Bonds In Conversation : Survival of The Fittest

12/09/2013 by

Largest Bond Deal Ever In History

Verizon (Baa1/BBB+/A-) Sells $49b in 8-Part Offering, Largest Bond Deal Ever

Verizon’s deal tops Apple’s 6-part, $17b offering.
$4.25b 3Y fixed sold at+165bps
$2.25 3Y FRN sold at 3mL +153bps
$4.75b 5Y fixed sold at +190bps
$1.75b 5Y FRN sold at 3mL +175bps
$4b 7Y notes sold at +215bps
$11b 10Y notes sold at +225bps
$6b 20Y bonds sold at +250bps
$15b 30Y bonds sold at +265bps

Best Part : Instant profits !!

“Sept. 12 (Bloomberg) — Verizon Communications Inc.
rewarded investors with a profit of about $2.09 billion for
agreeing to buy the record $49 billion of bonds it sold
yesterday as the price of the securities surged.
The company’s $15 billion of 30-year debentures, the
biggest portion of the eight-part deal, traded at 105.714 cents
on the dollar yesterday, up from an issue price of 99.883 cents,
according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority. The $11 billion of 10-
year notes rose 3.461 cents to 103.137 cents.”

None of that windfall for Singapore bonds but prices bounced back higher on the back of lower rates; the Singapore rate curve is 0.03 to 0.15% lower on the week. Not that anything much is trading or prices are readily available.

Singapore bank subs in USD trading at their all time tight in credit spreads yet HDB issued a SGD 5Y today at its highest ever yield since 2011 and at the highest credit spread ever seen for a HDB 5Y.

https://tradehaven.net/market/sgd-new-issue-hdb-5y-2-365-its-time-to-recalibrate-your-risk-free-rate/

But worse luck for Turkey.

“On Tuesday, the country sold 1.11 billion liras ($551 million) in 10-year bonds that priced to yield 10.05%, the highest since April 2010. Turkey’s government also had to hike interest rates significantly more than similarly battered peers like Indonesia and Hungary to issue the debt.”

http://blogs.wsj.com/moneybeat/2013/09/11/surging-yield-highlights-turkeys-fall-from-fortune/

Bank Indonesia Raises Reference Rate to 7.25% From 7.00%

Thailand Cancels 15-Year Inflation Bond Sale; BOT Says

The picture is starting to emerge. The fittest and the too big to fails will survive this round. As for the rest, they will just have to hang in there and find some sympathy votes.

Category : Market, Rates/Bonds

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Bonds In Conversation : Survival of The Fittest

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