The US investment-grade primary expects at least nine issues to price on Monday, with issuers front-loading their offerings as the US Thanksgiving Day holiday approaches.
The high-yield primary continues to be active as four deals were announced on Monday, with two of those offerings, from Nova Chemicals and Select Medical, expected to price today.
Meanwhile, in the ECM arena, time is running out for companies looking to issue IPOs and other equity-related financings as year-end approaches and the holiday season begins with Thanksgiving Day next week.
The economic reports slated for the week ahead do not offer any really game-changing data, but there will be a full menu of Fed speakers. On Monday, just one data report is due out, the National Association of Home Builders' Housing Market Index.
And Deutsche Bank Research said this morning that "just when you thought it was a good point to have a lie down after a busy few weeks, the biggest global earnings event happens after the bell on Wednesday with $3.48 trillion of market cap at stake" when Nvidia reports financial results.
"For context, the entire FTSE, DAX and CAC have a market cap of £2.08tn, €1.71tn and €2.31tn, respectively. So it's like a whole G7 country's stock markets reporting at exactly the same time," Deutsche Bank said.
No offerings were priced in the IG primary or the HY primary on Friday.
For last week, in the IG primary 51 tranches were priced totaling US$45.85bn, lifting November volume to 54 tranches totaling US$47.75bn, according to IFR data. The average new issue concession last week was 1.81bp and the average order book was 3.54x subscribed, according to the data. The average progression for the week from initial price thoughts to pricing was 27.48bp tighter.
After last week’s supply of IG offerings, which was the most weekly issuance sold since Labor Day week, market participants are expecting approximately US$29bn this week, BMO said in a report today.
And in the HY primary, nine tranches were priced last week totaling US$4.79bn, pushing November volume to 10 tranches totaling US$5.29bn.
The average IG bond spread was unchanged at 80bp on Friday and the HY bond spread widened by 12bp to 272bp, according to ICE BofA data. US yields across asset classes were mixed on Friday.
"IG index spreads were unchanged or modestly wider on Friday and 3-4bp wider for the week as a whole as Trump tailwinds faded," BMO said.
Deutsche Bank said, "Markets lost ground from their post-election surge as the week progressed, as concerns about inflation and a potential trade war dampened risk appetite."
HIGH GRADE
At least nine US investment-grade bond deals are expected to price on Monday.
Morgan Stanley is issuing an unusual long-dated 31-year non-call 30 senior unsecured note in a fixed-to-floating structure. EOG Resources is also raising funds today in the long end of the market with a 30-year bond.
Vulcan Materials is marketing a three-part bond that includes five, 10 and 30-year senior notes. Hyatt Hotels announced the sale of a new seven-year note and a tap of its 5.25% 2029 note.
Apollo Debt Solutions BDC is marketing a tap of its 6.7% 2031 notes. Truck lessor PACCAR Financial is looking to raise US$400m from a sale of a three-year senior bond.
General Mills is issuing a dual-tranche senior bond to help finance its purchase of Whitebridge's US pet foods business.
Sempra Energy is selling corporate hybrids in 30-year non-call five and 30-year non-call 10 wrappers. Wireless infrastructure REIT American Tower is issuing a two-part bond, comprising five and 10-year maturities.
LEVERAGE/HIGH YIELD
The US primary market for junk bonds is off to a steady start on Monday as four companies announce deals this morning to refinance debt.
On the pricing roster today are Select Medical, an operator of critical illness hospitals, and Canadian petrochemical company Nova Chemicals.
Select Medical is out with initial price thoughts of 6.25%-6.5% on an US$850m eight-year non-call three offering, while Nova is approaching investors with a US$400m seven-year non-call three bond.
Elsewhere, payments company Deluxe has announced IPTs in the 8.75% area on a US$400m five-year non-call two issue ahead of expected pricing on Tuesday.
European telecom provider Iliad Holding is also looking to raise up to US$1.47bn in the euro and dollar markets through a dual-tranche offering expected to price tomorrow.
STRUCTURED FINANCE
Primary action in the US asset-backed market is expected to pick up today as issuers rush to lock in funding ahead of month-end.
At least US$6.6bn of ABS supply has lined up for sale this week. The auto sector leads the way, with Ford, General Motors and Volkswagen readying their latest deals.
Other asset classes will also be active. Wireless carrier Verizon is in the market with a US$700m mobile payment offering, while fast-food chain Wingstop seeks to price a US$500m whole business securitization.
Last week, only one asset-backed issue landed – a US$295.5m prime auto debut from American Heritage Federal Credit Union.
LATAM
Mexico-based telecom Sitios Latinoamerica begins a virtual roadshow today for a senior unsecured dollar-denominated five-year bond offering. The roadshow ends tomorrow.
Bank of America and Citigroup are global coordinators and joint bookrunners.
On Friday afternoon, the government of Bahamas announced the final results of an offer to buy back six series of dollar-denominated notes maturing from 2028 to 2038, agreeing to pay tendering bondholders a maximum consideration of US$215.7m. Standard Chartered was the dealer manager.
Also Friday, Fitch upgraded Argentina's long-term foreign-currency issuer default rating to CCC from CC on "improved ... confidence in the authorities' ability to make upcoming foreign-currency bond payments without seeking relief of some sort".
EQUITIES
Mara, the bitcoin miner formerly known as Marathon Digital, is taking advantage of the post-election run-up in bitcoin prices to raise US$700m from the sale of a new convertible bond, using the money both to repurchase an existing bond and to buy more of the cryptocurrency.
Leading what is shaping up as another active week of ECM issuance, JP Morgan and Barclays are marketing the new 5.25-year CB at a 0%-0.5% coupon and 40%-45% conversion premium.
The reference price on the CB will be based on a VWAP over the final two hours of trading Monday, ahead of pricing after the market close.
“Given how volatile this stock is, we want to provide investors the ability to hedge after allocations have been set,” one banker said.
"While bitcoin-related CBs have appealed to technical investors in the past, we are seeing greater interest from long-only investors who believe bitcoin has become mainstream.”
In marketing the CB, the banks are guiding accounts toward a credit spread and implied vol of S+500bp and 60, underpinning the extremely issuer-friendly (low cost, high premium) terms.
Mara’s CB can be put back to the company on December 1 2027.
Bitcoin prices have more than doubled this year, to more than US$90,000. Mara shares, which have realized more than 100 vol, have fallen 10.3% to US$21.07 this year as the company has struggled with the high costs of bitcoin mining.
In July, Mara, which owned 26,747 bitcoin at the end of September (now worth US$2.4bn), adopted a strategy of retaining all the bitcoin it mines.