[THE ENDGAME] : June Busted Out All Over

In what appeared to be a mad dash to get ahead a brace of economic data releases that could potentially alter the direction of the market, 13 high grade borrowers rushed to market today, raising $11.325bln to kick off a week that is only expected, on average, to produce $25bln in ex-SSA issuance. Still, it was nothing in comparison to the first day of trading in June of last year when $20.1bln was priced.

Those who chose to tap the market today seem to have made the right call, since benchmark Treasury yields fell anywhere from 7bp to 11bp depending on what part of the curve you looked at, after weak US manufacturing data raised more concerns about the strength of the economy. The ISM manufacturing index came in at 48.7 last month. A number below 50 indicates contraction in the index.

While applauded by the Treasury market, the benchmark 10yr note closed at 4.41%. its lowest level in a little more than two weeks, while the long bond yield fell 10bp to 4.55%, and the 2yr note saw its yield drop by 7bp to 4.82%, the data was booed by the stock market where the Dow fell 115 points, after being down as much as 250 points; the S&P500 fell early on only to close just above the flatline (0.11%); while the Nasdaq was able to eke out a small gain (0.56%) mostly due to a gain in shares of Nvidia.

In any event, today s deals were led by National Australia Bank s $2.5bln 3pt offering of 3yr fixed and floating rate notes, plus a 10yr offering, that contracted 22bp from IPT/PX; was 2.88x oversubscribed; and priced with an average NIC of 1bp. However, the most popular deals seemed to be Hyatt Hotel s $800m 2-pt offering, GATX $600m 2-pt deal and Southwestern Public Service s $600m 30yr FMB, all of which compressed 30bp from IPT/PX (the XEL deal was also 4.67x oversubscribed). Others were not so popular. BGC Group s 500m 5yr deal priced with a NIC of +23bp, while MetLife s $500m 10yr deal priced at +14bp. As a whole today s deals compressed 22.1bp from IPT/PX; were 3.41x oversubscribed; and priced with an average NIC of 4bp. Those two deals aside, the average NIC would have come in closer 2.4bp.

While we re not sure just how many more ex-SSA issuers will decide to tap the market tomorrow, though there were no few than six investor calls held today, we do know that there are already four SSA offerings (International Development Association (5yr "sustainable development bonds"), Province of British Columbia (10yr global notes), Kommunalbanken AS (3yr notes) and Council Of Europe Development Bank (3yr global "social inclusion" bonds) slated to come to market.