[THE ENDGAME] : Par for the Course (ADDS COLOM PRICING)
Activity in the high-grade primary market was much as expected today as the broader markets focused their attention on upcoming earnings results from five of the so-called “magnificent seven” and a temporary easing in tensions in the Middle East. Four borrowers quietly raised $3.8bln to kick off a week that is not expected to produce, on average, any more than $18bln in new supply. This followed the fifth slowest ex-SSA issuance week of the year, which included the eighteenth “zero” issuance day of the year, and only the twelfth time this year that ex-SSA issuance had failed to live up to the Street’s weekly average expectations.
DNB Bank ($1.5bln) and Amphenol ($1.5bln) made up the crux of today’s issuance, with Canadian Imperial Bank of Commerce and Ryder Systems contributing $500m and $300m, respectively, to today’s total. The 3-pt Amphenol deal was the thirty-ninth M&A-related transaction of the year, as the proceeds are being used to help finance the company’s $2.1bln acquisition of CommScope’s mobile network business. That brought the total amount of M&A-related debt raised this year to $151.14bln, or 11.11% of the year’s ex-SSA total. Last year M&A-related deals accounted for 10.43% (32 deals totaling $126.15bln) of 2023’s total volume. Overall (SSA-inclusive) issuance for the month, which now stands at $94.58bln, was bolstered today by a $3.64bln 2-pt offering from split-rated Republic of Colombia.
As mentioned, this morning, the flight to safety ahead of Israel’s retaliatory attack on Iran ended abruptly today, as Treasury yields resumed their upward climb. The benchmark 10yr note yield jumped 3bp from Friday’s close to 4.28%, its highest level since the last week of July, while the long bond yield edged 2bp higher, closing at 4.53%. Meanwhile, the 2yr note saw its yield also close 2bp higher at 4.12%. The benchmark 10yr note yield has now risen 47bp in the month of October, while the long bond yield is 38bp higher and the 2yr note yield is higher by 47bp. Meanwhile, corporate spreads (+85bp) are 7bp tighter on the month.
As investors exited the safe haven of the Treasury market in favor of the riskier stock market, as oil prices fell 5.5%, the Dow was able to end its five-day losing streak in impressive fashion (+274 points), while the S&P500 (+0.27%), and the Nasdaq (+0.26%) rallied along. Still the rally was even more impressive considering it comes ahead of some telltale earnings reports from a batch of mega cap technology companies, and a bushel of economic data releases culminating in the October jobs report (110k) on Friday. At least the markets won’t have to contend with comments from Fed officials, since the Fed is in its quiet period one week prior to the FOMC meeting.
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| Aa2/AA- | DNB Bank (DNBNO) |
