Morning Commentary: Bank of New York Mellon offers notes; supply thins; Morgan Stanley active

By Cristal Cody

Tupelo, Miss., Jan. 22 – At least one issuer plans to tap the high-grade bond market on Monday.

Bank of New York Mellon Corp. is offering series J senior medium-term notes.

Syndicate sources said they expect some smaller bank and financial issuance over the week following heavy supply from the major U.S. banks in the previous week.

About $20 billion to $25 billion of deal volume is forecast by syndicate sources for the week with some desks predicting as little as $15 billion of total issuance.

Early Monday, market sources were focused on the continued U.S. government shutdown. Sources predict the shutdown to continue for much of the week.

In other expected supply on the horizon, Canada Pension Plan Investment Board funding arm CPPIB Capital Inc. (Aaa/AAA/AAA) is marketing a Rule 144A and Regulation S offering of U.S. dollar-denominated three-year notes.

Barclays, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and TD Bank Securities (USA) LLC are the bookrunners.

Looking at the investment-grade secondary market, $18.41 billion of bonds were traded on Friday, according to Trace.

In early trading on Monday, new paper that Morgan Stanley (A3/BBB+/A) that priced on Thursday was active, a source said.

Morgan Stanley’s 3.125% series I global medium-term senior notes due Jan. 23, 2023 were last seen at 99.84 in early trading.

The New York-based financial products and services company priced the notes in a $2.5 billion tranche at 99.775 with a spread of Treasuries plus 77 basis points.

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