The US investment-grade and high-yield corporate primaries are quiet on Friday.
The IG primary on Thursday saw three issues price totaling US$5.05bn, lifting weekly issuance to US$26.3bn and October volume to US$55.45bn, according to IFR data. The average new issue concession was flat while the average order book was 3.12x subscribed, according to the data. The average move from initial priced thoughts to pricing was 28.63bp tighter.
In the HY primary just one offering was priced totaling US$1.15bn, raising weekly volume to US$3.675bn and October issuance to US$12.745bn, IFR data show.
The average IG bond spread was unchanged at 83bp on Thursday and the HY spread edged in 1bp to 289bp, according to ICE BofA data.
For the week ended October 16, Lipper US Fund Flows reported that the all short-intermediate investment-grade debt funds/ETFs net inflow was US$2.17bn and the all corporate high-yield debt funds/ETFs net inflow was US$664.23m. The all domestic equity funds/ETFs net inflow was US$20.899bn and the all nondomestic equity funds/ETFs net inflow was US$1.749bn.
HIGH GRADE
The US investment-grade bond market is not expected to draw fresh deals today, capping a busy week of supply for US banks.
Yesterday's issuance was in line with the broader theme of heavy financial supply, with the three high-grade deals coming from State Street, Royal Bank of Canada and US Bancorp.
Notably, RBC sold a US$1bn 60-year non-call 10 limited recourse capital note for Additional Tier 1 capital at 6.35%, the tightest coupon achieved by a Canadian bank for a LRCN offering.
LEVERAGE/HIGH YIELD
It looks to be a quiet day for junk-bond borrowers on Friday after a week that saw the pace of issuance slow.
Just three companies raised US$3.675bn this week, bringing monthly volumes to US$12.735bn
Lucrative trading firm Jane Street topped off the week on Thursday when it priced a US$1.15bn eight-year non-call three secured offering at par to yield 6.125%, the tight end of 6.25% area talk.
The company upsized the deal from US$1bn and is expected to use proceeds as trading capital.
Next week is expected to see a US$650m seven-year non-call three offering from Rise Baking. Proceeds from the bond and a US$650m term loan B will be used to help fund a US$2bn acquisition of the company by Platinum Equity and Butterfly Equity.
STRUCTURED FINANCE
Three asset-backed securities issuers raised more than US$1.4bn on Thursday.
The biggest of the three came from Wells Fargo Bank, which yesterday priced an upsized US$1bn offering of three-year Triple A rated credit card-backed notes at 44bp over US Treasuries. Guidance was plus 46bp-48bp. The deal was upsized from US$500m.
The day’s other two deals were Equify Financial’s US$153m equipment ABS trade and a US$275m consumer loan offering from Oportun.
Meanwhile, Thursday’s largest structured finance transaction was in the CMBS market. Property developer Tishman Speyer priced a US$3.23bn bond backed by the iconic Rockefeller Center in New York City. The deal is the biggest CMBS issue of the year so far.
Its largest tranche, the US$1.78bn five-year Triple A portion, printed with a yield of 5.4%. Bank of America and Wells Fargo were the bookrunners.
LATAM
BTG Pactual raised yesterday US$500m from a long five-year senior unsecured bond. The Brazilian issuer priced the 5.75% senior unsecured 144A/Reg S long five-year note at a yield of 5.875%.
Deutsche Bank, BTG Pactual, Citigroup, JP Morgan and Santander were the bookrunners.
Millicom International Cellular, which does business as Tigo, announced today its intent to redeem in full its US$147.9m outstanding 6.625% senior notes due 2026.
EQUITIES
US ECM syndicate desks raised only US$1.5bn from four offerings this week as investors instead waded through a barrage of earnings and issuers mostly stuck to the sidelines three weeks out from the presidential election.
Bankers are still hoping to bring some big offerings before the year is out, none more so than a widely speculated US$10bn-$15bn equity/equity-linked offering from struggling aircraft maker Boeing (possibly soon after it reports its quarterly numbers next week).
In this week’s biggest pricing, Lucid secured nearly US$1.7bn late Wednesday from a public and private stock sale, the latest in a series of equity raises to fortify its balance sheet while it continues to burn plenty of cash.
After an earlier wall-cross, Bank of America offloaded its purchase of 262.4m shares in the premium EV maker at US$2.66, the bottom of the US$2.66–$2.80 marketing range and an 18.9% discount to the prior close of US$3.28.
Adding to the US$698m of public proceeds, Lucid raised another US$996m from the private sale of 374.7m shares to Saudi Arabia’s Public Investment Fund at the same price the bank paid for the new stock.
Lucid shares plunged 18% to close Thursday's session at US$2.69, modestly above the reoffer price after trading as low as US$2.65.
The week’s deals also included a CB refi from Guidewire Software (US$600m) and acquisition financing from VSE (US$150m) via an overnight stock sale on Tuesday.
Rare disease specialist Capricor Therapeutics padded its balance sheet by raising US$75m from an upsized overnight stock sale as it works through the FDA approval process for a Duchenne muscular dystrophy drug.
Looking ahead, the biggest deal on the calendar is private equity-backed IT distributor Ingram Micro’s US$427.8m NYSE IPO, which is scheduled to price on Wednesday night.