argentina's Pampa Energy launched yesterday an offer to buy back its outstanding US$750m Series 1 7.5% notes due 2027. The offer, which expires September 5, is conditioned on the successful issuance of new notes.
Citigroup, Deutsche Bank, JP Morgan and Santander are the dealer managers.
EQUITIES
US ECM bankers continue to lay the groundwork for a post-Labor Day rebound in the IPO market.
CeriBell joined the expanding pipeline after filing for a Nasdaq IPO late Monday that could help grow sales of its AI powered diagnostic tool for predicting and monitoring seizures.
Bank of America and JP Morgan are acting as joint bookrunners. The medtech is the fifth new addition to the US IPO calendar after last week’s filings from Brazil Potash, Bicara Therapeutics, MBX Biosciences and Zenas BioPharma.
Still, proceeds from this September’s IPO harvest will likely fall well short of the massive haul provided by Arm, Instacart and Klaviyo from their jumbo IPOs in 2023.
In addition to restocking the IPO pipeline, bankers have also been keeping busy during the usual late August market lull with a string of large unregistered block trades.
Bank of America continued the trend by serving up US$702m of Mediterranean fast-casual restaurant chain Cava.
The bank offloaded its purchase of 6m shares or 5.2% of Cava at US$117, the bottom of the US$117-$121 marketing range and a 7% discount to Monday’s US$125.80 closing price.
The unnamed seller, most likely Luxembourg-based Artal, cashed in on a near tripling of Cava shares this year, including a 23.3% bounce since the company reported strong fiscal Q2 results last week.