11th June, 2025

After a slow start to the week where only three borrowers came forward on Monday, combining to raise $2.25bln in ex-SSA issuance, in an effort to get out in front of the upcoming inflationary data, 10 issuers raised $10.4bln yesterday, led by a couple of chunky deals from foreign borrowers.

Lloyds Banking Group led the way, pricing a 3-pt $3bln offering of fixed and floating rate notes, while Australia and New Zealand Bank, through a like issue, raised $2.75bln. Both issues combined senior and subordinated securities. There was one other proposed 3-pt offering on today’s docket. Manufacturer’s and Trader’s Bank sold $1.5bln worth of fixed-to-floating rate notes, though a scheduled floater tranche was dropped at launch, the seventeenth such drop of the year.

However, this morning’s economic data and this afternoon’s 10yr Treasury auction just may keep any potential borrowers from tapping the high-grade primary market today. That’s not to say we haven’t seen issuers step forward after CPI releases, but more times than not that has been the case – there were no deals announced overnight.

As it stands right now, ex-SSA issuance amounts to $12.65bln this week, a week that even the most bearish of the respondents to our weekly issuance poll are looking for at least $15bln to price this week, while the average estimate came in at $23bln. Barring any late week, large offerings, it appears the highest weekly estimate of $30bln is out of the question.

Still, the $39.4bln in ex-SSA priced this far this month is way ahead of the month-to-date total ($35.325bln) priced last June. As a matter of fact, while it may seem like it, year-to-date this year’s ex-SSA issuance is running at a 3.7% faster pace than last year at this time ($845.986bln versus $815.509bln)

As for market conditions this morning ahead of the data release, futures are indicating a lower open for the three major indices, with the Dow set to give up all of yesterday’s 105-point gain, while the S&P500 (-20%) and the Nasdaq (-0.20%) appear to be headed lower.

With the trade talks with China front and center on the minds of investors and traders alike, not to mention the release of May CPI May CPI (m-o-m 0.2%. y-o-y 2.5%) and the Treasury auction, it appears the strategy so far this week has been to wait and see – reportedly, US and Chinese officials reached a consensus on trade after a second day of talks in London. As part of the framework, China would approve the exports of rare earth minerals, while, the US would roll back sales restrictions of advanced tech goods to China.

The same strategy seems to be being employed in the Treasury market, though yields are slightly lower. The benchmark 10yr note, now yielding 4.49%, is 2bp better on the week, while the long bond yield is flat. However, the 2yr note is 2bp higher on the week at 4.03%.

Corporate spreads were unchanged overnight with the average high-grade bond trading 87bp over comparable Treasuries. Credit spreads have tightened 18bp over the last month to their tightest level in three months, while Treasury yields have risen 20bp..

2025 HIGH GRADE ISSUANCE - 06/09 WEEK, JUNE & 2025 ESTIMATES

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2025 HIGH GRADE ISSUANCE - RECENT MANDATES

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2025 HIGH GRADE ISSUANCE - 06/10 PRICINGS

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