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Morning Commentary: High-grade supply quiets; Jabil holds fixed income investor calls
By Cristal Cody
Tupelo, Miss., July 1 – High-grade primary action quieted on Wednesday with no reported issuers offering bonds at the start of the session, sources report.
Supply week to date already totals about $15 billion, compared to the $10 billion to $15 billion of issuance expected by market participants ahead of the Independence Day holiday.
Volume was strong on Monday with $12.5 billion of issuance, led by Takeda Pharmaceutical Co., Ltd.’s $7 billion four-part offering of senior notes (Baa2/BBB+) and Sumitomo Mitsui Financial Group Inc.’s $3 billion two-tranche sale of senior notes (A1/A-).
On Tuesday, $2.4 billion of notes were priced from issuers including Societe Generale SA, Mondelez International, Inc. and Guardian Life Global Funding.
Investment-grade issuance totaled more than $184 billion in June, while July is predicted by market participants to post about $100 billion of supply. However, some market participants expect only up to about $60 billion of volume in July due in part to earnings-blackout reporting periods over the month.
In other action on Wednesday, St. Petersburg, Fla.-based electronic product solutions company Jabil Inc. (Baa3/BBB-/BBB-) will hold fixed income investor calls, a market source said.
BNP Paribas Securities Corp., Citigroup Global Markets Inc., Mizuho Securities USA LLC and SMBC Nikko Securities America Inc. are the arrangers.
Market tone was mixed at the start of the third quarter on Wednesday.
The iShares iBoxx Investment Grade Corporate Bond ETF, which finished Tuesday up 0.28% at 134.50, was down 0.15% to 133.99 over the morning.
The Pimco Investment Grade Corporate Bond index improved 0.06% to 114.06 in early trading after closing Tuesday up 0.18% to 114.28.
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