USD New Issues: Upended markets after bank collapses/deposit runs

Crisis chart very red 26 May 2022
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The IG new issuance market has been upended and shuttered in the wake of SVB’s collapse and subsequent liquidity backstop by Fed/Treasury.

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  • Upended markets after bank collapses/deposit runs

  • New issues

  • Recent issues

     

    Upended markets after bank collapses/deposit runs  

    The IG new issuance market has been upended along with the broader markets in the wake of SVB’s collapse (and subsequently Signature Bank) - and a swift reversal from the initial indications by the Fed/Treasury/FDIC to now backstop of all deposits via the newly created Bank Term Funding Program last night. With the 2y yield 95bps lower from the 5% level reached last week, and 53bps lower just today, USTs have been caught in the conflagration and aftermath of the very basic bank run on deposits.    

     

    Needless to say, IG corporate spreads are wider, with Friday’s close (before the ultimate collapse of SVB) seeing spreads 12bps wider to 137bps, week over week, while high yield spreads wider by 56bps to 461bps, according to the ICE BofA Masters indexes.

     

    As for the potential for IG new supply this week, the prognostications are up in the air, with a standard $25bn placeholder - a guess dependent on the resumption of some normalization in the markets. Last week, a total of $39.28bn priced (ex-SSA), topping expectations of around $35bn. Month to date for March currently stands at $55.27bn.

     

     

    Recent issues

     

    • Mar 9: OCI priced a $600m 10y benchmark. Leads MUFG, BofA and JPM.  Baa3/BBB-.  +280bps.

       

    • Mar 9: AEP Transmission priced a $700m 30y benchmark. Leads Scotia, BNYM, CS, MS and TSI.  A2/A-/A.  +157bps.

       

    • Mar 9: Kentucky Utilities priced an upsized $400m 10y FMB. Leads WFS, GS, MUFG and TSI.  A1/A. Upsized from $300m. +155bps.

       

    • Mar 9: Louisville Gas & Electric priced an upsized $400m 10y FMB. Leads WFS, GS, MUFG and TSI.  A1/A.  Upsized from $300m. +155bps.

       

    • Mar 9: Idaho Power priced an upsized $400m 30y. Leads JPM, USB and WFC.  A2/A-. Upsized from $350m. +170bps.

       

    • Mar 9: HSBC priced a $1.25bn 2y fixed benchmark.  A1/A-/A+. Self-led. +80bps. It dropped plans for a 2y FRN.

       

    • Mar 8: Kenvue priced a $7.5bn 8-part ($750m 2y, $750m 3y, $1bn 5y, $1bn 7y, $1.25bn 10y, $750m 20y, $1.5bn 30y and $750m 40y). Leads Citi, GS and JPM. A1/A.  +45bps, +60bps, +75bps, +85bps, +95bps, +100bps, +120bps, +135bps.

       

    • Mar 8: Popular priced a $400m 5y. Leads BofA, GS and MS.  Ba1/BB+/BBB-. +300bps.

       

    • Mar 8: System Energy Resources Inc. priced a $325m 5y FMB deal via MS and RBC. Baa1/A.  +255bps.

       

    • Mar 8: Bank of Sharjah (BBB+) priced a $500m5y. Leads ADCB, ABKGCO, Ca, ENBD, FAB, JPM (B&D) and MASHRQ.  +310bps

       

    • Mar 8: Private Export Funding priced an upsized $450m 2y. Leads BofA and Citizens.  Aaa/AA+. 5.52%. Upsized from $300m.

       

    • Mar 7: Texas Instruments priced a $1.4bn 2-part ($750m 10y and $650m 30y). Leads Barclays, BofA and MUFG.  Aa3/A+. +95bps, +115bps.

       

    • Mar 7: Caterpillar Financial priced a $60m 2y fixed. Leads BofA, Citi and MUFG.  A2/A/A. +40bps. It dropped plans for a 2y FRN.  

       

    • Mar 7: Magna International priced a $800m 2-part ($300m 3y NC1 and $500m 10y). Leads BofA, Citi and JPM.  A3/A-.  +125bps, +155bps.

       

    • Mar 7: TransCanada Pipelines priced a $1.25bn 2-part ($850m 3NC1 fixed and $400m 3y NC1 FRN). Leads BofA, CB and SMBC. +150bps and SOFR +152bps.

       

    • Mar 7: Nestle Holdings priced a $3bn 4-part ($1bn 3y, $850m 5y, $500m 7y and $650m 10y). Leads BNPP, BofA, Citi, HSBC and JPM.  Aa3/AA-. +55bps, +70bps, +80bps and +90bps.

