The US investment-grade primary is quiet on Thursday, while the high-yield primary expects five issues to price.
The LatAm corporate primary is looking busy today, with a handful of offerings lining up, including Telecom Argentina.
Over in ECM, the Boeing saga continued to unfold in the wake of the union vote last night and the rejection of the tentative contract agreement reached over the weekend. A financing package that might have come today is now in limbo. Reuters reported today that JP Morgan analyst Seth Seifman said in a note after the vote that the bank would not rule out a capital raise before the strike ends, depending on market conditions.
Coming on top of back-to-back crises over safety, quality and an industry-wide shortage of parts and labor, Reuters reported, the vote on Boeing's first major strike in 16 years overshadowed a US$6bn loss for the third quarter, also announced on Wednesday.
It is a busy day for economic data on Thursday, starting with jobless claims this morning, which came in lower than expected as the impact of the hurricanes on jobs recedes. Also, the Chicago Fed National Activity Index dropped to -0.28 in September.
"On net, it was a mixed round of data that has had little if any bearing on the resilient economy assumption," BMO said in a report today.
Before the data, US Treasuries were rallying in a move that brought 10-year yields back below 4.20%, BMO said. "Since the data hit the tapes, the bid has been partially reversed with benchmark rates back above 4.20% although the bulk of today's gains remain intact."
The IG primary saw one offering priced totaling US$650m, lifting weekly IG issuance to US$12.1bn and October volume to US$67.55bn, according to IFR data.
BMO said high-grade volume expectations for the week were US$21bn-$22bn.
Despite a better risk tone this morning, which may spur supply, the week nevertheless seems assured to fall short of expectations for the second consecutive week, BMO said.
"If so, it will be the first time this year that has happened," BMO said.
In the HY primary, four issues were priced totaling US$1.945bn, pushing weekly volume to US$2.845bn and October issuance to US$15.58bn, according to IFR data.
The average IG bond spread edged out by 1bp to 86bp on Wednesday and the HY bond spread widened by 2bp to 771bp, according to ICE BofA data.
"High grade spreads widened as much as 1bp at the index level during yesterday’s session as risk sentiment faded over the course of the session," BMO said.
HIGH GRADE
No new high-grade bond offerings are expected today, as the primary market stays sleepy.
Yesterday, only one deal priced, from annuities provider SBL Holdings, which raised US$650m from a 10-year senior note transaction, landing it at Treasuries plus 300bp.
LEVERAGE/HIGH YIELD
The primary market for US high-yield bonds is likely to see another busy day on Thursday, with up to four issuers expected to price deals today.
Constellation Oil Services has set initial price thoughts of 9.75% area on a US$650m five-year non-call two offering to refinance debt.
Raven Acquisition Holdings, which does business as R1 RCM, is also out with price talk of 7.00%-7.25% on its US$1bn seven-year non-call three offering.
The senior secured deal is part of a bigger financing package to fund the acquisition of the healthcare technology company by TowerBrook Capital and Clayton Dubilier & Rice.
Rise Baking is also talking 8.75%-9.00% on a seven-year non-call three note that has been upsized to US$900m from US$650m. Proceeds will help fund a US$2bn acquisition of the company by Platinum Equity and Butterfly Equity.
Also on the pricing roster today are investment and insurance firm Aquarian Holdings, with a US$700m five-year non-call two unsecured note, and Aris Mining, which has announced price talk of 8.25%-8.50% on a US$400m five-year non-call two bond.
While both Aris Mining and Constellation Oil Services are being run off high-yield syndicate desks, they largely operate in Latin America and hence are being included as LatAm bond offerings as well.
STRUCTURED FINANCE
Securitization dealmakers are expected to turn up primary activity after the ABS East industry conference ended yesterday.
Supply across asset classes for sale in the coming days continues to grow. Flagship and Blue Stream yesterday started marketing their latest asset-backed deals.
In the CMBS market, there are at least two offerings slated to price this week: a US$724m 10-year conduit deal from a BMO-led group and a US$755m green bond from Blackstone.
As for the RMBS sector, two deals cleared yesterday: a US$347.6m prime jumbo securitization from Citigroup and a US$602m reverse mortgage issue from Waterfall.
LATAM
Telecom Argentina is expected to price today an add-on to its 9.5% senior unsecured notes maturing in 2031. Price thoughts are in the 9% area. Deutsche Bank and JP Morgan are the bookrunners.
Also out of Argentina today, Generacion Mediterranea/Central Termica Roca is expected to price a seven-year note. Price thoughts are in the low to mid 11% area. Citigroup, JP Morgan and Santander are the bookrunners.
Constellation Oil Services, a provider of drilling services for onshore and offshore oil wells in Brazil, announced that it will price today a US$650m five-year non-call two senior secured note. JP Morgan and Clarksons Securities are the global coordinators.
Mexico's Nueva Elektra opened price thoughts in the mid 12% area for a senior secured seven-year amortizing bond with an an average life of 4.6 years. Pricing is expected to occur on Friday. BCP Securities and Jefferies are the global coordinators.
EQUITIES
Boeing machinists rejected a new contract proposal that would have ended a six-week labor dispute and may have cleared the way for the embattled aircraft maker to move forward with a planned US$10bn–$15bn equity raise.
Though some analysts believe Boeing could move ahead with the fundraising even with the strike unresolved, the open-ended cost remains a gating factor in Boeing’s plans to bolster its liquidity and pare debt to fend off credit ratings agency threats to cut its rating to junk.
As investors continue to patiently wait for Boeing’s landmark stock sale, IPOs are dominating the ECM landscape this week.
Ingram Micro priced its US$409.2m NYSE IPO late Wednesday, the latest in a recent revival in private equity-backed new issue product.
A syndicate led by Morgan Stanley, Goldman Sachs and JP Morgan sold 18.6m shares in the IT distributor at US$22, inside the US$20–$23 marketing range.
The syndicate closed the books 12-times covered after earlier telling accounts to expect the offering price in the upper half of the range.
Platinum Equity, which purchased Ingram for US$7.2bn via a secondary buyout in 2021, sold 7m shares in the base deal and will sell another 2.8m shares if the shoe is exercised.
Ingram shares will begin trading on the NYSE on Thursday under the symbol “INGM”.
Septerna made space for new investors by upping the size of its Nasdaq IPO to US$275m just ahead of pricing after the market closes on Thursday.
According to an amended filing, the early-stage biotech now expects to sell 15.3m shares at a fixed price of US$18.00, up from the original offering of 10.9m shares marketed at US$15-$17.
Despite the nearly 50% upsize, the offering remains more than 10 times covered.
JP Morgan, TD Cowen, Cantor and Wells Fargo are telling investors to expect their orders to get scaled back.
Two members of the 2024 IPO class returned to market with their first follow-ons, showing different approaches to sponsor monetization.
Bowhead Specialty sponsors harvested US$166m from a follow-on stock sale after banks agreed to early release from the IPO lock-up restrictions.
Backers of London-based trading firm Marex raised US$203.3m from a first-time follow-on priced alongside the expiration of lockups put in place for its Nasdaq IPO in April.