Morning Commentary: Oesterreichische Kontrollbank on deck; high-grade market quiet

By Cristal Cody

Tupelo, Miss., Aug. 29 – At least one high-grade bond issuer is expected to tap the primary market on Wednesday in what is shaping up to be an otherwise quiet late-summer session.

Oesterreichische Kontrollbank AG (Aa1/AA+) plans to price a benchmark-sized offering of three-year global notes that was initially talked to price in the mid-swaps plus 6 basis points area, according to a market source.

Deutsche Bank Securities Inc., J.P. Morgan Securities, LLC and RBC Capital Markets, LLC are the lead managers.

Vienna, Austria-based OeKB provides financial and information services to Austria’s export industry and the capital market.

Investment-grade volume has been thin over the past two sessions with $1 billion of new bonds priced.

Brixmor Operating Partnership LP sold $250 million of long three-year senior floating-rate notes on Tuesday, while Caterpillar Financial Services Corp. priced a $750 million reopening of medium-term floating-rate notes due March 15, 2021 on Monday.

Light supply was expected over the week with many desks thinly staffed ahead of the Labor Day holiday. Market sources forecasted up to about $5 billion of issuance for the week.

Secondary trading was stronger in the high-grade market on Tuesday with $13.72 billion of bonds traded, up from $10.21 billion on Monday, according to Trace.

United Technologies Corp.’s 4.625% senior notes due Nov. 16, 2048 (Baa1/BBB+) that priced on Aug. 13 were active but weaker in the secondary market early Wednesday, a source said. The notes closed down 30 cents on Tuesday and were down more than 60 cents over the morning to 101.79.

The Hartford, Conn.-based company priced the $1.75 billion tranche of 30-year notes at 99.6823 to yield 4.645%, or a spread of 160 bps over Treasuries.

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