NEW YORK: General Motors Financial and six other investment grade borrowers on Wednesday priced US$6.2bn of bonds with modest new issue concessions despite it being a risk-off day.
Stocks fell, 10-year Treasury yields dropped below 1.8% and the CDX IG 26 index widened 2.1bp to 83.45bp after soft private jobs data added to worries about global growth ahead of the release of nonfarm payrolls data on Friday.
GM, rated Ba1/BBB-/BBB-, priced a US$3bn three parter after tightening spreads by 15bp to launch a US$1.4bn three-year fixed at T+155bp, a US$400m three-year floater at 3mL+145bp and a US$1.2bn seven-year fixed at T+220bp.
The final book was slightly over US$8bn on the bonds which priced with about 10bp in concessions.
The company was last in the market with a US$2.75bn deal in February, targeting five and 10-year maturities.
Those bonds - 5.25% 2026s and 4.2% 2021s - are now at at G+176bp and G+228bp which is much tighter than their initial pricing levels, according to MarketAxess.
The new deal also followed a US$2.25bn two-part deal sold by auto competitor Ford Motor Credit on Friday which was trading 4bp tighter on Wednesday.
SMALLER DEALS
Among the smaller deals up for grabs on Wednesday was Triple B rated Unum which priced a US$350m five-year at T+180bp or 40bp tighter from IPTs. It also priced a US$250m tap of its 2042s at T+270bp, which was 25bp tighter than IPTs.
Unum and another issuer REIT AvalonBay even increased the size of their trades.
Other borrowers included medical technology company CR Bard, LatAm credit Aeropuerto Internacional de Tocumen and consumer financial services company Synchrony Financial, which priced a US$500m 18-month FRN.
Investors poured US$3.5bn of orders into a US$500m 30-year trade from insurer Travelers which priced at T+115bp - 20bp inside initial price thoughts.
"The backdrop wasn't ideal with the way spreads were this morning and with equities down, but it was a decent day to get small deals through," a syndicate banker said.
Joseph LaVorgna, chief US economist at Deutsche Bank, said soothing comments from central bankers had suppressed volatility until now, but there were plenty of concerns about growth.
The recent string of negative data is countering central bank efforts to keep the markets calm, he said.
"Central banks may have run out of options, volatility will recover and rise over time, and there's only so much central banks can do," LaVorgna told IFR.
"Central banks cannot create growth."
High-grade supply so far this week is just over US$14bn or below the expected US$25bn tally.
"If we get a [Friday payroll] number that's supportive for the market, I wouldn't rule out Friday issuance," said one banker.
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