Morning Commentary: Micron Technology, Essex offer notes; Verizon, Altria eye primary

By Cristal Cody

Tupelo, Miss., Feb. 4 – Monday kicked off with a couple of high-grade issuers announcing bond deals and two major companies readying to hold fixed income investor calls.

Micron Technology, Inc. is on deck with a three-part offering of senior notes.

Essex Portfolio, LP plans to price guaranteed senior notes.

Meanwhile, Verizon Communications Inc. will conduct fixed income investor calls on Monday for a dollar-denominated offering of green bonds.

BofA Merrill Lynch and Goldman Sachs & Co. LLC are the arrangers.

Market sources also are eying a potentially hefty bond deal from Altria Group Inc. that includes euro-denominated bonds and may include dollar-denominated notes.

The company is holding fixed income investor calls on Monday via Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Mizuho Securities USA Inc.

About $15 billion to $20 billion of high-grade supply is projected for the week, sources said.

Foreign purchases of U.S. bonds are expected to be softer on the week with the Chinese markets mostly closed for the week due to the Lunar New Year celebrations.

Investment-grade issuers priced more than $17 billion of bonds in the previous week.

For February, syndicate sources on average predict about $85 billion to $90 billion of overall high-grade issuance.

However, some market observers are forecasting much higher issuance for the month in the $110 billion to $120 billion range.

February “will be much busier than usual as the backlog of non-financial issuance delayed by the December volatilities finally hit our market after exiting earning-related blackouts,” according to a BofA Merrill Lynch research note released on Monday. “Recall that in December we only got $9.1 [billion] of supply – about $36 [billion] below the $45 [billion] seasonal run-rate for that month, due to recession fears induced sell-offs in the market.”

Then, January’s volume was about $10 billion below the $127 billion seasonal run-rate for the month, “leaving us quite behind in the pipeline,” the note said.

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