Morning Commentary: Edison on tap; supply thins before Fed rate decision; Moller firms

By Cristal Cody

Tupelo, Miss., June 18 – Edison International announced plans early Tuesday to price an offering of fixed-rate senior notes due June 15, 2027.

Otherwise, primary action was light at the start of the session following more than $4 billion of bonds priced on Monday.

The Federal Reserve kicked off its two-day meeting on Tuesday. Market sources do not anticipate a rate cut following the June meeting but expectations are growing for a possible rate cut at the Fed’s July 30-31 meeting.

Supply was eyed to thin this week due to heavier-than-expected volume over the previous two weeks and the Federal Reserve’s monetary policy decision due on Wednesday, sources said.

About $15 billion to $20 billion of investment-grade corporate issuance is forecast by market sources this week with some expecting as little as $10 billion of volume.

Corporate deal volume in June includes more than $28 billion of supply last week and more than $24 billion of issuance in the first week of the month.

In the secondary market, the $500 million of 4.5% notes due June 20, 2029 that A.P. Moller-Maersk A/S priced on Monday improved about 3 basis points, a source said.

The Copenhagen, Denmark-based integrated container shipping company (Baa3/BBB) sold the notes at a Treasuries plus 250 bps spread following a roadshow earlier in June.

Initial price talk was in the Treasuries plus 260 bps area.

Overall secondary market volume included $17.34 billion of bonds traded on Monday, according to Trace data.

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