Morning Commentary: FedEx, Constellation Brands, MidAmerican Energy to tap primary market

By Cristal Cody

Tupelo, Miss., Jan. 29 – Several issuers signaled plans early Monday to price new high-grade bonds, while overall market volume is expected to pick up over the week after light issuance in the previous week.

FedEx Corp. intends to bring a two-part offering of notes to the market.

Constellation Brands, Inc. plans to sell three tranches of senior notes.

Also, MidAmerican Energy Co. is offering 30-year first mortgage bonds.

Market sources forecast about $20 billion of supply for the week.

Some profit-taking was seen across other markets over the morning with the 10-year Treasury yield hitting 2.7%, a source said.

The three-month Libor yield hit 1.77% on Monday, up 1 basis point, according to a market source.

In the investment-grade secondary market, FedEx’s bonds (Baa2/BBB) that priced in January 2017 were mixed but better than issuance.

The company’s 4.4% bonds due Jan. 15, 2047 traded early Monday at 105.18, down from 106.18 on Friday, according to a market source.

FedEx sold $750 million of the bonds on Jan. 3, 2017 at 98.946 to yield 4.464%, or a spread of 140 bps over Treasuries.

The shorter-dated tranche of 3.3% notes due March 15, 2027, which priced in the 2017 offering in a $450 million tranche at 99.598 to yield 3.346% and a spread of 90 bps over Treasuries, was last seen trading at 100.17, a source said. The notes headed out on Friday at 99.95.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.