Busy couple of days on the new issue front as issuers look to take advantage of lower benchmark yields. Yesterdays issuance consisted of:
Time Warner Cable (Baa2/BBB) - $1B 10yr, $1.25B 30yr. +210/232 respectively
Heinz (baa2/BBB+) - $300MM 5yr, $400MM 10yr. +110/125 respectively
Schlumberger Norge (A1/A+) $500MM 5yr +108
Schlumberger Lux (A1/A+) $600MM 5yr, $1.6B 10yr. +108/130 respectively
Wisc Elec (A2/A) $300MM 10yr +105
Daimler Finance (A3/BBB+) $800MM 3y, $1.5B 5y, $750MM 10y. +165/185/195 respectively
Xcel Energy (Baa1/BBB+) $250MM 30yr +150
France Telecom (A3/A) $1B 5yr, $1B 10yr. +195/220 respectively
Pac Gas (A3/BBB+) $250MM 10yr +130
Would expect issuers to continue to step in at these levels. While absolute yields are low, corporate spreads are still attractive relative to alternatives - especially given the current strength of corporate balance sheets and the risk premium relative to absolute yields.
This is my effort to help fit the pieces together to get a better picture of the capital markets.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
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