The US investment-grade and high-yield primaries are quiet today as lightly staffed syndicate desks prepare for the September supply pipeline.
The US ECM arena is idle during the final stretch of the summer break, while structured finance markets rest, eyeing the list of coming offerings post-Labor Day.
Markets are still active, though, with stocks opening the session with gusto after the Nvidia earnings report yesterday evening. US Treasury yields are shifting in a range, responding to the latest round of data, with the 10-year note yield elevated to and hovering around 3.87%.
A mix of economic data releases on Thursday includes weekly jobless claims, which came in slightly under expectations, and the second read of GDP, which came in a bit higher than expected.
"Overall, the data reinforced the notion that employment is driving the macro narrative as the jobless claims print triggered the selling while the downward revision to core-PCE was easily dismissed," BMO said in a report after the releases.
No offerings were priced in the IG primary on Wednesday. Weekly issuance so far this week is three IG offerings totaling US$2.05bn, lifting August IG volume to US$107.495bn.
BMO noted in a report today that weekly IG supply fell short of syndicate expectations of around US$3bn.
For the month of August, the average IG new issue concession was 3.84bp and the average order book was 4.48x subscribed, while the average price progression was 29.587bp tighter, IFR data show.
No offerings were priced in the HY primary yesterday.
The average IG bond spread was unchanged at 96bp for the fourth consecutive market session on Wednesday and the HY bond spread widened by 2bp to 319bp, according to ICE BofA data.
"IG index spreads were unchanged once again during yesterday’s session and remain unchanged for the week as a whole on unsurprisingly light trading volume ahead of the long weekend," BMO said.
HIGH GRADE
No issuers are slated to price bonds in the US investment-grade market on Thursday, the second consecutive day without issuance in what is typically a slow week before Labor Day.
All told, three issuers raised a combined US$2.05bn this week. The biggest trade came from German insurance giant Allianz, which raised US$1.25bn selling 5.6% 30-year non-call 10 Tier 2 notes at par.
LEVERAGE/HIGH YIELD
It is another quiet day in the high-yield primaries as markets brace for what could be a busy September.
In the secondaries, Tenneco’s 8% 2028s enjoyed some trading activity on Wednesday, changing hands at 93.87 in the afternoon, according to MarketAxess data.
That bond was issued in August last year as part of banks’ efforts to offload a bridge loan backing Apollo's US$7.1bn acquisition of the automotive components company.
At the time, the deal was priced at a steep discount of 85.00 to yield 11.914%.
Elsewhere, the 4.25% 2029 issued by AMC Networks continues to be one of the most traded bonds this week after the content distributor reported a US$68m goodwill impairment charge earlier this month.
On Wednesday, the bonds took another leg down to change hands at around 71.70 cents on the dollar after trading last Friday at 75.88.
The 3.5% 2032s issued by split-rated Advance Auto Parts was also moving yesterday at around 87.25 cents on the dollar. Earlier this month, the company announced the sale of its wholesale distribution business Worldpac to Carlyle for US$1.5bn in cash.
S&P downgraded the company last year to BB+ from BBB-, while Moody’s in February cut its rating to Baa3 from Baa2 with a negative outlook. Rating agencies highlighted the credit's languishing sales and deteriorating credit metrics.
STRUCTURED FINANCE
The securitization primary will stay low-key today as dealmakers focus their efforts on bringing supply after the US Labor Day holiday.
Consumer lenders Affirm and Foundation Finance; cell tower operator SBA Communications and online used car retailer Carvana filed yesterday with the Securities and Exchange Commission on their upcoming ABS deals.
LATAM
Engie Energia Chile this morning priced a 2.1275% SFr190m (US$224m) five-year green senior unsecured bond at par.
BNP Paribas and UBS were joint leads on this inaugural green Swiss franc-denominated bond offering.
Fitch downgraded Clisa yesterday to RD from C. The ratings action on the Argentine infrastructure and services company was triggered by a missed coupon payment on its US$358m senior secured bonds due 2027 after the August 26 expiration of the 30-day grace period.
Latin American sovereign five-year CDS yesterday widened 3bp for Mexico and Colombia, and 1bp-2bp elsewhere in the region, according to Lucror Analytics.
EQUITIES
US ECM activity remains non-existent during the final stretch of the summer break, leaving investors to focus on macro events and earnings news.
After the Federal Reserve’s dovish interest rate commentary last week, no event was bigger than Nvidia's fiscal second quarter results released late Wednesday.
Despite beating analysts’ estimates and unveiling a massive US$50bn share buyback plan, the fast-growing AI chipmaker’s seemingly conservative fiscal third-quarter sales and gross margin forecasts disappointed some investors.
Nvidia shares fell 4% to roughly US$120 a share in Thursday's pre-market, shedding roughly US$150bn of market value. Even so, stocks remain close to record highs and volatility levels in a zone that could encourage equity issuers to come to market after the upcoming Labor Day long weekend.
No traditional ECM activity has priced this week, though SPAC Black Spade Acquisition went public via a US$150m Nasdaq IPO, becoming the 28th blank check to list in the US this year.