At least five bond offerings are expected to price in the US investment-grade primary market on Wednesday, as dealmakers modestly pick up the pace after three issuers, including Goldman Sachs, printed new trades yesterday.
Tuesday's trio of high-grade deals raised a combined US$13.25bn, mostly from Goldman's US$8.5bn haul, lifting January volume to US$151.95bn, according to IFR data.
The average new issue concession for the IG deals yesterday was 1bp and the average order book was 3.48x subscribed, according to the data. The average move from initial price thoughts to pricing was 24.08bp tighter.
In response to Tuesday's narrow concessions, BMO said this morning that "evidence is growing that demand metrics are improving over the course of January in-line with the seasonal pattern, lending additional rationale to the expectation that spreads can remain well anchored at very low levels in the weeks ahead."
The average IG bond spread remained unchanged at 82bp on Tuesday and the HY bond spread edged in by 3bp to 261bp, according to ICE BofA data. US yields across assets classes drifted lower yesterday.
"High grade spreads were unchanged or a touch narrower yesterday as risk sentiment remains strong with tariff action thus far falling short of expectations ahead of President Trump’s inauguration," BMO said in the report.
One high-yield bond priced yesterday, raising US$530m and pushing this month's issuance to US$7.655bn. The primary market for junk bonds is expected to be idle today.
The economic data calendar for Wednesday is showing just one report, the Conference Board's Leading Economic Index at 10:00am New York time. No Federal Reserve speakers are scheduled amid the blackout period ahead of next week's FOMC meeting.
HIGH GRADE
At least five US investment-grade bond offerings are expected to price Wednesday.
Utility Oglethorpe Power is marketing a US$350m 30-year first mortgage bond for green proceeds, with IPTs set at US Treasuries plus 145bp. In June, the utility issued an identical US$350m green bond.
Truck lessor Penske is issuing a five-year senior unsecured note. And super-regional bank PNC Financial Services is in the market with a two-part senior unsecured offering, split into six-year non-call five and 11-year non-call 10 fixed-to-floating notes.
Bank of Montreal is issuing a four-year non-call three bond in both fixed-to-floating and floating format.
Blackstone Private Credit Fund is selling a seven-year senior bond, resuscitating last week's pulled offering, which was withdrawn due to administrative delays at the US Securities and Exchange Commission.
LEVERAGE/HIGH YIELD
Junk-rated borrowers continue to trickle into the US primary market in what has been a relatively quiet week for the asset class.
Cobra AcquisitionCo has announced an up to US$50m add-on to its 12.25% 2029s ahead of expected pricing on Thursday.
Cobra is an indirect holding company of Exeter Finance, which offers dealership financing and subprime auto lending.
Proceeds are going to repay a portion of the outstanding balance on the company's warehouse facilities.
The 2029s were trading last week at a dollar price of 106.25 to yield 9.963%, according to MarketAxess data.
STRUCTURED FINANCE
Half a dozen asset-backed deals totaling over US$4bn are progressing toward pricing by the end of week.
Bank of Nova Scotia this morning launched its US$200m credit risk transfer deal backed by domestic prime auto loans. The Canadian bank enlarged the offering, which has a 1.49-year weighted-average life, from US$150m. The US$125m Aa1 rated tranche is expected to price at US Treasuries plus 85bp, tighter than the guidance range of plus 95bp-100bp.
Meanwhile, Toyota, World Omni, Exeter, Bridgecrest and Island Finance released guidance yesterday on their latest ABS offerings.
As for the CMBS market, dealmakers are ramping up supply after the annual CRE Finance Council conference in Miami last week.
Yesterday, a group of lenders led by Barclays announced a 10-year conduit issue backed by a US$999.7m portfolio of commercial mortgages, while Freddie Mac started marketing a US$630.5m five-year multifamily deal. Both issues are expected to price by the end of the week.
LATAM
Brazilian steel producer Usiminas is the latest borrower in a growing queue of LatAm corporates readying dollar bond deals to fund debt tenders.
The company has set initial price thoughts in the low 8% area on a seven-year non-call four bond to raise no more than US$500m. Pricing is expected later today.
Meanwhile, Mexican power company Saavi Energia, Peruvian electricity generator Kallpa and Colombian oil and gas firm GeoPark are also lining up bonds to fund debt tenders.
They join Latin American telecom infrastructure company ATP Tower Holdings and McDonald's franchisee Arcos Dorados, which are marketing bond offerings this week.
Elsewhere, regional development bank CAF is back in the market after its dollar deal last week, this time with a benchmark size 2030 bond to be denominated in British pounds. Pricing is expected on Thursday.
Also expected to join the pipeline is Pluspetrol, an E&P company that has operations in various countries in Latin America and has approved a US$1bn bond programme, according to a filing in Argentina.
In December, the company acquired key assets in the huge Vaca Muerta shale field in Argentina from Exxon, and a local analyst said the company is expected to issue bonds to cover financing for that purchase.
EQUITIES
Venture Global slashed the pricing range of its NYSE IPO by roughly 40% in response to heavy valuation pushback but still hopes to raise as much as US$1.9bn from the offering later this week.
The LNG exporter now plans to sell 70m shares at just US$23-$27, it revealed in a revised SEC filing early Wednesday, a dramatic overhaul from the original terms of 50m shares at US$40-$46.
At the midpoint of the range, the new terms represent a 42% cut in the asking price, a move that comes after investors balked at the company’s insistence that it deserved a significant valuation premium to close comp Cheniere Energy.
Nevertheless, the syndicate led by Goldman Sachs, JP Morgan and Bank of America told investors early Wednesday that the offering is now covered at the revised terms with the help of several anchor orders. They still expect to price the offering after the market closes on Thursday.
Venture Global is now raising up to US$1.9bn, down from US$2.3bn previously, at a market cap of up to US$72.5bn. The IPO represents only a sliver of the company at just 2.3% of shares outstanding.
The proceeds will help Venture Global complete a second LNG export terminal and begin building a third facility. While the company is exporting LNG from its first terminal via cargo vessels, it has yet to gain final regulatory approval that would obligate it to sell the commodity under long-term contracts.
Venture Global is one of several companies whose IPO is timed to benefit from the new Trump administration's efforts to boost US fossil fuels production.
Infinity Natural Resources, an exploration and production company focused on the natural gas-rich Appalachian Basin, launched a US$278.3m all-primary NYSE IPO early Tuesday to accelerate its drilling program.
Elsewhere, diabetes specialist Beta Bionics also launched its US$120m Nasdaq IPO early Wednesday, increasing the number of live IPOs in the market to six.
Bank of America, Piper Sandler and Leerink Partners are leading the sale of 7.5m shares of the insulin pump maker at US$14-$16 for pricing on Wednesday, January 29.
The medtech is targeting a market cap of up to US$616m. The terms represent a slight step-up from the US$13.79 mark struck on a US$60m Series E round last November.