Mar 4 2014, 3:30pm CST | by Forbes
Today’s reprieve from escalating global tensions left the primary-market window wide open for issuers, allowing 13 borrowers to launch new deals today, totaling $19.2 billion.
Under LCD criteria, which excludes sovereign, quasi-sovereign, supranational, and preferred and hybrid-structure deals, issuance volume today is the most since Verizon Communications placed a record-smashing $49 billion deal across eight tranches on Sept. 11 last year.
Issuance volume was only higher than today’s total on one other occasion last year, after Apple’s $17-billion debt deal on April 30 led a slightly higher $19.45 billion slate of new issues inked that day.
Today’s issuance volume raised the five-session total north of $35 billion. When excluding readings incorporating the Apple and Verizon deals, that total was also the highest for any five-day period since the first full week of January last year, LCD data shows.
The breadth of participation was also notable. The primary market has only facilitated deals for more issuers in a single session once in the last 12 months, after 14 issuers placed a substantially lighter $12.8 billion slate of new debt on Nov. 18 last year.
A majority of issuers targeted refinancing efforts, including Gilead Sciences ($4 billion to refinance current debt and settle up to $2.9 billion of warrants); Viacom ($1.5 billion to repay debt, including $600 million outstanding of its 4.375% notes due Sept. 15, 2014 on April 3, by utilizing a make-whole call provision); Coca-Cola ($1 billion of 18-month FRNs to repay commercial paper); Aetna ($750 million to refinance the same amount of 6% notes due June 2016); Potash Corp. of Saskatchewan ($750 million, primarily to repay a May debt maturity); Air Lease Corp. ($500 million for unspecified refinancing efforts); Pitney Bowes ($500 million, backing its second debt-tender offer in as many years); and NSTAR Electric ($300 million to repay the same amount of 4.875% notes due April 15).
Burlington Northern Santa Fe ($1.5 billion, in its third offering of 10- and 30-year notes in that amount since last March) also listed debt repayment as a possible use of proceeds, among other general corporate purposes.
Refinancing efforts came with the average corporate-bond yield across the Barclays high-grade index at a nine-month low, near 3%, or less than the record-low annual averages from 2012-2013.
Bank and insurance companies rounded out today’s impressive slate, including deals for Bank of Tokyo-Mitsubishi ($4 billion across five tranches); Citigroup ($1.65 billion of three-year fixed- and floating-rate notes); Royal Bank of Canada ($1.65 billion of five-year fixed- and floating-rate notes); and AIA Group ($1 billion).
Source: Forbes Business
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