By Christopher Reich
NEW YORK, Feb 15 (IFR) - Fifteen countable deals priced thisweek in the investment-grade primary market for USD17.205bn,surpassing the USD14.139bn priced last week and coming in at thehigher end of USD15bn area market expectations.
Volume estimates were pretty much split down the middle,with half of the Street thinking USD10-15bn and the other halfUSD15-20bn, forcing us to choose the mid-point as our officialestimate.
For those that like to include SSA deals in their count,volume would jump to USD31.055bn. Three sovereign issuersprinted deals this week for USD6.25bn, and another USD7.600bnwas priced from agency/supra issuers. Additionally, there werethree preferred/retails deals in the market this week forUSD325m.
Countable high-grade volume was finally able to break abovethe USD10-15bn range for the first time in four weeks, butlooking at deal flow over that timeframe, pace has remainedremarkably consistent. In terms of number of deals, the rangeover the last four weeks has been a very tight 12-15 deals (12,14, 13, 15 respectively per week).
The difference this week was the appearance of a USD6bnjumbo trade from Vodafone, which tied it for the secondlargest deal of 2013 with Bank of America and GoldmanSachs.
Take that one deal away and you are back to lower end of theUSD10-15bn range. JPMorgan's USD6.4bn three-part fromJanuary 17 remains the largest deal of the year.
Beyond the two crazy weeks in January that saw USD41.600bnand USD35.825bn get done back-to-back (a USD38.712bn two-weekaverage), 2013 weekly volume has been stuck in a consistentweekly range of anywhere from 6-15 deals for USD11.032bn toUSD17.205bn - a five week average of only 12 deals forUSD13.175bn.
As expected, activity from domestic corporate issuers pickedup this week as companies continue to emerge from black-out. Ofthe 15 deals this week, eight were domestic corporate names, andthey totaled USD6.405bn, accounting for 37.2% of the weeklyfigure.
Only the Yankee corporate number of USD6.800bn held agreater share of the high grade market this week at 39.5% - butfrom only two issues, including the jumbo Vodafone trade.
Lower-rated credits were prominent once again this week, andvolume-wise single-A issuers continue to dominate the month ofFebruary so far.
The break-down for this week saw seven single-A names pricefor USD12.450bn, good for a 72.3% market share, while seventriple-B names printed for USD4.400bn, good for 25.6% of theweekly total. The remaining 2.1% came from the lone double-Acredit to price this week. Double-A issuance in January of 2013accounted for 25% of the monthly volume, and now in February itis down to only 11%
The February month-to-date volume total is now up toUSD31.444bn, with USD17.970bn (57%) coming from single-A ratedcompanies, and USD9.469bn (30%) from triple-B names.
Only four double-A names have priced so far in February forUSD3.605bn (11%). There has also been one triple-A name for$400m (1%). With only two weeks left, February volume pacecontinues to be way short of the USD70bn average estimate IFRreceived for the month.
2013 YTD issuance now stands at USD143.301bn from 106issues, lagging behind 2012 pace for number of deals priced(129), but slightly ahead of the USD140.065bn volume total fromthe same period.
U.S. Treasuries..........
U.S. Treasury outlook...
U.S. corporate bonds....
U.S. agencies...........
U.S. mortgage-backeds...
U.S. asset-backeds......
U.S. municipal bonds... (Reporting By Christopher Reich; Editing by Ciara Linnane)
Vodafone (VOD)
