Just over $14 billion in investment grade supply came to market this week bringing the year-to-date total to $162 billion or $54 billion per month. The highlights of the week were the two tranche deal for CIT and the $7.3 billion multi-tranche, multi-currency deal for Morgan Stanley, which has the distinction of being the largest deal ever by a securities firm. The 30-year tranche has remained well-supported given the scarcity of paper in the long end in the finance sector. Look for additional issuance from the finance sector given the current uncertainty in the short-term markets and the prospect for higher rates later in the year. With 1Q02 issuance already exceeding expectations and remaining on pace with 1Q01, it is worthwhile to put this trend into the context of net issuance by looking at the calendar of redemptions for the year. Using maturities of securities that qualified for inclusion in aggregate corporate indexes (which removes the impact of money market instruments), redemptions maintain a solid monthly pace in the range of $10-$15 billion throughout the year with the sole exception of November. This pace slightly exceeds that of 2001.
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