Morning Commentary: International Flavors offers three tranches; light supply on tap

By Cristal Cody

Tupelo, Miss., Sept. 24 – International Flavors & Fragrances Inc. (Baa3/BBB) announced details of a three-tranche dollar-denominated offering of senior notes early Monday following the company’s two-day roadshow that ended on Friday.

On Thursday, the company also priced a €1.1 billion two-part offering of euro-denominated senior notes. Proceeds from both deals will be used to help fund a $7 billion acquisition of Israeli extracts producer Frutarom Industries Ltd.

Investment-grade deal volume is expected to be lighter this week after issuers priced more than $34 billion of high-grade bonds last week, sources report.

About $20 billion to $25 billion of investment-grade bond issuance is predicted for the week, with some expecting as little as $15 billion of supply, according to syndicate sources.

Issuance likely will be front-loaded over the week with the Federal Reserve’s monetary policy meeting and press conference scheduled for Wednesday, according to market sources.

Otherwise, activity was somewhat quiet at the start of the day due to political news and several financial markets, including in Japan, China, Taiwan and Korea, closed on Monday for a public holiday, a source said.

Month to date, supply has been strong in the high-grade primary market with more than $124 billion of bonds priced.

Elsewhere in the secondary market, Friday’s session ended with $15.5 billion of investment-grade trading volume, according to Trace data.

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