Morning Commentary: International Paper, Entergy Mississippi, SoCal Gas bonds on tap

By Cristal Cody

Tupelo, Miss., May 30 – After a quiet session on Wednesday, several issuers moved forward with plans to tap the high-grade primary market on Thursday.

International Paper Co. is offering 10-year fixed-rate notes.

Entergy Mississippi, LLC plans to price fixed-rate first mortgage bonds.

Also, Southern California Gas Co. intends to sell fixed-rate first mortgage bonds due 2050.

Investment-grade companies have priced more than $3 billion of notes week to date.

Deal volume has been led by MasterCard Inc.’s $2 billion two-part sale of fixed-rate notes on Tuesday. The bond markets were closed on Monday for the Memorial Day holiday.

About $10 billion to $15 billion of supply was expected this week, according to syndicate sources.

In the secondary market, new issues priced this week were mixed, a source said.

MasterCard’s notes (A1/A+) traded about 3 basis points to 5 bps wider than issuance.

The company sold $1 billion of 2.95% notes due June 1, 2029 at a spread of 70 bps over Treasuries and $1 billion of 3.65% notes due June 1, 2049 at a Treasuries plus 95 bps spread.

In other new issue secondary trading, energy issues were mostly wider.

Southwest Gas Corp.’s 4.15% senior notes due June 1, 2049 (A3/BBB+/A) that priced on Tuesday were quoted about 3 bps weaker than issuance, a source said.

The Las Vegas-based natural gas distributor sold $300 million of the notes at a spread of 145 bps over Treasuries.

Secondary trading volume rose to $23.98 billion on Wednesday from $17.75 billion on Tuesday, according to Trace data.

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