Morning Commentary: Southwest Airlines, First Republic, Synovus, Hyundai, IBRD on tap

By Cristal Cody

Tupelo, Miss., Feb. 5 – Investment-grade bond supply ramped up with deals being offered in the corporate and sovereign, supranational and agency primary markets on Wednesday.

Southwest Airlines Co. is offering $500 million of notes due 2030 with initial talk at the Treasuries plus 125 basis points area, a source said.

First Republic Bank expects to price four-year senior fixed-to-floating rate notes during the session. Initial price talk was in the Treasuries plus 65 bps area, a source said.

Synovus Financial Corp. is on deck with an offering of three-year fixed-to-floating rate notes that are talked to print at a 105 bps to 110 bps spread over Treasuries.

Hyundai Capital America expects to bring three tranches of dollar-denominated notes in a Rule 144A and Regulation S deal that includes notes due Feb. 10, 2023 initially talked to price in the Treasuries plus 120 bps to 125 bps area, notes due Feb. 10, 2025 talked to print in the 145 bps to 150 bps spread area and notes due Feb. 10, 2027 that are initially talked at a 165 bps to 170 bps spread.

Meanwhile, the SSA market reopened on Tuesday with more deals expected to print on Wednesday.

Oesterreichische Kontrollbank AG launched a $1.5 billion offering of five-year global notes at mid-swaps plus 12 bps.

The International Bank for Reconstruction and Development, or World Bank, plans to price $500 million of global floating-rate notes due Aug. 6, 2024 during the session.

The notes are initially talked to price at the SOFR plus 28 bps area.

Nationwide Building Society also is preparing to price covered bonds due Feb. 13, 2023 on Wednesday.

Initial price talk was in the mid-swaps plus 30 bps area with guidance tightened to the mid-swaps plus 27 bps area, plus or minus 1 bp.

Elsewhere, Comcast Corp. is marketing five tranches of dual currency notes, including three tranches of euro-denominated bonds and two tranches of sterling-denominated notes on Wednesday following International Business Machines Corp.’s €3.75 billion three-part bond offering on Tuesday.

Dow Chemical Co. also expects to tap the European primary market, sources said.

Investment-grade issuers have priced more than $12 billion of dollar-denominated corporate bonds week to date, near the $15 billion to $20 billion of volume expected for the week.

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