Morning Commentary: Capital One Financial offers notes; secondary volume heavy; CVS improves

By Cristal Cody

Tupelo, Miss., April 26 – Capital One Financial Corp. is in the high-grade deal pipeline on Thursday with a two-tranche offering of senior notes.

Otherwise, primary market action was light at the start of the day and has thinned over the week as supply fatigue sets in, a source said.

More than $20 billion of high-grade bonds were priced in the first three sessions of the week.

Heavy deal volume is expected in May with one syndicate source forecasting as much as $140 billion of new issuance in the month ahead.

Meanwhile, secondary trading volume has climbed over the week. On Wednesday, $22.29 billion of investment-grade bonds were traded, up from $20.59 billion on Tuesday and $18.85 billion on Monday, according to Trace.

CVS Health Corp.’s senior notes (Baa1/BBB+) that priced as part of a $40 billion nine-tranche offering on March 6 have traded heavily over the last two sessions and continued to be active early Thursday, according to a market source.

CVS Health’s 4.3% senior notes due March 25, 2028 (Baa1/BBB+) improved to 99.89 over the morning from where the notes went out at 98.58 on Wednesday, the source said.

The notes ended the previous session about 2 basis points softer at 148.1 bps bid, another source said.

The Woonsocket, R.I.-based retail pharmacy chain and pharmacy benefits manager sold $9 billion of the 10-year notes at 98.594 to yield 4.475%, or a spread of Treasuries plus 160 bps.

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