[MORNING CALL:] One Down...

...How many more to go? Seven ex-SSA borrowers kicked off the week raising $18.7bln in the high grade primary market yesterday, led by JPMorgan who raised $9bln via a 4-pt offering of floating and fixed-to-floating rate debt. It was the bank s fourth trip to the market this year, bringing the total raised to $20.9bln, the most of any of the big six banks. But with Bank of America and Morgan Stanley, the last of the group, reporting their Q2 earnings results this morning, that could change in the blink of an eye.

Yesterday s deal ranks as the largest FIG offering of the year matching the $9bln the bank raised back in April JPM now owns the top three spots for FIGs this year and the sixth largest domestic ex-SSA deal of 2024. In terms of overall (SSA-inclusive) issuance, yesterday s deal ranks as number seven.

We were expecting Wells Fargo, who also reported earnings last Friday, to join JPM, but instead they chose to tap the euro market for E2.75bln via a 2-pt deal. That s not to say they couldn t dip their toes in the US market as well. While we were deprived of a WFC deal, JPM wasn t the only US bank in yesterday s docket.

While maybe not a big six bank, Bank of New York Mellon also tapped the market for $2.5bln via an offering similar to JPM s, though its 4-pt deal included a 15nc10 senior subordinated note tranche. Rounding out yesterday s line up were Royal Bank of Canada ($3.25bln 3-pt), PepsiCo ($2.25bln 3-pt), Brooklyn Union Gas ($600m 2-pt), Aircastle Ltd ($500m 7yr) and NongHyup Bank ($600m 2-pt).

As previously mentioned, combined, the seven deals raised a collective $18.7bln, more than half of the average estimate for the week ($35bln), making it the eleventh busiest ex-SSA issuance day of the year. That also brought ex-SSA issuance for the month to $42.3bln as we ve reached the halfway point of July. If you recall, on average, the Street was looking for $85bln in new issuance to price this month.

While there were no new deals announced overnight, now that all of the big six banks have reported earnings Morgan Stanley ($1.82 vs $1.65, $15.02bln vs $14.3bln) and Bank of America ($0.83 vs $0.80, $25.54bln vs $25.22bln) beat on both the top and bottom lines, we fully expected one or more to join the fray, while other domestic companies are still mired in earnings blackouts.

As for market conditions this morning, after the Dow closed 211 points higher, recording a new all-time high, though the Nasdaq (+0.40%) and the S&P500 (+0.28%) couldn t quite make it, despite closing higher, futures are indicating a mixed open for the three major averages as the markets brace themselves for the most recent read on the consumer retail sales, which are expected to show a decline of 0.3% from the previous month.

Treasuries staged a rebound overnight, after Fed Chairman Powell refused to commit to just when the Fed would begin to lower interest rates sent most yields higher. The benchmark 10yr note saw its yield rise 5bp to close at 4.23%, while the long bond yield rose 8bp to 4.46%, though the 2yr note, the most susceptible to the vagaries of underlying interest rates, was unchanged on the day, closing at 4.45%

However, another remark by the chairman, if the central bank waits until inflation falls to its 2% target it will have waited too late, seems to have given the market some encouragement. The benchmark 10yr note is trading at 4.18%, 5bp ;ower this morning, while the long bond yield fell 6bp overnight.

The 2yr note, which close unchanged on the day, saw its yield fall 3bp overnight to 4.41%, while corporate spreads were unchanged, with the average high grade bond trading at 92bp over comparable Treasuries.

.

2024 HIGH GRADE ISSUANCE - 2024 VS 2023 COMPARISON

.

.

2024 HIGH GRADE ISSUANCE - 07/15 WEEK, JULY & 2024 ESTIMATES

.

.

2024 HIGH GRADE ISSUANCE - RECENT MANDATES

.

.

2024 HIGH GRADE ISSUANCE - 07/15 PRICINGS

.

---- Subscribe to read more ----

To receive this analysis plus much more, subscribe to IGM. Request your free demo of the service today.