The much-awaited initial public offering of Accenture Ltd., the consulting spinoff of the former Arthur Andersen consulting business, is ready to roll this week.

The implication for other would-be issuers: While the latest reports indicate that the deal is likely to come off on time and with relatively few hitches, the subsequent performance of the stock itself will have a major effect on other issuers’ ability to tap the IPO market, especially given the deal’s bellwether status.

Market sources indicate that the offering–the consulting firm hopes to raise more than $1.7 billion–has been attracting more than sufficient investor interest to price as scheduled on Thursday, July 19.

But the larger question being asked by market observers is whether or not the issue has the capacity to perform well once it moves to secondary trading on Friday.

On this point there exists considerable skepticism.

To their credit, Accenture, Goldman Sachs, Morgan Stanley, and the rest of the syndicate running the deal have helped reassure the initial investors by avoiding the temptation (so far) to change the deal terms in response to demand. The firm’s 115 million shares are slated to be sold at a range of $13 to $15, the same deal dimensions as announced early last month.

But investors are nevertheless mindful of the weakness of the economy, and its effect in particular on the consulting business itself. The highly publicized layoff and partner remuneration cutback announcements that have occurred since the firm’s 2,500 partners voted to go public may have perversely added to this effect instead of reassuring an investing public concerned about the Accenture bottom line. See related story.

And let’s not forget KPMG Consulting. The firm’s February IPO was the first major such offering to hit the market this year. Its shares priced at $18, the top end of the estimated price range, then soared more than 30 percent to close their first day of trading at $23.48. However, they closed at just $14.45 on Friday. Enough said.

Bond Markets

The bond markets will see a smattering of activity in the weeks ahead:

In investment grade, there are only a few issues announced, with none definitely set for this week. These include:

• Washington Mutual, a savings and loan, which, as previously reported, is preparing $1 billion of five-year (A3/BBB+) floating-rate notes to price next week.
• Humana, an operator of medical health plans, which plans $300 million of five-year (Baa3/BBB) senior notes to repay borrowings under a credit line that expires in August 2002.

The junk bond market will see up to $2 billion of offerings in the near future:

• One of these, Univision, plans to privately sell $500 million of 10-year bonds to help repay debt and fund its many acquisitions (see our earlier article on this topic).
• Other names in the pipeline include Pacificare Health Systems, an operator of Medicare plans, which is preparing $500 million of (Ba3/BB-) 10-year notes in the private market, , an advertising and marketing firm, which is planning $400 million of 10- year (B3/B) senior subordinated notes, and United States Steel, which is planning a $350 million private offering of senior notes.

Click here for last week’s Capital Markets column.