Morning Commentary: UDR, European Investment Bank eye market; new issues mostly flat

By Cristal Cody

Tupelo, Miss., Oct. 2 – Primary action in the high-grade bond market is expected to include corporate and sovereign, supranational and agency issuance on Wednesday.

UDR, Inc. intends to price an add-on to its $300 million of 3.2% guaranteed medium-term notes due Jan. 15, 2030 that were first sold in June and a new issue due in 2034.

The European Investment Bank is on track to bring $1 billion of 10-year global notes on Wednesday.

Initial price talk is in the mid-swaps plus 21 basis points area.

High-grade volume week to date totals more than $6 billion from corporate bonds priced in the first two sessions, near the approximate $10 billion to $15 billion of supply syndicate sources forecast for the week.

In the secondary market, new issues were mostly unchanged.

MidAmerican Energy Co.’s $850 million of green first mortgage bonds priced in new and reopened tranches on Tuesday traded wrapped around issuance, a source said.

The company priced a $250 million tap of its 3.65% bonds due April 15, 2029 at a spread of 75 bps over Treasuries. Initial price talk was in the 90 bps spread area.

MidAmerican Energy first priced $600 million of the bonds on Jan. 7, 2019 at a spread of 97 bps over Treasuries. The total outstanding is now $850 million.

A $600 million tranche of 3.15% bonds due April 15, 2050 priced at a Treasuries plus 107 bps spread. The bonds were initially talked in the Treasuries plus 125 bps spread area.

NextEra Energy Capital Holdings Inc.’s $1 billion of guaranteed debentures due Nov. 1, 2029 (Baa1/BBB+/A-) that priced in the previous session also traded wrapped around issuance in the secondary market, a source said.

The debentures priced with a spread of 115 bps over Treasuries.

NextEra Energy Capital Holdings’ parent company, NextEra Energy, Inc., is the guarantor.

Corporate secondary market volume in high-grade issues declined to $20.98 billion on Tuesday from more than $22.4 billion on Monday, according to Trace data.

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