Blue-chip corporations including Morgan Stanley, Hyundai (OTC:HYMTF) Capital America, and Bristol-Myers Squibb (NYSE:BMY) Co. are gearing up to unload US investment-grade debt as they transition out of earnings blackout periods. This strategic move comes ahead of the Federal Reserve's meeting scheduled for later this week.
The market witnessed a surge in activity on Monday, with 12 high-grade issuers stepping into the fray. This marks the most active day since September 5, indicating a positive shift in market sentiment. Factors contributing to this rise include a rebound in stocks, tightened US high-grade spreads, and a decrease in trading on a high-grade index of credit default swaps.
Morgan Stanley is contemplating an 11-year fixed-to-floating rate note deal. Hyundai Capital America is in the process of marketing a three-part bond deal, while Bristol Myers Squibb is considering offering a 40-year fixed-rate tranche to investors.
Despite earlier sales disruptions attributable to rate volatility, syndicate desks are optimistic. They anticipate between $15 billion and $20 billion of US high-grade bond sales to occur this week. This projection is bolstered by the fact that the accumulated volume for October has already reached an impressive approximate total of $56 billion.
The actions of these blue-chip firms underscore their confidence in the market's stability and potential. Their readiness to offload significant amounts of US investment-grade debt suggests an expectation of favorable conditions following the Federal Reserve's upcoming meeting.
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