3/25/2023 0 Comments Lead arranger vs bookrunner![]() ![]() ![]() "Unless that one goes, there might be zero deals this year." "We have five deals in the pipeline and you need one to go to open up that supply, but nobody wants to be the first," said one DCM banker. Who's first?īankers still hope there will be more supply in the coming weeks, though that would require a company to get over first-mover fears. Those notes are now trading 10–15 points below reoffer. The sterling investment-grade corporate primary market has been shut for over a month, with nothing printed since Danish utility Orsted sold two sterling notes as part of a dual-currency triple-tranche trade in early September. Having said that, a lot of corporates have spent the last decade extending out maturities, so they don’t have a huge need for new debt in the near future." "For companies that need to refinance, that will be expensive. ![]() “If you get a margin call, then you sell what’s most liquid first, which after Gilts is corporates," said David Zahn, head of European fixed income at Franklin Templeton. In one example of how rampant selling has swept up liquid names, a £500m 1.5% July 2026 bond issued by consumer goods company Unilever (A1/A+/A) was trading at 6% at one stage last week, according to Refinitiv, before recovering to 5.64% by Thursday – though that's still 100bp higher than where it was quoted before the UK's mini-budget on September 23. The forced selling by UK pension funds has sent a shudder not just through the Gilt market but has also embroiled UK corporates.Įven the best credits have seen their yields soar. ![]()
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