| $1.5bln [DNB Bank] (DNBNO) 144a Reg S 2-pt (6nc5 (11/05/30) FRNS and F-T-Fs) registered global senior preferred notes. Aa2/AA-. BofA/GS/JPM/MS/TD/WFS. UOP: GCP. Par call 1yr prior to mat. Denoms 200k x 1k. S/D 11/05 (YF) |
| IPT(s) | GUIDANCE | LAUNCHED | PRICED |
| SOFR+Equiv | SOFR+Equiv | $350m 11/05/30 SOFR+106 | $350m SOFR+106 11/05/30 100.00 SOFR+106 |
| +100 area | +75# | $1.15bln 11/05/30 +75 | $1.15bln 4.853% 11/05/30 100.00 4.853% +75 (Back End: SOFR+105) (TSY 3.50% 9/30/29) |
| BOOKS: | $700m, $2.29bln |
| NIC(s): | N/A, -02 |
| COMP(s): | DNBNO 1.535 05/25/27 $95.10 ~T+66 G+61 DNBNO 1.605 03/30/28 $92.46 ~T+85 G+82 |
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| Baa2/BBB+/BBB+ | Ryder System Inc (R) |
| $300m (WNG) [Ryder System Inc] (R) 5yr (12/01/29) SEC registered senior unsecured MTNs. Baa2/BBB+/BBB+. BofA/BNP/MIZ/RBC/TSI. UOP: GCP. MWC. Par call 1mos prior to mat. Denoms 2k x 1k. S/D 11/05 (F) |
| IPT(s) | GUIDANCE | LAUNCHED | PRICED |
| +110 area | $300m (WNG) 12/01/29 +80 | $300m (WNG) 4.90% 12/01/29 99.911 4.919% +80 MW T+15 (TSY 3.50% 9/30/29) |
| BOOKS: | $1.25bln |
| NIC(s): | +04 |
| COMP(s): | R 5.375 03/15/29 $102.07 ~T+72 G+72 R 5.500 06/01/29 $102.58 ~T+73 G+74 R 4.950 09/01/29 $100.28 ~T+76 G+76 R 6.600 12/01/33 $108.99 ~T+103 G+106 |
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| Baa3/BBB- | Canadian Imperial Bank of Commerce (CM) |
| $500m [Canadian Imperial Bank of Commerce] (CM) 60.25nc5.25 (1/28/85) SEC registered jr sub notes. Baa3/BBB- (s/s). BofA/BNP/CIBC(B&D)/CITI/HSBC/JPM. UOP: GCP. Optional Redemption: Redeemable on the Initial Reset Date and on each Interest Payment Date thereafter, in whole or in part from time to time. Redeemable in whole but not in part following a Regulatory Event Date or Tax Event Date. “Recourse Event” means any of the following: there is non-payment by CM of the principal amount of the Notes, together with any accrued and unpaid interest, in cash on the Maturity Date;, a Failed Coupon Payment Date occurs; , CM does not pay the Redemption Price in cash on the redemption date in connection with a redemption of the Notes; an event of default under the Notes occurs; or a Trigger Event occurs. Upon a Recourse Event, the sole recourse of each holder of Notes will be limited to delivery of the Corresponding Trust Assets held in the CIBC LRCN Limited Recourse Trust (the “Limited Recourse Trust”) which may consist of Preferred Shares, cash or, in the case of a Recourse Event that is a Trigger Event, Common Shares of CM Trigger Event: Upon a Trigger Event, each holder of Notes will receive in exchange for such holder’s Notes a proportionate share of Common Shares CM issued upon automatic conversion of Preferred Shares held in the Limited Recourse Trust. Conversion into Common Shares of CM will be based on a Preferred Share value of US$1,000 (plus declared and unpaid dividends, if any) expressed in Canadian dollars, with a 1.00x multiplier and C$2.50 floor for the Conversion Price of the Common Shares. CUSIP: 13607PNF7 ISIN: US13607PNF70. Sales to Canada: YES. Denoms 200k x 1k. S/D 11/5 (YF) |
