It was a table-setting week in the US investment grade primary as issuance slowed materially but a number of data center deals, M&A announcements and FIG deals lined up ahead of bank earnings next week.
Just under $10bn priced in the primary for the third-slowest week of the year, according to 9fin data. The rise in benchmark rates and a jumbo deal for Skydance last week took a lot of momentum out of the market, with that deal widening out as one of the worst performers in secondary trading this week as the 10-year notes moved out to T+306bps from T+262.5bp at pricing.
One banker said the lack of new mandates is largely a function of timing now that companies are going into earnings blackouts, but noted that there have been delays that will push a decent amount of corporate issuance back to November.
Companies are increasingly having to choose between biting the bullet now to lock in fixed rates or switch more of their debt to floating rate, where they can pay it down more quickly. Investors saw Skydance make that decision when it upsized its floating-rate loans and downsized the fixed-rate bond portion last week.
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