Morning Commentary: Timken to tap primary market; deal volume slows; AstraZeneca busy

By Cristal Cody

Tupelo, Miss., Aug. 22 – Investment-grade deal action early Wednesday includes an offering of senior notes from the Timken Co. (Baa3/BBB/BBB).

The deal is the first reported high-grade bond offering from the Canton, Ohio-based mechanical components engineering, manufacturer and marketing company since 2014.

Primary market action has been light over the week with just over $5 billion of high-grade bonds priced in the first two sessions.

Thin volume was expected this week with about $5 billion to $10 billion of issuance forecast by syndicate sources.

In the secondary market, trading volume also has been light. On Tuesday, $15.6 billion of bonds were traded, up from $13.39 billion of volume on Monday, according to Trace.

Early Wednesday, AstraZeneca plc’s 4% notes due Jan. 17, 2029 that priced in its $3 billion four-part deal on Aug. 14 were flat in the par area in secondary trading after closing modestly softer in heavy trading on Tuesday, according to market sources.

The Cambridge, England-based biopharmaceutical company sold $1 billion of the notes (A3/BBB+/A-) at 99.59 to yield 4.049%, or at a spread of Treasuries plus 115 basis points.

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