Investors warn against high NIPs punishing long term support

At first look, a high new issue premium makes a corporate bond deal look cheap for investors. However, the negative effect that premium can have on an issuer’s outstanding bonds can prove to outweigh the cheapness of the new deal for an issuer’s long term backers.

  • By Nigel Owen, Victor Jimenez
  • 09 Jan 2019
“In simplistic terms, secondary spreads reflect the credit risk of an issuer and the new issue premium reflects the risk in the market at the time of doing the deal,” said a credit fund manager at a UK asset manager. “But if the new issue premium is seen ...

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All Corporate Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 9,020.67 33 8.90%
2 Deutsche Bank 6,427.47 19 6.34%
3 JPMorgan 5,730.67 22 5.66%
4 Goldman Sachs 5,728.64 21 5.65%
5 Barclays 5,368.96 18 5.30%

Bookrunners of Euro Denominated Corporate IG Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 1,932.38 9 9.46%
2 UniCredit 1,348.77 9 6.61%
3 BNP Paribas 1,279.50 7 6.27%
4 JPMorgan 1,150.79 5 5.64%
5 Bank of America Merrill Lynch 1,125.97 7 5.51%

Bookrunners of European HY Bonds

Rank Lead Manager Amount €m No of issues Share %
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1 JPMorgan 200.50 2 12.59%
1 Deutsche Bank 200.50 2 12.59%
3 UniCredit 113.00 1 7.09%
3 Sumitomo Mitsui Financial Group 113.00 1 7.09%
3 Mediobanca 113.00 1 7.09%

Bookrunners of Dollar Denominated HY Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Bank of America Merrill Lynch 544.58 5 11.06%
2 JPMorgan 482.08 5 9.79%
3 Wells Fargo Securities 374.58 3 7.61%
3 Goldman Sachs 374.58 3 7.61%
5 SunTrust Robinson Humphrey Inc 366.66 4 7.45%

Bookrunners of European Corporate IG Bonds

Rank Lead Manager Amount $m No of issues Share %
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  • Today
1 Citi 3,324.67 8 9.67%
2 Barclays 2,536.07 5 7.38%
3 JPMorgan 2,444.85 4 7.11%
4 Bank of America Merrill Lynch 2,436.88 6 7.09%
5 MUFG 2,123.57 3 6.18%