Ironshore Holdings prices small deal; weak market holds off issuers; Goldman notes widen

By Andrea Heisinger and Cristal Cody

New York, May 5 - Ironshore Holdings (U.S.) Inc. was the lone deal on Wednesday as fears about economies abroad deepened, and issuance of high-grade corporate bonds continued at a snail-like pace.

Ironshore's $250 million of 10-year notes was a two-day sale. It's one of only two issuers to brave the market so far this week.

Otherwise, the market was again crippled by worries about Greece, after three people died in riots related to the countries debt woes, and news that Portugal's debt rating could be dropped two notches by Moody's Investors Service was also causing grief, although the country would still be investment grade.

"The market's too weak," a source said at the end of the day. "There's too much volatility."

It's unlikely anyone will issue for the rest of the week, she said.

Investment-grade bonds continued to move out on worries with debt from Spain in addition to the two countries cited above.

In addition, Goldman Sachs Group Inc.'s benchmark 10-year notes widened again in trading on Wednesday, according to sources.

"Corp spreads are wider," a source said.

The CDX Series 14 North American high-grade index was "wider again" also on Wednesday, according to a source. It eased 7 bps to a mid bid-asked spread level of 105 bps. The index had moved out 8 bps the previous day.

Meanwhile, overall Trace volume was flat from the day before at about $11.6 billion, according to a source.

Elsewhere, Treasuries were tighter as traders watched the overseas situations.

Yields on the 10-year notes were pushed earlier in the day to their tightest since December.

By the end of the day, the yield on the 10-year benchmark Treasury note firmed 5 bps to 3.54%. In addition, the yield on the 30-year Treasury bond was 2 bps tighter at 4.39%.

Ironshore Holdings prices 10-year notes

Ironshore Holdings (U.S.) priced $250 million of 8.5% 10-year senior unsecured notes in the afternoon to yield 8.625%, a source away from the sale said. The deal went overnight from Tuesday.

The notes (Baa3/BBB-) priced at a spread of Treasuries plus 506.3 bps, dollar price of 99.17.

No activity popped up on the notes in secondary trading, a source said.

"Didn't see anything on Ironshore Holdings."

They were sold under Rule 144A and are guaranteed by parent company Ironshore Inc.

Bookrunners were Barclays Capital and Bank of America Merrill Lynch.

The U.S. arm of the commercial insurance company is based in New York City.

Issuance stalls as tone worsens

It was the third straight day of very little issuance on the high-grade side of the bond market as headlines worsened investor confidence and no-go calls were made.

The deal from Ironshore that did price had been announced the day before and was "scheduled to price on Wednesday anyway," a source said.

A couple of sources from different syndicate desks said in e-mails that they weren't expecting any deals for the rest of the week.

One, from a larger desk, said: "It's going to be a quiet week."

There are "no new earnings to balance things out," the source said, adding that investors don't have any positive news to look at.

It's hoped that deals will resurface in the coming week if conditions improve, she said.

New deal flow has been slow for weeks amid economic fears, earnings season and the fact that many major deals have already been done for the year.

Goldman weaker

Goldman's investment-grade debt found no traction on Wednesday and continued to move out, according to sources.

"Goldman 10-years are about 12 bps wider," one trader said. "Fitch put them on negative outlook."

The 5.375% notes due 2020 were seen trading at 234 bps on Wednesday, compared to 222 bps the day before.

Fitch Ratings revised the outlook on the New York-based bank because of the federal investigations into Goldman's investment practices.

"Goldman's franchise and market position are potentially vulnerable to scrutiny by stakeholders and, like peers, may be affected by the industry's regulatory evolution," Fitch said in the release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.