Another active day in the IG primary ahead for this Tuesday, with seven offerings expected to price, including a Boeing five-parter.
Monday set the tone with seven deals totaling US$6.700bn. So far in April, IG volume as of Monday was US$82.850bn. Today’s slate of offerings could push monthly volume close to or beyond the April forecast of US$85bn-$90bn.
HIGH GRADE
Boeing is looking to issue new debt for the first time since its 737 Max aircraft were grounded in March.
Boeing is shopping three, seven, 15 and 30-year tranches as well as a tap of its 3.2% 2029 maturity.
Although average investment-grade spreads have continued to tighten since the company last came to the bond market on February 13, Boeing bonds have widened on the back of its aircraft woes.
Ford is planning to sell a 10-year, fixed-rate US benchmark senior unsecured note for general corporate purposes.
Textron Inc is aiming to sell a US$300m 10-year fixed-rate senior unsecured note for general corporate purposes with IPTs set at T+170 area.
Barclays is out with six-year no call five-year fixed to floating rate notes with initial price thoughts of 180bp plus Treasuries.
Its the latest FIG to follow on JP Morgan’s US$2.5bn bond, it priced at 117bp over Treasuries on Monday.
Other issuers in the market include Houston-based energy company Boardwalk Pipelines, retirement and health counseling company AON and Chicago-based bank Northern Trust.
In the secondary, GE bonds are rallying by as much as 20bp on the back of earnings that beat expectations.
The company’s 4.5% 2044 was trading at 204bp over Treasuries Tuesday morning, furthering tightening in from the 224bp level on Monday.
HIGH YIELD
The primary market is set for a relatively busy week by number of deals with companies from a wide range of sectors looking to refinance debt after reporting earnings.
Of note is a sizeable dual-currency US$2.8bn-equivalent eight-year non-call three year issue for cable and telecoms company Altice in euros and US dollars.
The company signaled in an earnings call in March that it was looking at a possible refinancing of its Altice Luxembourg holdco bonds. The new issue, expected to be rated Caa1/B-, will refinance its 2022 bonds which become callable in May.
The roadshow, expected to be at least three days long, begins today in London. The company has a large debt pile of almost US$15bn and sold a new loan in February to part refinance a 10.125% bond maturing 2023.
There’s some large moves in secondary also. Satellite company Intelsat’s bonds were among the most actively traded, and were down by up to 2.5 points after the company reported earnings.
PetSmart bonds, meanwhile, steadied after a strong rally on Monday after the company announced a planned IPO of its online Chewy business. nL1N22B1EH
STRUCTURED FINANCE
The market is ready for an active week in auto ABS sales with a slew of such deals lining up for pricing over the coming days.
Fifth Third Bancorp and Toyota Motor Corp are out with guidance on prime auto ABS deals, while Global Lending Services has released talk on a subprime auto trade.
General Motors Leasing is also readying a US$1.25bn issue backed by auto leases. All four deals are expected to price today, along with an RMBS from Freddie Mac STACR.
Strong demand for high quality ABS paper has been helping to tighten spreads in this space, and issuers have taken note of the buoyant funding conditions.
Average two-year Triple A prime auto ABS spreads narrowed by 6bp last week to 15bp over swaps, according to JP Morgan analysts.
Double B rated subprime auto ABS indicative spreads, meanwhile, stand at 195bp over interpolated swaps, the tightest level recorded since the bank started tracking the series in 2010, analysts said.
One ABS investor said that fixed income buyers were showing more interest in the relative value on offer in high quality ABS paper, after a strong rally in corporate credit since the end of last year.
LATAM
A quiet day is expected today ahead of May Day holiday in London and Labor Day celebrations in Mexico, Brazil, Chile, and Peru.
Deals due to come to the market later this week include Chilean corporate Sociedad Quimica y Minera (SQM) and Brazil-based food processor Marfrig.
Both issuers will wrap investor meetings by Wednesday, and price deals on Thursday or Friday.
Elsewhere, PDVSA is expected to keep current with its 2020s bond payment due April 27, according to an investor in the securities. The payment will undergo discussion by lawmakers as soon as today, but has been authorized by the opposition-backed National Assembly’s finance committee.
“(It) is payable today (April 29), but the plenary session of the National Assembly still needs to approve it,” said the holder of the 2020. “This should be a formality.”
EQUITIES
The US IPO market is wide open.
Two more companies committed to taking the IPO plunge this morning, putting 19 deals on the road for pricing over the next two weeks.
Beyond Meat, the plant-based meat producer, is leading the charge for this week’s clutch of seven IPOs.
With full day left before pricing, Beyond Meat this morning both increased the size and valuation of its IPO.
Beyond Meat is now selling 9.63m shares at US$23-$25 apiece, versus the US$19-$21 original range on a deal sized at 8.75m shares.
Goldman Sachs, JP Morgan and Credit Suisse are on track for pricing after the market close tomorrow.
Biotech Axcella Health and Postal Realty Trust, a REIT comprised of US post offices, launched their IPOs this morning.
Axcella is seeking to raise up to US$78m IPO via a syndicate led by Goldman Sachs, JP Morgan and SVB Leerink for pricing Wednesday, May 8.
Postal Realty Trust has Stifel, Janney Montgomery Scott, BMO Capital Markets and Height Capital Markets marketing 5m shares at US$19-$21 each for pricing on May 9.
Chewy, the online unit of leveraged-backed pet goods retailer PetSmart, filed preliminary IPO documents yesterday with a US$100m placeholder, though the primary and secondary share offering is more likely to be sized in the US$750m-$800m range.
Allen & Company, JP Morgan and Morgan Stanley (alphabetical) are joint bookrunners on the IPO.