       

    • Mar 7: CCDJ priced a $750m a 5y. Leads Barclays, Citi, GS, JPM and TD.  A1/A-/AA-.  +140bps.

       

    • Mar 7: HP Enterprise priced a $1.5bn 2-part ($1.1bn 1.5y and $400m 3y NC1 fixed). Leads HSBC, JPM and NatWest.  Baa2/BBB/BBB+.  +95bps and +140bps.

       

    • Mar 7: Evergy Kansas Central Inc. priced a $400m 30y FMB. Leads RF, TD, USB and WFS.  A2/A.  +185bps.

       

    • Mar 7: Harley-Davidson Financial priced a $700m 5y. Leads Barclays, GS and WFS.  Baa3/BBB-/BBB+. +225bps.

       

    • Mar 7: Islamic Development Bank priced a $2bn 5y Sukuk. Leads BNPP, Citi, BARWA, ENBD, HSBC, ISLDEV, SMBC Nikko, SocGen and StanChart (B&D). Aaa/AAA/AAA. SOFR MS +55bps.

       

    • Mar 7: African Development Bank (AfDB) priced a $2bn 5y. Leads Barclays, Credit Agricole, Deutsche, JPM and TorDom. Aaa/AAA/AA.  Swaps +33bps.

       

    • Mar 7: NIB priced a $1.5bn 5y Global. Leads BofA, BMO, Nomura and RBC. Aaa/AAA.HSBC and JPM. Mid swaps +30bps.

       

    • Mar 6: Avery Dennison priced an upsized $400m 10y. Baa2/BBB. +183bps. Upsized from $350m.

       

    • Mar 6: Rio Tinto Financial priced a $1.75bn 2-part ($650m 10y and $1.1bn 30y). Leads DB, JPM, Santander and SMBC. A2/A. +105bps and +130bps.  

       

    • Mar 6: Enbridge priced a $3bn 2-part ($700m 3y NC1 fixed and $2.3bn 10y SLB). Leads JPM, MS, Mizuho, SMBC and TSI. Baa1/BBB+/BBB+. +135bps and +173bps. 

       

    • Mar 6: Santander Holdings USA priced a $1bn 6y NC5 fixed to FRN. Leads Barclays, DB, RBC and Santander. Baa3/BBB+/BBB+. +223bps. 

       

    • Mar 6: Commonwealth Bank of Australia priced a $1.5bn 2-part ($1bn 3y fixed and $500m 3y FRN). Leads BofA, CBA, Citi, Goldman and JPM. Aa3/AA-/A+. +70bps and SOFR +75bps.

       

    • Mar 6: Lloyds Bank priced a $1.25bn perp NC7 AT1 sub. Leads BofA, Lloyds, MS (B&D), RBC and TorDom.  Baa3/BB-/BBB-. 8%.

       

    • Mar 6: Avnet priced a $500m 5y. Leads BofA, JPM, Scotia and TSI.  +205bps.

       

    • Mar 6: San Diego Gas & Electric priced a $800m 30y FMB fixed. Leads WFS, BofA, Barclays, BMO and Mizuho. A1/A/A.  +150bps.  

       

    • Mar 6: Mastercard priced a $1.5bn 2-part ($750m 5y and $750m 10y). Leads BofA, JPM. Lloyds, PNC and WFS. Aa3/A+. +62.5bps and +87.5bps.

       

    • Mar 6: Duke Energy Progress priced a $1bn 2-part ($500m 10y and $500m 30y). Leads Barclays, MUFG, PNC, RBCCM and USB. +128bps and +148bps.

       

    • Mar 6: Advanced Auto Parts priced a $600m 2-part ($300m 3y and $300m 5y). Leads JPM, BofA and TSI. Baa2/BBB-. +130bps and +170bps.

       

    • Mar 6: Ameriprise priced a $750m 10y. Leads GS, JPM and WFS. A3/A-/A-. +120bps.

       

    • Mar 6: Warnermedia Holdings priced a $1.5bn 3y NC1 fixed. Leads JPM, Mizuho, WFS. Baa3/BBB-/BBB-. +178bps   

       

    • Mar 6: Principal Financial priced a $700m 2-part ($400m 10y and $300m 30y). Leads Citi, BofA, HSBC and JPM. Baa1/A-/A-. +140bps and +160bps.

       

    • Mar 6: Marsh & McLennan priced a $600m 30y. Leads Barclays, HSBC and MS. Baa1/A-/A-. +157bps. 

       

    • < Mar 6: b>Air Lease Corp priced a $600m 144A Sukuk at USTs +185bps via Bank ABC and Dubai Islamic Bank. BBB/BBB.

     

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