Corporate Spreads

September 10th, 2015 9:44 am | by John Jansen |

There has been significant issuance of corporate debt in the first days of this week. I spoke with a syndicate desk veteran about the reception of that paper. Most of the new issues have priced at a discount to outstanding paper and most have traded quite well after they have been freed. Early in the week Home Depot brought a deal ( 10 year I think) and this morning that debt is 10 basis points tighter than it was at issuance. ADP brought 5s and 10s and in similar fashion that paper is 10 basis points tighter. Yesterday Gilead brought a multi tranche deal and the shorter paper is better by 5 basis points to 7 basis points while the 10 year and longer paper is 10 basis points tighter.

My interlocutor suggested there was unlikely to be issuance tomorrow and also thought some of the reaction stems from paper starved retailcraving paper following the recent hiatus of issuance at the end of August. I do not have an answer but once that appetite is sated I wonder what happens to demand ahead of the FOMC.

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