| IPT(s) | GUIDANCE | LAUNCHED | PRICED |
| 7.125% area | 6.95%# | $500m 1/28/85 6.95% | $500m 6.95% 1/28/85 100.00 6.95% (Back End: +283.3) (TSY 3.50% 9/30/29) |
| BOOKS: | $1.125bln |
| NIC(s): | N/A |
| COMP(s): | N/A |
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| A3/BBB+ | Amphenol Corp (APH) |
| $1.5bln [Amphenol Corp] (APH) 3-pt (5.05% 4/5/27 tap, long 10yr (1/15/35) & 30yr(11/15/54)) SEC registered senior unsecured notes. A3/BBB+ (s/s). BofA/BARC/BNP/HSBC. UOP: To partially finance the CommScope Acquisition and related fees/expenses. To the extent the acquisition does not close (after giving effect to SMRs for the 2035 & 2054 notes), for GCP, including repaying APH's 2.050% 2025 notes at maturity. MWC. Par call 1mo (tap), 3mo (10yr), 6mo (30yr) prior to mat. Special Mandatory Redemption: On the 2035 and 2054 notes at 101% if the closing of the merger has not occurred on or prior to July 18, 2025. CUSIPs: tap: 032095AN1 10yr: 032095AR2 30yr: 032095AS0 ISINs: tap: US032095AN10 10yr: US032095AR24 30yr: US032095AS07. Denoms 2k x 1k. S/D 10/31 (I) (M&A) |
| IPT(s) | GUIDANCE | LAUNCHED | PRICED |
| +60 area | +45# | $250m 4/5/27 +45 | $250m 5.05% 4/5/27 101.107 4.547% +45 MW T+10 (TSY 3.875% 10/15/27) |
| +105 area | +78# | $750m 1/15/35 +78 | $750m 5.00% 1/15/35 99.502 5.064% +78 MW T+15 (TSY 3.875% 8/15/34) |
| +125 area | +95# | $500m 11/15/54 +95 | $500m 5.375% 11/15/54 98.429 5.482% +95 MW T+15 (TSY 4.625% 5/15/54) |
| BOOKS: | $600m, $3.4bln, $4.1bln |
| NIC(s): | +06, +03, +01 |
| COMP(s): | APH 5.05 04/05/27 $101.26 ~T+38 G+34 APH 2.00 10/08/28 $97.52 ~T+71 G+63 APH 2.20 09/15/31 $84.35 ~T+62 G+71 APH 5.25 04/05/34 $101.63 ~T+74 G+76 |
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| Baa2/BB+/BB+ | Republic of Colombia (COLOM) |
| $3.64bln [Republic of Colombia] (COLOM) SEC-registered 2-part sr unsec notes (12yr due November 7, 2036 / 30yr due November 7, 2054). Baa2/BB+/BB+ (n/n/s). Via Citi, Itau BBA, SMBC Nikko. UOP: Colombia will use the net proceeds of the offering (i) in part, for liability management transactions, which may include payment of the purchase price for all or a portion of Colombia’s New Issue Comparable 4.500% Global Bonds due 2026 (the "4.50% 2026 Global Bonds") and 3.875% Global Bonds due 2027 (the "3.875% 2027 Global Bonds" and collectively, the "Old Global Bonds") that Colombia may purchase pursuant to its Offer to Purchase, on the terms and subject to the conditions set forth in the Offer to Purchase, and/or (ii) for general budgetary purposes. As of the date of this prospectus supplement, there were U.S. $1,500,000,000 4.50% 2026 Global Bonds and U.S. $1,896,692,000 3.875% 2027 Global Bonds outstanding. The 4.50% 2026 Global Bonds bear a fixed interest coupon of 4.50% and are due to mature on 07/28/2014. The 3.875% 2027 Global Bonds bear a fixed interest coupon of 3.875% and are due to mature on April 25, 2027. Amortization: bullet. Optional redemption: MWC, 3 months / 6 months par call. Denoms: 200k x 1k. S/D: 11/7 (T+8). |
