The US investment-grade corporate primary expects one issue on Wednesday, while the high-yield arena is active with at least three offerings expected to price.
Economic data releases today include the existing home sales report and the Fed's Beige Book.
On Tuesday two IG offerings were priced totaling US$8.7bn, lifting weekly volume to US$11.45bn and October issuance to US$66.90bn, according to IFR data. The average new issue concession was 0.57bp and the average book order was 3.84x subscribed, according to the data. The average move from initial price thoughts to pricing was 33.14bp tighter.
"Any concerns over waning demand in the primary market after Monday’s somewhat soft underlying metrics were allayed yesterday with outsized demand for the slate," BMO said in a report today.
Yesterday’s Bank of America deal pushes October bank issuance to US$39.5bn, BMO said.
"While more bank supply is likely, the pace of issuance is expected to slow as earnings releases fade into the rearview, providing an opportunity to look at October bank supply from a high level," BMO said.
Bank issuance in October has already surpassed historical norms given an average of US$35bn in bank supply in October between 2016 and 2023 and will likely end up in line with or above its expectations for the month of approximately US$42bn, BMO said.
GSIB supply of US$22.75bn exceeds the October average of US$20.3bn since 2016 with the potential for more, BMO said.
In the HY arena yesterday one issue was priced totaling US$500m, pushing weekly issuance to US$900m and October HY supply to US$13.635bn.
The average IG bond spread was unchanged at 85bp on Tuesday and the HY bond spread widened by 4bp to 292bp, according to ICE BofA data. Yields across asset classes were mixed yesterday.
"IG index spreads closed mostly unchanged yesterday after trading approximately 1.5bp wider early in the day as tone firmed over the course of the session," BMO said.
HIGH GRADE
The US investment-grade bond market is expected to draw at least one offering on Wednesday.
Annuity provider SBL Holdings announced a 10-year senior unsecured note transaction via leads Bank of America, Goldman Sachs and RBC. Bookrunners set IPTs at a lofty spread of US Treasuries plus 312.5bp–325bp.
On Tuesday, Bank of America raised US$3.5bn via a subordinated bond issue that will qualify as Tier 2 capital. The 11-year non-call 10 offering landed at Treasuries plus 132bp.
In the same session, Elevance Health sold a US$5.2bn senior unsecured offering that was split into six tranches, with maturities ranging from two to 40 years.
LEVERAGE/HIGH YIELD
After one high-yield bond priced on Tuesday, three more are slated for today.
Fitness firm Life Time printed an upsized US$500m offering of seven-year non-call three notes at 6% yesterday. Deutsche Bank was lead left on the deal.
Meanwhile, today’s business includes a US$500m five-year non-call two second-lien from DCLI, a US$475m five-year non-call two trade from Onity and a US$745m 7.25-year non-call three deal from California Buyer.
STRUCTURED FINANCE
Securitization primary activities are slated to step up today as some market participants have returned to the office from the ABS East conference in Miami.
Filings with the Securities and Exchange Commission show that several deals backed by a variety of assets will land after the three-day event.
Yesterday Freddie Mac priced a US$211.6m multifamily junior-lien securitization. The US$132m six-year tranche came in at US Treasuries plus 63bp.
Meanwhile, the annual ABS East gathering will wrap up today with panels on regulations, Basel capital rules and artificial intelligence for financial markets.
LATAM
Moody's upgraded Suriname by two notches on Tuesday to Caa1 from Caa3, changing its outlook to positive from stable. The ratings action reflects "the anticipated impact on Suriname's credit profile of major economic and fiscal windfalls associated to a major offshore oil project."
The World Bank is ready to loan Argentina over US$2bn for social protection, education and poverty alleviation, the head of the bank's Latin American and Caribbean division Carlos Felipe Jaramillo said yesterday on X, after holding a meeting with the country's minister of the economy Luis Caputo.
EQUITIES
Platinum Equity-backed IT distributor Ingram Micro appears headed toward an in-range pricing on its NYSE IPO after the market close Wednesday, an outcome not entirely unexpected given that nearly one fifth of the offering was spoken for at launch.
Morgan Stanley, Goldman Sachs and JP Morgan closed the books Tuesday at 4:00pm 12-times covered on the sale of 18.6m shares with pricing expected to come in the upper half of the US$20–$23 marketing range, the banks told investors this morning.
Capital World Investors committed upfront to invest US$70m to narrow the shares available to other investors to roughly 15m shares, depending on how much of the anchor is filled.
The banks highlighted high-quality demand from long-only institutional investors who met face-to-face with Ingram management.
Ingram Micro is scheduled to debut Thursday on the NYSE under the ticker “INGM”.
Septerna closes the books on its up to US$185.9m Nasdaq IPO on Wednesday at 4:00pm, a full day ahead of pricing and a Friday market debut.
JP Morgan, TD Cowen, Cantor and Wells Fargo told investors they are multiple times covered on the all-primary offering of 10.9m shares and there is no price sensitivity within the US$15-$17 marketing range.
The biotech is using money from the IPO to finish a Phase I trial on a lead drug to treat hypoparathyroidism, a rare disease that causes low calcium levels in the bloodstream.
Broader ECM activity is limited this week due to earnings blackouts, though some deals are trickling through.
ProQR Therapeutics secured an upsized US$75m from an overnight stock sale and concurrent private placement to help reboot its RNA gene editing platform.
Evercore, Cantor, Raymond James and Oppenheimer priced 18m shares at a US$3.50, a 7.4% discount to Tuesday’s closing price of US$3.78. Collaborative partner Eli Lilly invested another US$12m through a concurrent private placement.
The Dutch biotech had sought to raise US$50m from the public stock sale after confidentially marketing the financing to investors.
ProQR separately put in place a new at-the-market program that allows it to sell up to US$75m of stock on the open market.
China's UP Fintech also raised US$94m late Tuesday from a follow-on offering of American depositary receipts after a day of marketing.
Known as “Tiger Brokers” in Asia, the company sold 15m ADRs at US$6.25 each or a discount of 3.1% to Tuesday’s close of US$6.45.
Deutsche Bank, CICC and US Tiger Securities were the joint bookrunners.