By Danielle Robinson
NEW YORK, April 10 (IFR) - US banks should dominate the high-grade primary market next week, coming with new deals as they usually do after announcing first-quarter earnings.
Citigroup (NYSE: C - news) and Goldman Sachs (NYSE: GS-PB - news) will wrap up the financial earnings week on Thursday, while Morgan Stanley (Xetra: 885836 - news) will report the following Monday, April 20.
The best window for opportunistic issuance then would be this coming Monday, April 13, when some bankers think a Yankee bank could come to market.
A new Yankee trade would take advantage of the very strong momentum generated in the past week by Societe Generale (Paris: FR0000130809 - news) and ING's respective Tier 2 and Additional Tier 1 deals.
"Corporate issuance will be light, because most companies are still in earnings blackout," one senior syndicate manager told IFR.
"We think we could see about US$15bn-US$20bn in the week ahead, but those numbers could change a lot, because it will all depend on how many self-led deals we see from US banks."
This week saw just US$10.125bn in issuance, more than half of it from financials - US$1.95bn from domestic and US$4.45bn Yankee issuers.
The slowdown in supply is exactly what market particpants had hoped for after March's record US$149.76bn deluge of new paper.
"The tone has definitely improved in the past week," said the syndicate manager.
"The back-off in supply has helped to repair the market (supply/demand) technicals, which were weak in the latter part of March," he said. "So that's a good thing."
Glencore's Baa2/BBB rated US$500m 10-year tranche was bid Friday at 215bp, 5bp tighter than its 220bp launch spread. (Reporting by Danielle Robinson; Editing by Marc Carnegie)