| IPT(s) | GUIDANCE | LAUNCHED | PRICED |
| 12yr: 8.15% area 30yr: 8.80% area | 12yr: 7.85% area (+/-5) 30yr: 8.50% area (+/-5) | $2bln 11/7/2036 7.80% $1.64bln 11/7/2054 8.50% | $2bln 7.75% 11/7/2036 99.615 7.80% $1.64bln 8.375% 11/7/2054 98.65 8.50% |
| BOOKS: | N/A |
| NIC(s): | N/A |
| COMP(s): | N/A |
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| VOL | IPT/PX | XCVRD | NIC | TRADING | |
| (TODAY) 10/28 | 3,800 | -24 | 3.65 | 2.40 | 0.00 |
| WK ENDING 11/01/24 | 3,800 | -24 | 3.65 | 2.40 | 0.00 |
| WK ENDING 10/18/24 | 12,100 | -29 | 3.06 | 2.67 | -1.62 |
| WK ENDING 10/18/24 | 26,300 | -26 | 2.39 | 0.00 | -2.06 |
| WK ENDING 10/11/24 | 16,050 | -26 | 2.40 | 2.13 | -4.11 |
| WK ENDING 10/04/24 | 15,450 | -29 | 4.51 | 0.05 | -5.86 |
| WK ENDING 09/27/24 | 37,000 | -28 | 3.39 | 1.28 | -1.26 |
| WK ENDING 09/20/24 | 14,400 | -29 | 4.79 | 2.76 | -4.47 |
| WK ENDING 09/13/24 | 38,225 | -26 | 3.24 | 4.40 | -1.64 |
| WK ENDING 09/06/24 | 80,575 | -30 | 3.71 | 2.48 | -0.57 |
| WK ENDING 08/30/24 | 1,550 | -53 | 6.40 | 12.00 | -13.50 |
| WK ENDING 08/23/24 | 22,650 | -27 | 3.99 | 5.04 | -2.96 |
| WK ENDING 08/16/24 | 29,000 | -30 | 4.60 | 1.59 | -3.77 |
| WK ENDING 08/09/24 | 44,970 | -31 | 5.04 | 4.73 | -3.02 |
| WK ENDING 08/02/24 | 31,125 | -23 | 2.97 | 3.67 | 4.89 |
| WK ENDING 07/26/24 | 31,504 | -26 | 3.00 | 3.00 | -1.52 |
| WK ENDING 07/19/24 | 48,100 | -27 | 3.63 | 0.94 | -5.83 |
| WK ENDING 07/12/24 | 18,250 | -27 | 2.85 | 3.46 | -1.30 |
| WK ENDING 07/05/24 | 5,350 | -30 | 4.95 | 6.00 | -9.00 |
| WK ENDING 06/28/24 | 31,950 | -26 | 3.16 | 5.84 | 0.20 |
| YTD "ZERO DAYS" | 18 | 2023 / 32 | |||
| YTD FRNS DROPPED | 17 | 2023 / 39 | |||
| 24-Oct | 71,350 | -27.11 | 3.07 | 1.35 | -3.28 |
| 24-Sep | 172,550 | -26.08 | 2.95 | 2.41 | -1.22 |
| 24-Aug | 106,995 | -29.35 | 4.50 | 4.13 | -2.85 |
| 24-Jul | 125,504 | -26.26 | 4.80 | 2.47 | -2.96 |
| 24-Jun | 102,675 | -24.60 | 3.28 | 4.08 | 0.70 |
| 24-May | 136,150 | -29.89 | 3.51 | 1.93 | -0.84 |
| 24-Apr | 106,680 | -23.93 | 4.07 | 1.65 | -1.10 |
| 24-Mar | 142,909 | -25.00 | 3.82 | 1.46 | 0.59 |
| 24-Feb | 199,425 | -26.51 | 3.93 | 1.89 | -1.18 |
| 24-Jan | 195,620 | -25.66 | 3.73 | 2.70 | -2.20 |
| 23-Dec | 24,025 | -23.94 | 3.04 | 5.59 | -2.90 |
| 23-Nov | 100,725 | -25.50 | 3.95 | 7.40 | -5.15 |
| 23-Oct | 81,880 | -22.37 | 3.45 | 6.06 | -0.35 |
| VOL | IPT/PX | XCVRD | NIC | TRADING | |
| 2024 YTD | 1,359,858 | -27.05 | 3.57 | 2.37 | -1.95 |
| 2023 YTD | 1,081,105 | -24.20 | 3.66 | 6.74 | -3.40 |
| 24 VS '23 (% DIF) | 25.80% | -2.85 | -0.09 | -4.37 | 1.45 |
| OCT | OCT VOL | LOW EST | AVE EST | HI EST | DIF (+/-) |
| 2024 | 71,350 | 75,000 | 90,000 | 115,000 | -18,650 |
| 2024 | 2024 YTD | LOW EST | AVE EST | HI EST | DIF (+/-) |
| YTD | 1,359,858 | 84,858 |
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