The US corporate bond primaries are quiet on Tuesday as the Thanksgiving holiday is almost here.
US stock and bond markets will be closed on Thursday for the holiday and reopen again on Friday, although bonds will have an early close at 2:00pm New York time.
The ECM arena remains active, with secondary stock sales and convertible bond offerings yesterday and today. And the US structured finance primary has a handful of issues crossing the line this week ahead of the holiday.
Seven economic data releases are expected today, including the Philadelphia Fed Nonmanufacturing Business Outlook Survey and the Conference Board's Consumer Confidence Index.
On Monday, seven IG offerings were priced totaling US$13.7bn, pushing November IG volume to US$98.2bn, according to IFR data, The average new issue concession on Monday was 3.73bp and the average order book was 3.14x subscribed, according to the data. The average progression from initial price thoughts to pricing yesterday was 22.64bp tighter.
In the HY primary, one issue was priced on Monday totaling US$450m, lifting November HY issuance to US$9.1bn.
The average IG bond spread was unchanged at 80bp on Monday and the HY bond spread widened by 3bp to 264bp, according to ICE BofA data. US yields across asset classes were tighter on Monday.
HIGH GRADE
The primary for investment-grade issuance could be in for an unusual no-deal day as market players in the US start departing for the Thanksgiving holiday on Thursday.
This comes after a fairly active start to the week on Monday, when seven borrowers raised US$13.7bn, including a US$5.2bn five-part deal from ConocoPhillips.
ConocoPhillips’ newly minted 5% 2035 was drifting lower in the secondary market this morning to change hands at 99.576 after pricing at 99.827 yesterday, according to MarketAxess data.
Elsewhere, Citigroup’s new perp non-call five was performing better, trading as high as 101.85 earlier this morning after pricing at par on Monday.
LEVERAGE/HIGH YIELD
The primary market for US junk bonds looks set for a quiet Tuesday amid some volatility following President-elect Donald Trump’s pledge to impose tariffs on Canada, China and Mexico.
This comes after Blackstone Mortgage Trust printed a US$450m senior secured five-year bond yesterday at par to yield 7.75%, tight to initial price thoughts in the 8.25% area.
The new bond has traded up on the break and was changing hands late yesterday at a dollar price of around 101.00, according to MarketAxess data.
The mortgage REIT is using proceeds from the bond and a loan to refinance debt and for general corporate purposes.
STRUCTURED FINANCE
Dealmakers are seeking to push the few securitized offerings on the docket across the finish line before Thanksgiving.
Yesterday Continental Finance priced its first credit card securitization since 2022. The consumer finance firm enlarged the offering to US$550m from US$400m. The US$298.9m three-year Double A rated tranche came in at US Treasuries plus 165bp, significantly tighter than guidance of plus 180bp-190bp.
Meanwhile, Balbec started marketing a US$308.7m nonperforming RMBS issue for expected sale by the end of the week.
LATAM
JP Morgan and Santander are arranging meetings with fixed income investors for a potential bond offering by Vista Energy Argentina.
Yesterday, Argentina's MSU Energy raised US$176.648m from a six-year non-call two note offering. The 9.75% senior secured notes due 2030 priced at a yield of 10%. Citigroup, Itau, JP Morgan and Santander were the bookrunners.
EQUITIES
Regional mall landlord Macerich capitalized on the sharp rebound in its stock price from post-pandemic depths to raise US$395m from an upsized overnight stock sale.
Late on Monday, a syndicate led by Goldman Sachs sold 20m Macerich shares at US$19.75, a 2.8% discount to Monday’s closing price of US$20.32.
The offering size was increased from 18m shares at launch.
The proceeds from the offering plus funds from an ATM will help repay a US$478m mortgage loan on which Macerich pays 9% interest. The loan is secured by the REIT’s Washington Square property in Portland, Oregon.
Macerich shares have more than doubled since October of last year, making equity issuance a less dilutive exercise.
Biotech Replimune tapped investors for US$140m from an upsized follow-on stock sale marketed across Monday’s session.
Leerink Partners priced the sale of 10.8m Replimune shares at US$13, a 13% file-to-offer discount.
Shares of the late-stage biotech soared 35% last Friday after it revealed plans to seek FDA approval for a promising treatment for skin cancer.
Astronics collected US$150m from the sale of a 5.25-year convertible bond to help repay some of its more expensive debt.
Following an earlier wall-cross, HSBC priced the CB at a 5.5% coupon and 30% conversion premium after marketing the offering overnight at 5%-5.5% and 25%-30%.
The aerospace and defense electronics supplier is using the money to help pay down US$181m of debt on which it pays an 8.2% annual interest rate.
Monday night’s offerings add to the US$400m that Old National Bancorp raised from a pre-open stock sale as it revealed its plans to acquire St Paul, Minnesota-based Bremer Financial.