Moody’s placed PepsiCo’s A1 rating on
REVIEWûFORûAûDOWNGRADEûLASTûWEEKûFOLLOWINGûTHEû
announcement of the Rockstar acquisition.
Although the M&A deal will help PepsiCo
compete with Coca-Cola in the growing
ENERGYûDRINKûSPACE ûLEVERAGEûISûALSOûEXPECTEDû
TOûINCREASEûABOVEû-OODYSûTHREEûTIMESûDEBTû
to Ebitda threshold for a downgrade.
h-OODYSûWILLûEVALUATEûTHEûCOMPANYSû
ABILITYûTOûINTEGRATEûAûRELATIVELYûDIVERSEûGROUPû
of new assets, as well as the risks and
BENElTSûTOûADDINGû2OCKSTARûTOûTHEûPORTFOLIO û
GIVENûTHEûENERGYûBRANDSûRECENTûMARKETû
SHAREûCHALLENGESûINûANûOVERALLûGROWINGû
ENERGYûBEVERAGEûCATEGORY vûTHEûAGENCYû
WROTEûINûTHEûANNOUNCEMENTûOFûTHEûREVIEWEIGHT ISSUERS ADD TO MOMENTUMEight high-grade borrowers were in the
primary market on Friday as IFR went to
PRESS ûADDINGûTOûAûHEAVYûWEEKûOFûSUPPLYû
AMIDûSEVEREûVOLATILITYûINûCREDITûSPREADS û
Treasury rates and equities.
COCA-COLA and INTEL were the two blue-chip
names leading the way with multi-tranche
BENCHMARKûDEALS ûTHEûFORMERûOFFERINGûAûlVE
part deal that could be used in part to fund
acquisitions, while the latter announced a
SIX
PARTûTRADEûLARGELYûTOûFUNDûRElNANCINGS
In what has become standard practice
AMIDûTHEûCORONAVIRUS
DRIVENûSELL
OFF û#OCA
Cola was offering hefty new-issue
CONCESSIONSûnûASûMUCHûASûBPûOVERûITSû
CURVE ûACCORDINGûTOû#REDIT3IGHTS
Close competitor PEPSICOûISSUEDûAûlVE
PARTû
deal earlier in the week and landed spreads
much tighter than where Coke was offering
bonds on Friday.
4HEû53BNûûû0EPSI#OûBONDû
WASûPRICEDûATûBPûOVERû4REASURIES ûWHILEû
#OCA
#OLAûWASûSTARTINGûAû
YEARûATûBPû
OVER
But that same PepsiCo bond had widened
SIGNIlCANTLYûINûTHEûSECONDARYûMARKETûTOûAû
'
SPREADûOFûBP ûACCORDINGûTOû
MarketAxess data.
Issuance is skewed to the long end of the
CURVE ûWHEREûSECONDARYûSPREADSûAREûMOREû
stable to allow for a more certain pricing
outcome, one syndicate banker noted.
Intel, for example, was going out to 40
years, while none of the week’s issuance
WASûSHORTERûTHANûlVEûYEARS
“The front end of the high-grade market is
completely dislocated by the liquidity issues
OFûTHEûFRONTûENDûOFûTHEû4REASURYûCURVEûANDû
that’s why you’re seeing a lot of issuers going
further out,” the syndicate banker said.
“With a little more clarity around
VALUATION ûTHEREûISûBETTERûEXECUTIONû
certainty at the long end.”
Two more familiar names, CHARLES SCHWAB
and BERKSHIRE HATHAWAY ENERGY, were in the
market on Friday as well.The other issuers included hydrocarbon
exploration company EOG RESOURCES, electric
utility APPALACHIAN POWER, cleaning and
SANITISINGûSERVICESûCOMPANYûECHOLAB and
ratings agency MOODY’S.BROADER MARKET PERFORMANCE
Friday’s eight borrowers come close on the
HEELSûOFûSEVENûISSUERSûTHATûPRICEDû
US$18.55bn on Thursday, bringing weekly
SUPPLYûTOû53BN
For the most part, bonds were getting
done, although they had to come with high
concessions. Bank of America placed the
AVERAGEûNEW
ISSUEûCONCESSIONûATûBPûONû
Thursday, a jump from 47.8bp on Tuesday.
-ANYûBORROWERSûDIDûNOTûMOVEûFROMûINITIALû
PRICEûTHOUGHTSûLASTûWEEKûBUT ûGIVENûTHEû
VELOCITYûOFûSPREADûWIDENING ûTHATûWASûNOTûAû
surprise.
