USD Swaps: IG revs up ahead of Pfizer; Day to day

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Just under $15bn priced in IG supply ahead of the expected jumbo from Pfizer. USTs bear steepened. Traders see views limited to day to day.

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  • IG revs up ahead of Pfizer; Day to day

  • Zero-coupon callables and Formosas

  • New issues

     

    IG revs up ahead of Pfizer; Day to day

    The UST has bear steepened with the afternoon seeing more static price action. The 10y note yield is last 3.5bps higher at 3.498% while 2s10s is last 2.5bps higher at -50.5bps and 5s30s 3.14bps steeper at 38bps. Equities closed higher (DJIA +0.15%, S&P +0.22% and Nasdaq +0.65%). On the regional banking side, PacWest shares rebounded 12.8%.

     

    IG new issuance saw over a dozen issuers flood in advance of the upcoming Pfizer M&A jumbo that may come as soon as tomorrow, sources say. In total, $14.95bn priced – or already close to half of what is expected to price for the week.

     

    Swap spreads drifted lower with the back end seeing more tightening as the session wore on, amid below average  volumes best seen in the 3y bucket.

     

    With the direction of the markets seemingly pulling on one theme to the next, one trader was content to “trade day to day.” Meanwhile, looking at the front end, another trader pointed out that “rates have a long way to move if the Fed does not cut rates later this year. There is such a difference in views.”

     

    2s -9bps (-0.625bps), 3s -13.75bps (-0.5bps), 5s -21.375bps (-0.875bps), 7s -28.875bps (-0.875bps), 10s -29.625bps (-1bps), 20s -67.375bps (-0.875bps), 30s -73.375bps (-1.125bps).

     

    Zero-coupon callables and Formosas  

     

    • BNP Paribas sold a $50m 20y NC5 zero-coupon callable (non-Formosa). The EMTN matures May 2043, is callable every five years starting May 2028. IRR 5.08%. Self-led. Announced May 12.

     

    New issues  

    For a complete review of issuance over the past week, please see USD New Issues.

     

    • Pfizer has mandated BofA, Citi, Goldman and JPM to lead a multi-tranche USD-denominated bond issue in 2025, 2026, 2028, 2030, 2033, 2043, 2053 and 2063 maturities to help fund its $43bn purchase of Seagen.

       

    • CADES plans a USD benchmark 5y bond. Leads BNPP, Goldman, NatWest and SocGen. Aa2/AA. Price talk SOFR MS +47bps area. Expected to price tomorrow.

       

    • CoE Development Bank plans a $TBA 3y Social fixed.  Leads CACIB, MS, NatWest and Nomura. Aaa/AAA/AA+. Price talk SOFR MS +24bps. Expected to price tomorrow.

       

    • Japan International Cooperation Agency (JICA) plans a USD 5y Sustainable Bond. Leads Barclays, Citi, Daiwa and MS. A+. Price talk swaps +80bps. Expected to price tomorrow.

       

    • Saudi Arabia is working on a $TBA 2-part (6y and 10y). Leads Citi, JPM and StanChart. A1/A+. +80bps and +100bps.  

       

    • Tokyo Metropolitan Government has mandated Barclays, Goldman, Citi and MS to arrange investor chats from tomorrow ahead of a planned 3y to 5y USD bond issue.

       

    • Florida Power & Light launched a $2.5bn 4-part ($500m 3y, $750m 5y FMB, $500m 7y and $750m 10y). Leads BBVA, BMO, BofA, JPM, RBCCM, Santander and Scotia. Aa2/A+/AA-. +80bps, +95bps, +115bps, +130bps.

       

    • PacificCorp launched a $1.2bn 31y Green FMB. Leads BMO, PNC, SMBC, TD and WFC. A1/A+.  +165bps. 

       

    • Allstate launched a $600m $25 par preferred. Leads MS, BofA, JPM, Loop and WFS. Baa2/BBB. 7.375%.

       

    • Southern Co. priced a $1.5bn 2-part ($750m 5y and $750m 10y). Leads BofA, Barclays, MUFG, RBCCM, USB, WFS. Baa2/BBB. +143bps and +173bps.

       

    • Toyota Motor Credit priced a $2bn 3-part ($1bn 3y, $300m 3y FRN, and $700m 7y). Leads CACIB, JPM, MS, SocGen and TD. A1/A+/A+. +80bps, SOFR +89bps and +110bps.

       

    • Westpac priced a $1.75bn 5y Covered Bond. Leads HSBC, Lloyds, RBC, TorDom and Westpac. Aa3/AA-/A+. Mid swaps +92bps.

       

    • State Street priced a $2bn 2-part ($1bn 3y NC2 fixed and $1bn 11y NC10 fixed). Leads BofA, DB, GS and SAMRCO. A1/A/AA-.+110bps and +165bps.

       

    • FMC Corp priced a $1.5bn 3-part ($500m 3y, $500m 10y and $500m 30y). Leads BofA, Citi, SMBC and TD. Baa2/BBB-.  +150bps, +215bps and +255bps.

       

    • AES Corp priced a $900m 5y Green fixed. Leads Barclays and JPM. Baa3/BBB-/BBB-. +200bps.  

       

    • Weyerhaeuser priced a $750m 3y. Leads GS, JPM, MUFG, MS and Scotia. Baa2/BBB.  +120bps.

       

    • LKQ priced a $1.4bn 2-part ($800m 5y and $600m 10y). Leads BofA and WFS. Baa3/BBB-/BBB-. Price talk +235bps and 285bps.

       

    • Puget Sound Energy priced a $400m 30y Green FMB. Leads Barclays, JPM and Scotia. A2/A-/A. +160bps.  

       

    • Eaton Corp priced a $500m 5y. Leads BNPP, GS, JPM. A3/A-. +90bps.

       

    • National Fuel Gas priced a $300m 3y. Leads BofA, JPM, WFS. Baa3/BBB-/BBB. +190bps.

       

    • Poland’s BGK priced a $1.5bn 10y USD-denominated government-guaranteed COVID-19 Response Bond. Leads BNPP, Citi, ING, JPM and Santander. A2/A-. +190bps.

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