Morning Commentary: High-grade supply revs up; Boeing, Schwab, Aflac among issuers

By Cristal Cody

Tupelo, Miss., Oct. 29 – The high-grade market opened to a better tone on Monday as equities rallied. Several issuers announcing plans to price new bonds following thin supply in the previous two weeks.

Boeing Co. is offering $700 million of senior notes in two tranches.

Charles Schwab Corp. intends to price senior notes due 2024 and 2029.

Aflac Inc. is on deck with a senior note offering.

Consumers Energy Co. is marketing two tranches of first mortgage bonds.

Southwestern Public Service Co. also intends to price 30-year first mortgage bonds.

Syndicate sources expect about $15 billion to $20 billion of issuance this week.

Coming up on Wednesday, Duke Energy Carolinas LLC (Aa2/A) will hold a roadshow and fixed income investor calls for a benchmark-sized dollar-denominated offering of green first and refunding mortgage bonds, according to a market source.

BofA Merrill Lynch, BNP Paribas Securities Corp., MUFG, Scotia Capital (USA) Inc. and TD Securities (USA) LLC are the arrangers.

On Friday, Bank Nederlandse Gemeenten NV (Aaa/AAA/AA+) held fixed income investor calls for a new Rule 144A and Regulation S offering of three-year sustainable bonds, a source said.

BNP Paribas Securities Corp., Citigroup Global Markets Inc. and TD Securities are the arrangers.

Last week, investment-grade issuers priced more than $14 billion of bonds, which included $6 billion of corporate issuance.

Volume is expected to be sporadic in November from limited deal windows due to the mid-term elections, the Federal Reserve’s monetary policy meeting and the Veterans Day and Thanksgiving Day holidays, according to market sources.

While the primary market capped the quiet week off on Friday with no reported issuance, secondary trading was strong with $15.86 billion of bonds traded, up from the $14.93 billion of bonds traded in the same period a week earlier, Trace reported.

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