“The response to these deals was ridiculous”
- Joshua M Brown
- January 18th, 2013
Yield-hungry institutional investors are still going banoodles for corporate debt of every stripe.
Anecdotally-speaking, the quote above is from a Reuters story on a new bond issue from Zoetis, a not-yet-public animal health spin-off from Pfizer that came to market with a debt offering.
Zoetis floated a four-part offering of $3.65 billion and the order book ended up more like $30 billion - ten times oversubscribed!
"The response to these deals was ridiculous," said one senior banker.
"Receiving orders north of US$30bn for Zoetis is a staggering result. This demand is clearly at odds with all that speculation that investments are moving out of bonds into equities and that the high-grade issuance party is over. Clearly it is not over yet."
The party continues.
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The Reformed Broker is a blog about financial markets and the economy. Joshua Brown is a New York City-based investment advisor for high net worth individuals, charitable foundations, retirement plans and corporations... More.