Morning Commentary: Westlake Chemical on tap; Microsoft bonds mixed; credit spreads improve

By Cristal Cody

Eureka Springs, Ark., Aug. 3 – Investment-grade pricing action on Wednesday is expected to include a $1.3 billion two-tranche bond offering from Westlake Chemical Corp.

Westlake Chemical plans to price 10- and 30-year senior notes in a Rule 144A and Regulation S-eligible offering to help fund its $2.3 billion acquisition of Axiall Corp., according to a company news release and Moody’s Investors Service.

In the secondary market, Microsoft Corp.’s $19.75 billion of senior notes (Aaa/AAA) that priced in seven parts on Monday traded flat from issuance to about 4 basis points tighter early Wednesday.

The three-month Libor yield was stable on Wednesday at 76 bps.

The Markit CDX North American Investment Grade index opened the session about 1 bp tighter at a spread of 76 bps.

Secondary trading volume rose to $17.29 billion on Tuesday from $12.98 billion of high-grade issues traded on Monday, according to Trace.

Microsoft mixed

Microsoft’s 2.4% notes due 2026 tightened to 87 bps offered in secondary trading, a source said.

The company sold $4 billion of the 10-year notes on Monday at a spread of 90 bps over Treasuries.

Microsoft’s 3.7% notes due 2046 improved to 141 bps offered, tighter than where the $4.5 billion tranche priced at 145 bps over Treasuries in Monday’s sale.

The company’s 3.95% notes due 2056 were unchanged at the 180 bps area in the secondary market.

Microsoft sold $2.25 billion of the 40-year bonds on Monday at 180 bps over Treasuries.

The computer software company is based in Redmond, Wash.

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