The US investment-grade corporate primary expects four offerings to price on Thursday as the issuance pace slows down.
Over in the high-yield primary, just one offering is expected to price.
The ECM arena was hopping, with three Canadian transactions dominating: the first major Toronto stock exchange IPO in more than two years priced alongside two convertible bond sales late Wednesday.
The economic data calendar is busy today, with five reports due out including the Philly Fed manufacturing index and initial weekly jobless claims. Also today, four Fed officials will be speaking at various events.
On Wednesday, the IG primary saw nine issues priced initially totaling US$13.4bn, pushing issuance for the week to US$33.1bn, almost exceeding syndicate forecasts of US$20bn-$35bn for the week, and lifting November supply to US$80.9bn, according to IFR data.
However, later in the day after the news that senior Adani Group executives were facing bribery charges in the US, the Adani Green Energy US$600m senior secured bond offering that was priced earlier was pulled from the market, reducing yesterday's IG tally to eight deals totaling US$12.8bn for the day. The weekly total was cut to US$32.55bn and November IG volume was reduced to US$80.3bn.
The average new IG issue concession on Wednesday was 2.91bp and the average order book was 2.59x subscribed, according to the data. The average progression from initial price thoughts to pricing was 26.07bp tighter.
In the HY primary, one offering was priced totaling US$150m, pushing weekly volume to US$3bn and November issuance to US$8.29bn.
The average IG bond spread edged out by 1bp to 81bp on Wednesday and the HY bond spread tightened by 2bp to 267bp, according to ICE BofA data. US yields across asset classes were mixed to wider on Wednesday.
"High grade spreads widened 1bp during yesterday’s session that remained focused on the primary market," BMO said.
Bank of America Research said in a report late yesterday that "the major risks for 2024 are now behind us."
BofA noted that the US elections are over, the Federal Reserve has started its rate-cutting cycle, this is the last week of heavy IG supply and weekly inflows into IG funds have remained resilient.
"As a result, the environment now favors IG spreads grinding tighter into the year end," BofA said.
HIGH GRADE
At least four US investment-grade bond deals are expected to price on Thursday.
Oil and gas driller Expand Energy is issuing a 10-year senior unsecured note, while DT Midstream is printing a 10-year senior secured note, having last issued a high-grade bond in March 2022.
Brookfield Infrastructure Finance is issuing a US$300m junior subordinated note in a 30.25-year non-call five structure today.
US money-center bank JP Morgan is issuing a 21-year non-call 20 senior unsecured note.
LEVERAGE/HIGH YIELD
The pace of primary issuance in the US high-yield bond market is slowing a touch, with just one deal expected to price on Thursday.
RR Donnelley is readying pricing on a US$300m six-year bond with a payment-in-kind structure.
Sole lead JP Morgan has set price talk at 12% on the PIK and at 11% for the cash coupon with a reoffer price of 95.
Proceeds are being used for general corporate purposes, including debt refinancing.
STRUCTURED FINANCE
Dealmakers will resume pricing asset-backed deals following a pause yesterday.
At least one ABS deal is poised to price today. Buy-now-pay-later lender Affirm yesterday released price guidance on its latest consumer loan issue that is expected to raise US$698.9m. The US$534.4m Triple A rated money-market certificate is assessed at US Treasuries plus 90bp-95bp.
In addition to Affirm, data center operator Cloud Capital is seeking to bring in US$1.3bn with its first securitization, which is also a green bond, while fintech firm Upgrade is back with a US$299.1m consumer loan deal.
Since Monday, eight asset-backed issuers have raised US$7bn.
As for the commercial mortgage market, a lender group is seeking to price US$740.7m of five-year fixed-rate publicly offered notes by tomorrow.
Elsewhere, the RMBS sector has been active this week. Three deals from Annaly, Cerberus and Pretium raised over US$1bn yesterday, bringing the week's issuance to more than US$2bn.
LATAM
Honduras is expected to price a sustainable bond offering today. Initial price thoughts for the 10-year dollar-denominated bond are in the area of 9.125%. Citigroup and Santander are the bookrunners.
The sovereign issuer has published its Green, Social and Sustainable Thematic Bonds Framework, and it obtained a second party opinion on that framework from S&P on Tuesday.
Mexico-based telecom Sitios Latinoamerica yesterday raised US$650m with a 6% senior unsecured five-year bond. The notes priced at a yield of 6.08% or 180bp over US Treasuries.
Bank of America and Citigroup were global coordinators and joint bookrunners.
EQUITIES
Canadian ECM had its busiest night in recent memory, pricing the first major TSX IPO in more than two years alongside two convertible bond sales late Wednesday.
Groupe Dynamite secured in-range pricing from its C$300m TSX IPO, the first new issue from a non-REIT or royalty vehicle in over two years.
Goldman Sachs, BMO Capital Markets, RBC Capital Markets and TD Cowen led the all-secondary sale of 14.3m shares in the women’s clothing retailer at C$21 versus the C$19-$23 marketing range.
Groupe Dynamite is the third TSX new issue of 2024, following two small REIT IPOs, but ranks as the first corporate new issue since copper miner Ivanhoe Electric went public in June 2022, according to IFR data.
Dynamite shares will begin trading on the TSX on Thursday under the symbol “GRGD”.
Galaxy Digital tapped into the latest run of bitcoin euphoria in the US by raising US$350m from the upsized sale of an exchangeable bond at issuer-friendly terms.
The TSX-listed bitcoin miner priced the new five-year CB at a 2.5% coupon and a 37.5% conversion premium.
Jefferies earlier marketed a US$300m offering at 2.5%-3%, up 27.5%-32.5% through Tuesday’s session.
Galaxy shares closed TSX trading at C$22.44, putting the conversion price at C$33.30.
It is using the money to help fund construction of a new data center located in West Texas and to repay debt.
Silvercorp Metals, a TSX-listed mining company with mines in China, raised US$130m of funding as it pushes ahead with a new gold mine in Ecuador.
BMO Capital Markets and CLSA priced the miner’s five-year CB at a 4.75% coupon and a 30% premium, the middle of the 4.5%-5% and 27.5%-32.5% price talk.
Elsewhere, cracking the US IPO market is proving a challenge for international issuers.
Brazil Potash, a Canada-domiciled owner of potash-rich land in the Amazon basin, opted to extend marketing for a circa US$70m NYSE IPO on a day-to-day basis after failing to price late Wednesday.
Chinese robotaxi operator Pony.ai also had to delay its US listing through a US$260m Nasdaq IPO after pricing was held up by SEC regulators. The Goldman Sachs-led syndicate still expects to price the offering early next week.