US stock markets are closed today as well as most government services in honor of a day of mourning for the late President Jimmy Carter.
Bond markets in the US are opened but have an early close at 2:00pm New York time. Most economic data releases originally slated for today were shifted to Wednesday, with only one, the Challenger Job Cuts report for December, out today. There are, however, a bevy of Fed speakers scheduled throughout the day.
No offerings are expected to price in the US investment-grade and high-yield primaries today.
For the rest of the week, the only significant economic data release is the US jobs report on Friday.
On Wednesday, five IG issues were priced totaling US$6.4bn, lifting weekly issuance to US$64.2bn and January volume to US$80.25bn, according to IFR data. The average new issue concession for the IG deals on Wednesday was 3.86bp and the average order book was 2.30x subscribed, according to the data. The average move from initial price thoughts to pricing was 26.07bp tighter.
"No further issuance is expected this week given an early close today and the employment report tomorrow," BMO said in a report today. "Nevertheless, with just three active sessions, this week becomes the largest week of supply in January ever, with the year off to the fastest start through the first full week of the year in history."
In the HY primary, one issue was priced totaling US$750m, pushing weekly and monthly HY issuance to US$3.3bn.
The average IG bond spread edged in by 1bp to 83bp on Wednesday and the HY bond spread gapped out by 5bp to 284bp, according to ICE BofA data. US yields across asset classes were mixed on Wednesday.
"High grade spreads were unchanged or modestly narrower at the index level yesterday in a session headlined by the release of the Minutes of the Fed’s December meeting," BMO said. "The Minutes offered very little in the way of surprising content, with the FOMC delivering on expectations for a balanced outlook regarding the risk to the Fed’s dual mandate."
HIGH GRADE
Market participants in the US investment-grade bond market will have a breather from the torrent of supply that arrived in previous sessions. No fresh deals are expected to price on Thursday.
A total of five deals priced on Wednesday. Of those offerings, Deutsche Bank priced the largest deal. The German lender raised US$1.75bn from a senior non-preferred offering split into a US$1.25bn four-year non-call three fixed-to-floating tranche and a US$500m four-year floater.
HF Sinclair issued its first bond under its current entity, which was formed in 2021 through the combination of HollyFrontier and some of Sinclair's oil assets. The energy company printed a US$1.4bn two-part senior unsecured notes.
LEVERAGE/HIGH YIELD
The primary market for US junk bond issuance is set for a quiet day, with no new deal announcements as of early morning.
Novelis hit the market yesterday with a five-year non-call two bond, which was upsized to US$750m from US$500m and landed at par to yield 6.875%
Pricing came at the midpoint of talk of 6.75%-7%, but tight to initial thoughts of 7% to low 7%. The bond drifted higher on the break to trade late yesterday at 100.50, according to MarketAxess data.
The aluminum products producer is using proceeds to repay borrowings under a revolver and for general corporate purposes.
STRUCTURED FINANCE
The securitization primary is in full swing as the supply pipeline fills up with deals for sale in the coming days.
Most of the upcoming asset-backed offerings are slated to land next week, with at least US$6bn set for pricing.
As for remainder this week, at least two more issues are poised to be completed: a US$1.5bn prime auto securitization from General Motors and a US$301.2m consumer loan offering from Oportun.
Yesterday, Toronto-Dominion placed US$162.6m of US dollar-denominated securities to offload default risk on a portfolio of Canadian dollar credit card receivables.
In the CMBS market, a group of lenders led by Wells Fargo is seeking to price a US$$722m five-year conduit deal by Friday, while ACRE Credit is looking to sell a US$958.4m CRE CLO deal.
As for the RMBS sector, at least three offerings expected to price by tomorrow: a US$299.6m non-QM deal from Lone Star, a US$556.4m non-QM offering from Annaly and a US$567.8m single-family rental securitization from Pretium.
LATAM
Argentina's oil and gas producer YPF raised US$1.1bn from an 8.25% nine-year non-call four senior unsecured note yesterday. The note priced at a yield of 8.5%.
Deutsche Bank, BBVA, Itau and Santander were the bookrunners.
Also yesterday, Chile's state-owned copper miner Codelco raised US$1.5bn from a two-part offering. The US$750m 6.33% 10-year notes priced at a yield of 6.335%, or 165bp over US Treasuries, while the US$750m 6.78% 30-year note priced at a yield of 6.783%, or 185bp over.
Bank of America, Citigroup, JP Morgan and Santander were joint bookrunners on the deal.
EQUITIES
US ECM activity is on hold in observance of Thursday’s National Day of Mourning for former US President Jimmy Carter.
In addition to the federal holiday, a recent back-up in market interest rates and the uneven performance of growth stocks of late have frustrated hopes for a quick restart to ECM activity.
Just two stock sales have priced so far in 2025, from Kimbell Royalty Partners (US$149m) and UniQure (US$75m). But with the SEC and both major stock exchanges closed today, it would have been difficult for banks to schedule and price more offerings midweek.
Still, one IPO is on the road and on track to price next week, the US$409m NYSE IPO of oilfield services firm Flowco.
Looking further ahead, bankers widely expect the next big IPO to launch will be a potential multi-billion-dollar debut of LNG project developer Venture Global.