The US investment-grade primary is keeping the supply train running with at least another 12 offerings pricing today, following one of its busiest days ever with 24 issues.
Last week, the IG primary kicked off the new year with 12 issues totaling US$16bn, all sold in two days.
The US high-yield primary expects its first offering of the year to price today.
The economic calendar today offers some key data releases ahead of the jobs report on Friday, including the November international trade report and ISM Services PMI.
On Monday, the IG primary saw 24 issues priced, the second busiest day on record for number of offerings, totaling US$38.45bn, and lifting January IG issuance to $54.5bn in the first three market sessions of the year, according to IFR data. The average new issue concession for the IG deals on Monday was 3.12bp and the average order book was 2.56x subscribed, according to the data. The average move from initial price thoughts to pricing was 19.38bp tighter.
No issues were priced yesterday in the HY primary.
The average IG bond spread edged out 1bp to 84bp on Monday and the HY bond spread narrowed by 5bp to 276bp, according to ICE BofA data. US yields across asset classes were mixed on Monday.
HIGH GRADE
The pace of US investment-grade bond issuance is set to slow down from Monday's torrent of 24 deals, but the market is still expected to draw at least 12 bond offerings on Tuesday
Insurers Protective Life, Global Atlantic and MetLife are issuing funding agreement-backed notes. Elsewhere, oil driller APA is marketing 10 and 30-year senior unsecured notes to fund a tender offer for up to US$1bn. Leads set IPTs for the offering at Treasuries plus 180bp area and 215bp area, respectively.
Private-credit lender HPS Corporate Lending Fund is issuing three and seven-year senior unsecured notes, while utility Boston Gas is selling a US$500m 10-year senior note.
Another round of Yankee deals is expected on Tuesday. European banks Banco Santander and BPCE are raising funding via offerings of senior non-preferred bonds. UK lender Standard Chartered is issuing a US dollar Additional Tier 1 offering, making it among the first banks to raise deeply subordinated bank capital in the Yankee market this year.
Sumitomo Mitsui Financial Group is marketing a four-part senior unsecured transaction. Japanese insurer Dai-ichi Life Insurance is marketing a perpetual non-call 10 subordinated bond.
Today's supply also includes a five-part senior bond offering from Daimler Truck's US financing subsidiary.
LEVERAGE/HIGH YIELD
The US primary market for junk bonds is seeing some signs of life as borrowers begin to come off the sidelines at the start of the new year.
Norwegian Cruise Line is expected to price a sizeable US$1.8bn seven-year non-call three offering today as it seeks to refinance bonds falling due in 2026 and 2028.
Kimmeridge Texas Gas also joined the pipeline yesterday when it announced a US$450m five-year non-call two issue. Roadshows will end tomorrow.
The company will use proceeds to repay borrowings under a credit facility and for general corporate purposes.
STRUCTURED FINANCE
Activity in the securitization primary is stepping up amid a growing wave of supply at the start of 2025.
General Motors yesterday started marketing a US$1.29bn prime car loan deal, leading a heavy calendar of auto issues that will hit the market in the coming days. Other auto issuers in the pipeline include benchmark names such as Mercedes-Benz, Hyundai, Nissan, Santander and Westlake.
As for RMBS supply, Pretium Partners is showing investors a US$567.8m single-family rental securitization that is expected to price this week.
In the CMBS sector, a group of lenders led by Wells Fargo is in the market with a US$722m five-year conduit offering.
LATAM
Chile is expected to price SEC-registered dollar and euro-denominated notes today.
BNP Paribas, Citigroup, HSBC and JP Morgan have opened price thoughts for the 12-year dollar senior note in the 137.5bp area over US Treasuries. They have also launched a €1.6bn seven-year social note at 140bp over mid-swaps with books over €6.9bn, after opening price thoughts in the 175bp area.
The IDB is expected to price a dollar-denominated five-year global sustainable development bond tomorrow, with Bank of America, BMO, Citigroup and Wells Fargo leading the transaction. Initial price thoughts are in the 45bp area over SOFR mid-swaps.
Mexico yesterday raised US$2bn from a 6% five-year note, US$4bn from a 6.875% 12-year note and US$2.5bn from a 7.375% 30-year note. The notes were respectively priced at yields of 6.124%, 6.926% and 7.408%.
Also yesterday, JBS USA raised US$1bn from a 5.95% 10-year note that priced at a yield of 5.974%. It also raised US$750m from a 6.375% 30-year bond, which priced at 6.485%.
EQUITIES
Flowco early on Tuesday launched an NYSE IPO raising up to US$409m, putting it on track to price 2025’s first new issue.
JP Morgan, Jefferies and Piper Sandler lead a syndicate of nine banks marketing 17.8m Class A shares in the Houston-based oilfield services firm at US$21-$23 for pricing on Wednesday, January 15.
Flowco, which operates a fleet of production optimization, artificial lift and methane abatement systems used in the oil and gas industry, would command a market cap of roughly US$2bn at the top of the range.
The IPO is backed by US$125m of upfront cornerstone demand from BlackRock and American Century Investment Management.
Flowco is using the bulk of the IPO proceeds to reduce debt.
US ECM is otherwise off to a quiet start to the year, not helped by the disruption to marketing schedules and issuance momentum posed by two federal holidays (this Thursday and on January 20) in the first month of the year.
Corrected story: Clarifies use of IPO proceeds by Flowco