New Corporates

The primary market roared back to life last week as borrowers took advantage of declining yields on Treasuries and narrow spreads on corporates.

  • 19 Mar 2004
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The primary market roared back to life last week as borrowers took advantage of declining yields on Treasuries and narrow spreads on corporates. It was one of the heaviest weeks of the year, in both high yield and investment grade. Investors snapped up the deals as they looked to put cash to work.

Pacific Gas & Electric was planning to raise $6.7 billion, in a five-part transaction that will help it emerge from Chapter 11 protection. Lehman Brothers and UBS are underwriting the mammoth deal, which is the largest ever by a utility. The first mortgage bonds are secured by the company's real estate, power plants and equipment. A.J. Sabatelle, v.p. and senior credit officer at Moody's Investors Service, says the deal is noteworthy because of its sheer size. This is, of course, a function of the creditor claims the company needs to satisfy. Mitch Stapley, a portfolio manager at Fifth Third Investment Advisors in Grand Rapids, Mich., plans to buy a small portion of the deal and says the company itself is sound but was forced into bankruptcy by political pressures.

Pacific Gas was in the market with five-, seven-, 10- and 30-year fixed-rate classes, along with a two-year floating-rate note. The 30-year will account for roughly $3 billion, which is very large for a long bond. Moody's has a stable outlook on the provisional Baa2-rated new issues.

Standard Commercial, one of the largest independent tobacco dealers, was shopping $150 million of senior notes due in '12. The company will use the proceeds to redeem its outstanding debt and repay a portion of its existing revolving credit facility. Some investors say it is unusual to see this offering in the current market, which is already saturated with high-yield tobacco offerings. The coupon was talked at 8 1/4% to 8 1/2%. Deutsche Bank is acting as underwriter. Jayne Ross, an analyst at Standard & Poor's, states that the company's 22% market share among leaf tobacco dealers is strong. On the other hand, she says it also is a leveraged company and has customer concentration risk.

S&P rates the new deal double-B plus.

  • 19 Mar 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 356,356.29 1337 9.08%
2 JPMorgan 317,952.80 1443 8.10%
3 Bank of America Merrill Lynch 316,523.82 1098 8.06%
4 Goldman Sachs 235,165.28 784 5.99%
5 Barclays 229,116.44 888 5.84%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 34,411.72 162 6.58%
2 Deutsche Bank 34,293.84 117 6.56%
3 Bank of America Merrill Lynch 31,113.25 94 5.95%
4 BNP Paribas 27,578.61 168 5.27%
5 SG Corporate & Investment Banking 23,982.83 136 4.59%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 19,536.02 78 8.84%
2 Morgan Stanley 16,323.54 83 7.38%
3 Citi 15,946.50 94 7.21%
4 UBS 15,404.75 59 6.97%
5 Goldman Sachs 13,695.77 74 6.19%