[MORNING CALL] The Eagle Has Landed

While it may be a contrite distraction, the outcome could dictate the amount of high-grade issuance this week. Over the past six years, the NFC has won the Super Bowl three times, including yesterday, while the AFC has won the other three. While Super Bowl wins are even, the AFC also holds a slight edge in the average weekly issuance ($33bln vs $24.723bln) the week following the big game. As a matter of fact, after Kansas City’s victory over the San Francisco 49ers last year, ex-SSA borrowers raised $37bln. So, I guess with an Eagles victory yesterday we’re looking at a week that may produce less than the Street is expecting.

The average estimate for high-grade ex-SSA issuance this week came in at $35bln, with the guesses ranging from a low of $25bln, to a high of $45bln. Prior to the Eagles’ victory, the Street was – and probably still is – confident that, with Treasury yields on the rise again - the benchmark 10yr note is yielding 4.50% this morning - potential borrowers will jump in before they go any higher. Some are expecting the emergence of some relatively large M&A-related transactions, along with recently blackout-exited borrowers.

One candidate on the M&A front is Rogers Communications who held investor calls last week. Back in September, the company announced it had signed an agreement to buy Bell's 37.5% ownership stake in Maple Leaf Sports & Entertainment for C$4.7bln ($3.28bln).

As it stands right now, after 25 issuers combined to raise $43.365bln, making last week the third busiest week this year, ex-SSA high-grade issuance stands at $236.865bln. compared to the $243.645bln priced last year during the same period (-2.8%). Add to that another $16.85bln in SSA issuance, and overall (SSA-inclusive) issuance for the week came in at $60.215bln, blowing away all weekly estimates, including the highest one of $50bln. Overall issuance is actually running 1.5% ahead of last year ($350.98bln vs $345.895bln.

As for what market conditions face prospective issuers this morning, futures are indicating a strong open for the three major indices as investors seemingly shrug off the potential of more Trump tariffs and position themselves ahead of the latest CPI (0.3% m-o-m, 2.9% y-o-y) and PPI (0.3% m-o-m, 3.2% y-o-y) release, not to mention retail sales (-0.1%).

This after the Dow fell 444 points on Friday and the S&P500 (-0.95%) and the Nasdaq (-1.365) also closed lower on the news that President Trump was planning reciprocal tariffs on trading partners which many believe will cause inflation to spike. The markets were already on shaky ground as some earlier consumer sentiment and jobs data pointed to a pickup in inflation and spiked the 10-year Treasury yield to 4.50%, where it’s trading this morning.

The long bond, which closed out last week yielding 4.69%, is trading 2bp higher this morning at 4.71%, while the 2yr note, saw its yield actually drop 1bp over the weekend to 4.28%. corporate spreads are unchanged, with the average high grade bond trading 84bp over comparable Treasuries.

There were new offerings announced overnight, but we’re told there are no less than a half dozen issuers assessing the market this morning before deciding to tap the US public debt market.

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2025 HIGH GRADE ISSUANCE - 02/10 WEEK, FEBRUARY & 2025 ESTIMATES

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2025 HIGH GRADE ISSUANCE - RECENT MANDATES

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