[MORNING CALL:] The Bell Lap

After missing weekly estimates last week by one of the widest margins of the year, the Street is under the impression that potential domestic issuers will make one final foray into the market this week before their self-imposed earnings blackout periods set in. To that end, the Street is looking for, on average, $24bln in new high grade debt sales to cross the tape this week, with the guesses ranging from a low of $15bln, to a high of $35bln.

While $24bln may not seem like a lot, it would still be enough to bring ex-SSA issuance for the month to close to $160bln, which would top all monthly estimates, including the highest one of $146bln. This year, the month of September, the perennial runner up to the month of March as the top issuance producing month of the year over the last decade, averaging $132.342bln, has already topped that 10-year mark.

Over that same period, we have seen as little as $89.43bln (2015), and as much as $167.52bln (2020) come to market in the month of September. With as many as six viable trading days remaining in the month, there is a possibility that we could eclipse that mark should we come close to the higher end of the estimates range this week. But it will all depend on just how the Fed’s 50bp rate cut, the rise in benchmark rates and the tightness of credit spreads influence would-be borrowers going forward.

While we’re expecting a good number of domestic borrowers to tap the market this week, let’s not forget about those Yankee borrowers who were held at bay last week by a variety of holidays in the APAC market. And, from the looks of it, they seem to be making up for lost time, with three deals slated for pricing today announced overnight.

Hyundai Capital America is in the market with a 4-pt offering of 3yr fixed and/or floaters along with 5yr and 7yr notes. Also announced overnight was a 3-pt offering of 3yr senior unsecured fixed and/or floaters and 11nc10 subordinated notes from Australia and New Zealand Banking Group Limited. Lastly, AIA Group will be looking to sell 10.5 and 30yr subordinated notes as well. One other Yankee deal was announced, though it won’t be pricing until tomorrow. Chinese shopping platform Meituan is expected to tap the market tomorrow with a proposed 2-pt offering of 3.5yr and 5yr notes.

For those keeping tabs on the SSA market, Industrial Bank of Korea is in the market with a 2-pt offering of 3yr FRNs and 5yr fixed rate “social” bonds and REC Ltd will be looking to sell 5yr “green” bonds sometime today, while BNG Bank (2yr notes) and Kommunalbanken Norway (5yr notes) will be looking to come to market tomorrow.

As for market conditions this morning, now that the dust has settled after the Fed gave the markets what they wanted, a 50bp rate cut. Futures are indicating a rather mundane, though slightly higher open for the three major averages. This after the Dow and the S&P500 closed out last week at new all-time highs, while the Nasdaq enjoyed a winning week, despitethe volatility caused by the Fed’s decision.

Over in the Treasury market, things were relatively quiet overnight, though yields did back up marginally. The benchmark 10yr note, whose yield rose 10bp last week, tacked on another 3bp over the weekend, now trading at 3.75bp, while the long bond is now trading at 4.10%, 16bp higher than this time last week. Even the 2yr note yield edged 3bp overnight to 3.58%, still only higher by 2bp from last Monday. At the same time, corporate spreads were unchanged, with the average high grade bond trading 93bp over comparable Treasuries.

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2024 HIGH GRADE ISSUANCE - 09/23 WEEK, SEPTEMBER & 2024 ESTIMATES

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2024 HIGH GRADE ISSUANCE - RECENT MANDATES

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2024 HIGH GRADE ISSUANCE - 09/23 CALENDAR

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