Morning Commentary: Norfolk Southern offers two tranches; high-grade deal supply thin

By Cristal Cody

Tupelo, Miss., Oct. 24 – Norfolk Southern Corp. is marketing two tranches of registered senior notes in the high-grade primary market on Thursday.

The Norfolk, Va.-based freight railroad company was last in the primary market on April 29 when it priced an $800 million three-part offering of senior notes.

Meanwhile, a bond offering is expected soon from Zions Bancorporation, which held fixed income investor calls on Wednesday via Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

High-grade deal volume remains light week to date with more than $4 billion of corporate bonds priced, compared to about $15 billion to $20 billion of supply forecast by syndicate sources for the week.

On Wednesday, issuance included a $750 million registered offering of long five-year senior notes from Fifth Third Bancorp and $400 million of five-year funding agreement-backed notes from Reliance Standard Life Global Funding II.

High-grade secondary trading volume also was light on Wednesday with $18.73 billion of bonds traded, down from $20.86 billion of trading volume on Tuesday. On Monday, $16.49 billion of investment-grade corporate bonds were traded, according to Trace data.

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