The US investment-grade corporate primary expects a slate of seven offerings Monday, dominated by FIGs, as the Thanksgiving Day holiday approaches on Thursday, when US markets will be closed.
Among the FIG issuers today are Wells Fargo and Citigroup.
The high-yield primary is expecting one offering from Blackstone. The ECM arena remains active in a slowing primary with forward sales, follow-on sales and preparing IPOs.
Although it is a holiday-shortened week, there will be important economic data releases on the front end, including Tuesday’s Consumer Confidence Index and Wednesday’s durable goods, Personal Income and Outlays and October PCE reports. There are no Fed speakers scheduled for this week.
The Chicago Fed's National Activity Index and the Dallas Fed's Texas Manufacturing Sector Outlook Survey are the only data reports slated for release today.
No offerings were priced in the IG or HY primaries on Friday.
Last week in the IG primary, 25 deals in 46 tranches were priced totaling US$36.75bn, pushing November volume to 100 tranches totaling US$84.5bn, according to IFR data. The average new issue concession for the week was 1.60bp and the average order book was 3.76x subscribed, according to the data. The average progression from initial price thoughts to pricing for the week was 26.26bp tighter.
In the HY primary last week, seven tranches were priced totaling US$3.36bn, lifting November volume to 17 tranches totaling US$8.65bn, according to IFR.
The average IG bond spread edged in by 1bp to 80bp on Friday and the HY bond spread was unchanged at 261bp, according to ICE BofA data. US yields across asset classes edged out wider on Friday.
HIGH GRADE
At least seven issuers are expected to price investment-grade bonds on Monday.
Financial borrowers are out in full force today, with Citigroup marketing a perpetual non-call five preferred, Wells Fargo offering an 11-year non-call 10 fixed-to-floating rate note and ABN Amro Bank seeking investors for a three-part trade.
Also, Corebridge Financial is out with a five-year senior unsecured offering, while PNC Bank is marketing two-year notes in the fixed-to-floating and floating formats. And Golub Capital BDC is preparing a retap of its 6.00% senior unsecured notes due 2029.
Elsewhere, ConocoPhillips, the oil and gas giant, is in the market with a sale of fives, sevens, 10s, 30s and 40s whose proceeds will be used to fund a concurrent tender offer.
LEVERAGE/HIGH YIELD
Blackstone Mortgage Trust is the sole junk-rated issuer out of the gate on Monday in a shortened week for the US capital markets ahead of the Thanksgiving holiday on Thursday.
The mortgage REIT managed by an affiliate of the private equity firm has set initial price thoughts in the 8.25% area on a US$450m senior secured five-year non-call-life bond ahead of expected pricing today.
Proceeds from the bond and a loan will be used to refinance debt and for general corporate purposes.
STRUCTURED FINANCE
A few securitized offerings are slated to come to market ahead of the Thanksgiving holiday following a busy week in which issuers raised more than US$10bn.
Consumer services firm Continental Finance is in the market with a US$400m credit card deal. The US$217.4m double A rated three-year tranche has guidance of US Treasuries plus 180bp-190bp.
Another ABS issue that may land is a prime auto loan offering from Porsche, according to the carmaker's filing with the Securities and Exchange Commission on November 22.
In the RMBS sector, Balbec started marketing a US$308.7m non-performing mortgage offering for sale this week.
LATAM
This morning, Argentine company MSU Energy said it received US$243m of tenders from bondholders by the early deadline of its offer to exchange up to US$400m of its 6.875% senior notes due 2025 for new 9.75% senior secured notes due 2030.
The consummation of the exchange offer is conditioned on the completion of the concurrent offering of new 9.75% senior secured notes due 2030 raising at least US$134.7m. The offer is expected to price early this week, according to a person familiar with the transaction.
Citigroup, Itau, JP Morgan and Santander are the dealer managers on the exchange offer, while BBVA is acting as co-dealer manager.
EQUITIES
Midwestern regional bank Old National Bancorp fortified its balance sheet by raising US$400m from a pre-open stock sale, along with unveiling its plans to acquire St Paul, Minnesota-based Bremer Financial.
Citigroup and Keefe Bruyette & Woods priced the sale of 19m shares of Indiana-based Old National at US$21, a 3% discount versus Friday’s closing price of US$21.65. The banks structured the offering as a forward sale.
Old National revealed that it plans to pay US$1.4bn in stock to buy Bremer, adding US$16.2bn of assets and making the combination the third largest bank in the Twin Cities. The Otter Bremer Trust, a private charitable trust, will emerge with an 11% stake in Old National when the deal closes in the middle of next year.
Separately, Replimune launched a day of marketing to raise US$125m from a follow-on stock sale just days after applying for accelerated approval of its promising skin cancer drug as part of a combination therapy.
Leerink Partners is acting as sole bookrunner.
Shares of the late-stage cancer drug developer closed Friday at US$14.93.
Bankers are not expecting much other activity in ECM, aside from the two international IPOs that failed to price last week and will try to do so this week.
Pony.ai filed fresh paperwork early Monday to address more last-minute questions from the SEC about its US$260m Nasdaq IPO.
The Chinese autonomous driving technology firm is still looking to sell 20m shares at US$11-$13.
Goldman Sachs, Bank of America, Deutsche Bank and Huatai Securities are leading the offering.
Brazil Potash has slashed the size of its NYSE IPO in half after failing to price a larger deal last week.
The Canadian owner of potash-rich land in the Amazon basin refiled early Monday to sell 2.4m shares at US$15-$18 after failing to attract interest for a larger offering of 4.25m shares at the same valuation last week.