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US IG WRAP-Qualcomm poised to lead expected deal surge next week

By Danielle Robinson

NEW YORK, May 8 (IFR) - Qualcomm (Swiss: QCOM.SW - news) is expected to lead yet another onslaught of new high-grade issuance in the week ahead, after it wraps up a roadshow on Monday for a debut offering of up to US$10bn to fund share buybacks.

The deal, led by Bank of America Merrill Lynch, Goldman Sachs and JP Morgan, will be part of a US$30-US$35bn new issue week, according to syndicate desks.

That's on top of this week's US$52.525bn deal volume, the fourth busiest week of all time and the third largest this year, according to IFR data.

New (KOSDAQ: 160550.KQ - news) issue concessions ballooned into the double digits this week, as the deluge of supply careered with wild swings at the long end of the Treasury yield curve.

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But borrowers next week will at least have behind them a reasonable after-market performance by most of the latest round of jumbo deals.

"We are ending this week in a pretty good state, for the most part," said one syndicate manager.

Apple (NasdaqGS: AAPL - news) 's US$8bn deal was trading around new issue to a few basis points tighter - a typical after-market performance by the tech giant.

AbbVie (Xetra: 4AB.DE - news) 's US$16.7bn acquisition financing for Pharmacyclics was about 4-8bp tighter, and Anglo American (LSE: AAL.L - news) 's US$1.5bn deal was about 5-15bp inside of new issue, after it paid 12-19bp in NIC (NasdaqGS: EGOV - news) .

The size of order books in the past week also demonstrated that investors still have cash to put to work and have saved up for well-flagged acquisition and share buyback financings.

Apple received US$21bn of orders, Shell US$23bn for a US$10bn offering and AbbVie US$60bn.

On Thursday, after US$45.125bn had already been priced during the week, Boston Scientific received US$6bn of orders for a US$1.85bn acquistion-related financing and Anglo American US$6bn for its US$1.5bn trade.

US Treasury yields tightened on Friday, helped by US jobs data for April that fueled bets that the Federal Reserve will not begin hiking interest rates until late in the year.

It was a second day of increases for Treasuries after an unusually long, eight-session losing streak, with most tightening coming after news that the US nonfarm payrolls increased by 223,000 in April.

The 10-year Treasury yield was at 2.123% on Friday afternoon, and the 30-year at 2.871%. (Reporting By Danielle Robinson; editing by Shankar Ramakrishnan)