After charging out of the block yesterday to start the year, the US investment-grade primary slowed its pace on Friday, with just two offerings slated for sale.
The high-yield primary is quiet today, as is the structured finance primary market.
In the US ECM arena, the funding window is expected to open next week. However, major US stock exchanges and federal offices will be closed on January 9 in observance of a National Day of Mourning for former President Jimmy Carter. US bond markets have an early close at 2:00pm New York time that day.
There is only one economic data release today, the December ISM Manufacturing PMI at 10:00am New York time.
The IG primary kicked off 2025 yesterday with 10 issues comprising 18 tranches priced totaling US$15.05bn, according to IFR data. The slate of offerings included two big US car manufacturers. The average new issue concession was 2.93bp for yesterday's deals and the average order book cover was 2.40x subscribed, according to the data. The average move from initial price thoughts to pricing was 24.83bp tighter.
The HY primary was idle yesterday.
The average IG bond spread edged out 1bp to 83bp on Thursday and the HY bond spread tightened by 4bp to 288bp, according to ICE BofA data. US yields across asset classes edged lower.
For the week ended January 1, Lipper US Fund Flows reported that the all short-intermediate investment-grade debt funds/ETFs net outflow was US$644.29m and the all corporate high-yield debt funds/ETFs net outflow was US$396.23m. The all domestic equity funds/ETFs net inflow was US$2.943bn and the all non-domestic equity funds/ETFs net outflow was US$1.589bn.
HIGH GRADE
The US investment-grade bond market is getting a pair of deals today as issuers look to get ahead of next week's wave of expected supply.
MassMutual is marketing a five-year funding agreement-backed note at IPTs in the 75bp area over Treasuries, while Sammons Financial is selling a three-year FA-backed note at IPTs of 100bp area.
A busy pipeline is building up for next week. F&G Annuities & Life is holding investor calls today for a junior subordinated transaction in US$25 par format. And private-credit lender HPS Corporate Lending Funding is planning investor calls on Monday for a potential transaction.
LEVERAGE/HIGH YIELD
The US primary market for junk bonds looks set for a quiet day ahead of what is expected to be a busy January.
In the secondary, bonds issued by media company iHeart continue to enjoy some active trading this morning.
The company's 7% 2026 was trading higher this morning at a dollar price of 76, up from 75.40 yesterday afternoon, according to MarketAxess data.
The 5.125% 2042 issued by retailer Macy's also seems to be catching a bid after changing hands earlier this morning at 77.512, a good two points higher than where it was trading yesterday afternoon.
STRUCTURED FINANCE
The securitization primary will remain quiet today as issuers prepare to bring deals to the market next week, market participants said.
In asset-backed sector, auto finance firm Global Lending Services filed yesterday with the Securities and Exchange Commission for its first subprime loan offering of 2025. It will join General Motors and Oportun in raising funds from ABS investors at the start of the new year.
In the CMBS market, ACRE Credit is readying its first CRE CLO issue since 2023, according to the real estate private equity firm's SEC filing yesterday.
Elsewhere, the RMBS sector is gearing for fresh residential mortgage securitizations from Invictus, Redwood and Annaly.
LATAM
The primary market for hard currency bonds from Latin American issuers remains quiet on Friday but activity should pick up in what is typically a busy month for the asset class.
Meanwhile, it looks as if YPF is preparing a debt deal for this month after Fitch assigned a CCC rating today for a benchmark-sized unsecured bond from the Argentine oil company.
Proceeds from the offering will be used to repay debt and for general corporate purposes, according to the rating agency.
The company launched a tender offer yesterday for US$757m of its outstanding 8.5% 2025s. It is offering to repurchase the bonds at a dollar price of 101.95.
YPF's 8.75% 2031s were trading late last month at a dollar price of around 103.00 after pricing in September at par, according to MarketAxess data.
EQUITIES
US stocks started 2025 with a modest decline, but expectations remain high that the IPO market and broader ECM will be active this year given that equity markets closed last year near record highs.
The S&P 500 fell 0.2% in Thursday’s session, the year’s first, giving back some of the equity benchmark's impressive 23.3% gain in 2024. With investors and bankers still trekking back from holidays, no companies of note have yet stepped up to raise capital.
The funding window is expected to open next week, though the state funeral for former President Jimmy Carter on Thursday may disrupt the timing of some companies' funding plans.
Major US stock exchanges and federal offices, including the SEC, will be closed on January 9 in observance of a National Day of Mourning.
Limited filing activity points to few IPO launches near term in any case, though LNG exporter Venture Global’s public filing on December 20 puts it on track to debut as early as this month.