“Tightening 10bp–15bp in a market that
HASûBLOWNûOUTûBPûORûMOREûOVERûTHEûLASTû
WEEKûORûTWOûISûNOTûGOINGûTOûGIVEûYOUûTHEû
VALUEûANDûBENElTûTHATûITûWOULDûHAVEûINûANû
otherwise more regular market,” the
syndicate banker said.
!VERAGEûHIGH
GRADEûCREDITûSPREADSû
WIDENEDûTOûBPûOVERû4REASURIESûONûThursday – up 250bp on the year, according
to ICE BofA data.
)NVESTMENT
GRADEûFUNDSûALSOûSUFFEREDû
ANOTHERûRECORDûOUTmOWûOFû53BNûFORû
the week ending March 18, far exceeding
the prior record of US$7.275bn set just the
week before, according to Lipper data.EUROS
QUALITY AND DURATION KEEP
MTNs OPENWith the public bond markets becoming
INCREASINGLYûDIFlCULTûFORûISSUERSûTOûNAVIGATEû
some are turning to the MTN market to get
long-dated funding, though bankers warned
LASTûWEEKûTHATûTHEûOUTLOOKûFORûEVENûPRIVATEû
trades looks bleak.
(IGHER
RATEDûISSUERSûHAVEûBEENûABLEûTOû
TAKEûADVANTAGEûOFûINVESTORûDEMAND û
especially at the long-end where yields look
PARTICULARLYûATTRACTIVEûTOûBUYERS
!TûLEASTûlVEû33!ûBORROWERS ûFORûEXAMPLE û
HAVEûBEENûABLEûTOûFUNDûFORûTENORSûFROMûû
years to 100 years during the middle stretch
of March.International Financing Review March 21 2020 31BONDS CORPORATESALL INVESTMENT-GRADE BONDS IN EUROS
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)Excluding ABS/MBS, equity-related debt.
Source: Refinitiv SDC code: N91 JP Morgan 57 24,586.12 8.6
2 BNP Paribas 60 19,863.90 7.0
3 Barclays 62 19,093.76 6.7
4 Credit Agricole 61 18,803.87 6.6
5 SG 49 18,114.77 6.4
6 HSBC 51 16,832.63 5.9
7 Deutsche Bank 50 14,388.11 5.1
8 UniCredit 52 13,771.27 4.8
9 Goldman Sachs 25 10,787.56 3.8
10 Citigroup 30 10,729.45 3.8
Total 290 284,531.92ALL CORPORATE BONDS IN STERLING
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues £(m) (%)Source: Refinitiv SDC code: N8a1 Barclays 9 1,166.77 16.7
2 JP Morgan 6 910.00 13.0
3 BNP Paribas 6 593.89 8.5
4 HSBC 6 520.67 7.4
5 NatWest Markets 5 480.21 6.9
6 RBC 5 464.22 6.6
7 Lloyds Bank 4 455.46 6.5
8 Citigroup 3 439.30 6.3
9 Deutsche Bank 2 297.89 4.3
10 Mizuho 2 208.52 3.0
Total 14 6,996.87ALL INTERNATIONAL STERLING BONDS
EXCLUDING SECURITISATIONS
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues £(m) (%)Including preferreds. Excluding equity-related debt.
Source: Refinitiv SDC code: K05a1 Barclays 30 5,865.22 14.4
2 HSBC 25 4,353.40 10.7
3 NatWest Markets 23 4,133.20 10.1
4 RBC 19 4,064.52 9.9
5 JP Morgan 10 2,452.10 6.0
6 Deutsche Bank 12 2,334.09 5.7
7 Lloyds Bank 11 2,263.48 5.5
8 TD Securities 9 2,181.40 5.3
9 Citigroup 11 2,162.89 5.3
10 Goldman Sachs 7 1,512.99 3.7
Total 62 40,851.76ALL SWISS FRANC BONDS INCLUDING
SECURITISATIONS
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues SFr(m) (%)Including preferreds. Excluding equity-related debt.
Source: Refinitiv1 Credit Suisse 35 4,488.0 37.6
2 UBS 24 2,350.1 19.7
3 Verband 9 2,077.6 17.4
4 Raiffeisen Schweiz 11 942.7 7.9
5 ZKB 11 806.6 6.8
6 Deutsche Bank 6 802.6 6.7
7 BNP Paribas 2 217.1 1.8
8 Commerzbank 1 92.5 0.8
9 VTB Capital 1 83.3 0.7
=9 JP Morgan 1 83.3 0.7
Total 55 11,943.86 IFR Bonds 2325 p 23 - 45 .indd 31 20 / 03 / 2020 19 : 59 : 40