Morning Commentary: Coach, Sempra Energy market notes; bonds active in secondary market

By Cristal Cody

Tupelo, Miss., June 6 – Tuesday’s deal pipeline began to fill over the morning with at least two planned high-grade bond offerings.

Coach, Inc. is marketing $1 billion of five- and 10-year senior notes (/BBB-/BBB) to fund its acquisition of Kate Spade & Co.

Sempra Energy also intends to price 10-year senior notes over the session.

Sempra Energy’s existing bonds were active in secondary trading early Tuesday. The company’s 1.625% senior notes due Oct. 7, 2019 softened at the start of the session to 99.14 from 99.24 on Monday, according to a market source.

Sempra Energy sold $500 million of the notes on Oct. 4, 2016 at 99.898 to yield 1.66%, or a spread of Treasuries plus 72 basis points.

Coach’s 4.25% senior notes due April 1, 2025 also were active over the morning in the secondary market. The notes softened to 103.23 in early secondary trading from 103.54 on Monday, a source said.

Coach’s notes headed out on Monday 4 bps tighter at 163 bps bid, according to another market source.

Coach sold $600 million of the notes on Feb. 23, 2015 at 99.445 to yield 4.318%, or Treasuries plus 225 bps.

In the broader high-grade bond market on Monday, $12.79 billion of high-grade issues were traded, according to Trace.

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